Observer "Lietuva"

WEEK 22th

Saturday, 29th of May

Tourists
Lithuanian rural tourism farmsteads hope to host some 20,000 guests from foreign countries, mainly from Scandinavia, Germany, Denmark and Russia. Sirusiene, the president of the Lithuanian Rural Tourism Association, says last year foreigners constituted 2-3 percent of all the people who rested in rural tourism farmsteads; this year their number should account for 10 percent of the general tourists’ number.
On the whole, Lithuanian rural tourism farmsteads project to host 200,000 tourists this year.
The Lithuanian Rural Tourism Association has embassies in the United States and Italy. The latter will be propagating religious tourism.
Lietuvos Rytas

OMHEX paid for NSEL
OMHEX, the largest Nordic stock exchange operator, transferred LTL10.825 million in payment for 44.31 percent of the National Stock Exchange of Lithuania (NSEL) and 32 percent in the Central Securities Depository of Lithuania (CSDL) on Friday.
On Friday the council of the bourse approved a new board of NSEL, Jasulaityte was elected the board chairperson and the president of the bourse.
Lietuvos Rytas, Respublika, Lietuvos Zinios

Wind power plants in the seaside
Six companies of Lithuania have expressed a wish to build wind power plants on the Lithuanian seaside. Ekofondas, Vejo Jegaines, BNE, Alternatyvi Vejo Jega, Vej? Spektras and AVEC have submitted applications to the tender announced by Lietuvos Energija (Lithuanian Energy) for construction of wind power plants in the so-called third (seaside) zone. The wind power plants will be joined to the transmission line Klaipeda-Palanga-Sventoji.
The winner of the tender will be announced in 10 days.
The general capacity of all the generators of wind power plants in this region will have to be 6MW-35 MW.
Respublika

Friday, 28th of May

Manager of Mazeikiu Nafta – on threshold of bankruptcy
The Russian giant Yukos, which controls the Lithuanian oil refinery Mazeikiu Nafta, informed its shareholders and employees on Thursday that it might turn bankrupt by the end of this year unless the Russian Tax Inspectorate ceases the attacks against it.
Even though the manager of Mazeikiu Nafta faces bankruptcy and Yukos might be handed over to other companies, Lithuanian officials have not undertaken any moves yet. Saulius Specius, an adviser of the Lithuanian Prime Minister, said the government has not considered a possibility to take over the shares of Mazeikiu Nafta yet. According to him, this would not solve the problem, as Mazeikiu Nafta needs raw oil the most. He says if the shares were taken over, it would be difficult to find an investor that would guarantee stable oil supply to Mazeikiai-based company.
Specius said the government was observing the situation but he added that the significance of Mazeikiu Nafta for Lithuania is exaggerated.
Lietuvos Zinios

Alita is allowed to purchase Anyksciu Vynas on one condition
Alytus-based alcohol company Alita has been allowed to privatize another alcohol company Anyksciu Vynas provided that it sells the shares of an alcohol distributor Artrio-2, the Competition Council ruled on Thursday. Alita controls a 12.5 percent stake in Artrio-2.
The Competition Council has ruled that the merger of Alita and Anyksciu Vynas will change the concentration degree only in certain segments of the alcohol beverage market and the market of non-sorted apples.
In 2003, Artrio-2 was a single company that applied for a 72.93 percent stake in Anyksciu Vynas, however, the privatization tender ruined last October, when Artrio-2 failed to pay for the privatized company.
Lietuvos Zinios, Lietuvos Rytas, Respublika, Verslo Zinios

Lithuania will compete with buses
An air company Lithuania, the only wholly privately owned air carrier in the Baltic countries, is cutting fares to stay competitive in the market.
Lithuania, which is controlled by the local freight forwarding and logistics company Arijus, is the only air carrier that runs scheduled passenger flights from Kaunas and the seaside resort of Palanga.
The airline has said that it starts offering flights at prices from LTL 250 one-way in an effort not only to strengthen its positions in the air market, but also to compete with bus and ferry service operators
The flagship air carrier Lietuvos Avialinijos (Lithuanian Airlines, or LAL) has recently started to offer cheaper flights from Vilnius. The Latvian carrier airBaltic has unveiled plans to start direct flights from Vilnius at competitive prices from June 1.
Lithuania posted losses of LTL 780,000 for 2003 due to provisions for bad loans. Its annual revenues came in at LTL 29 million.
Verslo Zinios

Thursday, 27th of May

Lithuania did not attract Ford’s partners
US car parts maker BorgWarner has denied comments by a former Ford executive that the company, a Ford supplier, is considering building a plant in Lithuania to make turbochargers.
"Because of the growth of diesel engines in Europe, our business continues to expand, but we are not considering a plant in Lithuania at this time," Mary Brevard, the company's head of corporate communications, was quoted by the news agency Reuters as saying on Tuesday.
Thus she reacted to comments from George Jurgutis, a former Ford executive, who said BorgWarner had placed Lithuania and two other countries on a short list of places to build some 300,000 high-tech diesel fuel injection systems a year.
Foreign direct investment in Lithuania fell to a record low LTL 800 million in 2003. Experts say that bureaucracy and underdeveloped infrastructure remain the major barriers to greenfield investment.
Lietuvos Rytas, Verslo Zinios

Another award for Lithuanian brewers
The second largest Lithuania’s brewery Kalnapilis-Tauras group has received another international award. Two days ago, the organisers of the Brewery Industry International Awards announced that Kalnapilis 7.30 beer won the silver award in the strong beer category.
Brewers from 48 countries participated in the beer contest, awards were given to the representatives of 13 countries. The Lithuanian beer outrivaled one of the world’s largest breweries Interbrew in its category.
This is not the first award received by Kalnapilis-Tauras group this year.
In April, Kalnapilis Original and Kalnapilis 7.30 beer won golden awards in separate categories in the beer championship in the United States. Later on, Kalnapilis Export won the golden award in a beer contest in Moscow.
Lietuvos Rytas, Verslo Zinios

Situation in the banking market changes
Vilniaus Bankas, Lithuania's biggest bank by assets, has moved very close to Hansabankas, its key rival, in terms of housing loan market share after posting a strong growth in loans for the first four months of this year.
At the end of April, Hansabankas, which is a member of Hansabank, the largest financial group in the Baltics, held a 30.5 percent share of the housing loan market, while Vilniaus Bankas, which is owned by Sweden's SEB, held a 28.2 percent market share. Nord/LB Lietuva was third with a 20.3 percent market share, followed by Sampo with a 13.7 percent market share.
According to data from the state-run housing loan insurer Busto Paskolu Draudimas, Hansabankas had provided LTL 668.6 million worth of housing loans as of late April, while Vilniaus Bankas had extended LTL 617.4 million of housing loans.
Lietuvos Zinios, Verslo Zinios, Lietuvos Rytas

Wednesday, 26th of May

Lithuanian Post to be reorganised into public limited company
On Tuesday, the Lithuanian parliament passed a law to transform the state enterprise Lietuvos Pastas (Lithuanian Post) into a public limited company, 100 percent owned by the state.
Relying on the data of the Statistics Department, the revenues of country’s companies from post and express delivery services increased by 9.2 percent last year and stood at LTL 203.719 million.
Verslo Zinios, Lietuvos Rytas

Alita strengthens its positions in the market
The alcohol company Alita, which posted the biggest turnover among Lithuania’s alcohol beverage producers last year, continues strengthening its market positions. In May, the company has presented a new product for the clients: pepper vodka Premium Gera Pepper. The new vodka is available in 0.5l, 0.7l and 1l bottles.
Relying on the data of the market research company AC Nielsen, Alita boosted its share of the vodka market in Lithuania by 3.2 percent, to 20.7 percent, in the first quarter of this year compared to the relevant period previous year. Alita’s vodka sales increased 36 percent over the first quarter of this year.
Verslo Zinios, Lietuvos Rytas

New low-price stores will attract buyers
The big retail trade chains admit that the future of retail trade belongs to small low-price stores. Some of the chains plan to start a fight for thrifty buyers this summer already.
Inga Skisaker, CEO of RIMI Lietuva, claims that the company’s development plans are related to the planned strategic move – establishment of a joint company of ICA Baltic and Kesko this summer. The chain plans to open new low-price stores. It is also planned to reconstruct all the stores of the chain that do not have RIMI name yet.
Kesko group controls the largest chain of construction goods and domestic appliances in Lithuania, Senukai.
Competitors value the plans of RIMI differently. The finance director of Iki trade chain Aidas Mackevicius says low-price stores in Lithuania have good prospects.
Egidijus Aleinikovas, director of Aibes Mazmena, sceptically values the possibilities of RIMI Lietuva to strengthen positions in smaller towns.
VP Market chain has the biggest chain of low-price stores at present: it controls 110 Saulutes stores. IKI chain has 50 low-price stores Pigiau Grybo.
Lietuvos Zinios

Tuesday, 25th of May

EU support is a riddle for Lithuanians
Nearly 2/3 of Lithuanian companies are willing to obtain support from the European Union’s (EU) structural funds but majority of them do not know how. Some 62 percent of the companies plan to participate in the contest for the EU structural support but 83 percent of them claim that they do not know well how to write an innovative project, a poll carried out by the Lithuanian Innovation Centre implies.
70 percent of the polled said they would need consultations for implementation of the innovative projects.
The poll has revealed that the demand for innovations is growing: 84 percent of respondents said they would look for help for drafting of the innovative projects this year already.
Lietuvos Zinios

Bigger volume of pharmaceutical trade
Eurofarmacijos Vaistines, the operator of the largest pharmacy chain in Lithuania, reported sales of LTL 94.91 million in Lithuania in the first four months of 2004, a 2.1-fold rise from the sales of LTL 44.92 million announced for the January-to-April period of previous year.
In Latvia, the turnover of the chain surged 3.4-fold, to LTL 9.69 million in the reporting period.
Eurofarmacijos Vaistines expects to boost its Lithuanian sales by 72.4 percent to LTL 300 million in 2004, with plans to add 50 new stores to its chain this year.
Verslo Zinios

US investor is looking for a place for a factory
A big US corporation manufacturing automobile engine parts is looking for the possible construction site for a factory in Lithuania. Borg Warner Corporation, which projects some EUR 20 million investments, is choosing among three European countries at present.
George Jurgutis, the consultant of the corporation and the Lithuania’s honour consul in the United States, claims that the determinant factor of the company’s choice will be the geographical place due to more convenient logistics. The corporation will also take into consideration the expenses, the political situation and the wish of the local authorities to attract and help investors.
BW consultant has visited Kaunas, Panevezys and Klaipeda already.
The corporation will pass a decision regarding Lithuania’s relevance for the factory’s construction in several months.
Verslo Zinios

Monday, 24th of May

Vilkmerges Alus presented two new beer brands
Ukmerge-based brewery Vilkmerges Color Alus, which has been offering bear in glass and plastic bottles so far, has presented canned beer in May.
A month ago, Vilkmerges Alus presented two new beer brands for the consumers: a lager beer Is Statines (From the Barrel) and a strong beer Brandusis (Mature).
Sales of Vilkmerges Alus increased 15.1 percent, to 122,000 dal, over the four months of this year compared to the relevant period last year.
The company’s beer is available in 2,000 Lithuanian stores and bars.
Verslo Zinios

Clothing and textile industry down by 4 percent
The Lithuanian clothing and textile industry export, which started to decrease at the end of 2003, amounted to LTL 822 million during the first quarter of this year, a 4 percent drop in comparison to the same period last year.
According to data of the Statistics Department, the import of textile, hosiery, shoes, sewing and leather products increased 6.8 percent to LTL 639 million in the end of the first quarter.
Nevertheless, the textile and clothing industry has managed to preserve a positive trade balance as export exceeded import by LTL 182.7 million.
Rawhide export, which went down by half, had the greatest influence on the decrease of total export of the light industry sector. The value of this year's rawhide export was LTL 26.6 million versus LTL 52.5 million in corresponding period in 2003.
Verslo Zinios

84 percent higher price offered for the National Stock Exchange of Lithuania
Shareholders of the National Stock Exchange of Lithuania (NSEL) have been surprised: the northern Europe’s bourse operator OMHEX has offered to pay LTL 46,000 per share, i.e. 84 percent more than the nominal price. Experts believe that such a price is a good signal, as it implies that the buyers highly value the future prospects of the bourse.
In the privatisation agreement signed by OMHEX and the State Property Fund on Friday, OMHEX obliged to pay LTL 5.014 million for a 44.3 percent stake in NSEL, or 84 percent more than the state had asked for the shares.
The new shareholder of NSEL plans to place an official bid in June in order to buy up the remaining NSEL shares.
Jukka Ruuska, president of HEX Integrated Markets, a branch of OMHEX, promises development of the Lithuanian stock market, which will include favourable terms for all the consumers’ groups and investors and increase of the notoriety, liquidity and reliability of the Lithuanian capital market.
Gert Tiivas, the head of OMHEX for the operations in the Baltic countries, says the Lithuanian bourse will be integrated in the general Baltic market in the first half of the coming year.
Verslo Zinios, Lietuvos Rytas

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