Observer "Lietuva"

WEEK 24th

Saturday, 12th of June

Brewers asked traders not to wrong them
The Lithuanian Brewers’ Association held a five-hour meeting on Friday. Brewers published a statement saying that beer sold at dumping prices in the Lithuanian market did not create any value for Lithuania’s economy or any long-term value for the consumer. Besides, they reminded that they paid hundreds of millions litas taxes to the budget and had thousands of working places. Representatives of breweries stated that the brewers’ business demanded big investments in order to guarantee high quality and lower price also meant lower quality.
Ignas Staskevicius, CEO of VP Market, declared that such statements of brewers did not contain business logics. According to him, VP Market will always negotiate for smaller prices for the sake of the consumers. In Staskevicius‘ opinion, brewers’ solidarity will not last long because all the producers want better trade conditions than their competitors. He believes that the products of Svyturys-Utenos Alus brewery will be available in the stores of VP Market starting next week again.
Lietuvos Zinios

Svyturio Ekstra will be cooled in less time
The leading Lithuanian brewery Svyturys-Utenos Alus has started bottling Svyturio Ekstra beer in 0.33l glass bottles this week. 0.33l glass bottles are the most popular beer containers in the Western Europe. Besides, beer in small bottles gets cool sooner, which is very important n summer.
According to the polls ordered by the brewery, Svyturio Ekstra beer is one of the most popular beer brands in Lithuania and occupies some 10 percent of the country’s beer market.
In five months of this year, the turnover of Svyturys-Utenos Alus in the domestic market increased by 0.5 percent, to 4.264 million decalitres, year-on-year. Meanwhile the position of BBH, the Scandinavian concern that operates the Lithuanian brewery, reduced by 0.6 percent, to 47.06 percent.
Lietuvos Rytas, Respublika

Fuel prices should reduce next week, too
Fuel prices have been reducing in Lithuania this week and experts forecast that this tendency should continue the next week as well.
The oil refinery Mazeikiu Nafta (Mazeikiai Oil or MN) offered 95 petrol at LTL 2.36/l. The company will reduce the price of this petrol to LTL 2.27/l. The price of diesel fuel will reduce from LTL 2.03/l to LTL 2/l. Giedrius Karsokas, head of MN Communications Service, said the situation is the oil market at present preconditions decline in fuel prices. If the situation does not change, fuel prices might continue reducing over the coming ten days.
Kauno Diena

Friday, 11th of June

Leaders are heading towards compromise
After the meeting of the head of VP Market, the biggest retail trade chain in the Baltic countries, and the president of the Scandinavian company BBH, which controls the Lithuanian brewery Svyturys-Utenos Alus, it was agreed that the brewery would present a proposal concerning further cooperation with VP Market next week.
At present, VP Market does not accept the production of the three BBH breweries in all the Baltic countries.
According to Ignas Staskevicius, there are two ways to solve the conflict: either to continue working according to the annual contract or to sign a new contract but in any case, the brewers have to answer all the questions and explain to the public what happened.
In spite of the conflict and the fact that the president of BBH Ram-Schmidt had to come to Lithuania to negotiate with the traders, Tomas Kucinskas, the head of Svyturys-Utenos Alus will not be dismissed but he will be appointed to a new post. Rolandas Virsilas will be appointed the new head of the brewery in July, Kucinskas will be the board chairman of the company and the president of BBH Baltic.
Verslo Zinios, Lietuvos Rytas, Respublika, Kauno Diena

Company calls plant’s construction “a challenge”
Constructus, one of the biggest construction companies in Lithuania, has signed a LTL 102 million contract to build a new PET factory on the outskirts of the seaport of Klaipeda.
The construction order was awarded by Nemuno Bangos Grupe, Lithuania's leading maker of PET plastic bottles and bottle moulds, and the Austrian company Petrochemical Holding. The foreign company will invest LTL 300 million in the new facility.
Constructus plans to start building the factory this month, once the designing operations are finished and the construction permit is obtained. The construction project is to be finished in the summer of 2005.
Lietuvos Rytas, Verslo Zinios

YUKOS does not plan to withdraw from Mazeikiu Nafta
In spite of the problems in Russia, the Russian oil company YUKOS, which operates the Lithuanian oil refinery Mazeikiu Nafta (Mazeikiai Oil), does not plan to sell the shares of the Lithuanian company, on the contrary, it plans to expand activities in the oil refinery.
Piotras Zolotoriovas, the acting president of YUKOS, said this in a meeting with the Lithuanian Prime Minister Algirdas Brazauskas on Thursday. He also remarked that the results of Mazeikiu Nafta were very good at the moment.
Zolotoriovas informed Lithuania’s Prime Minister that YUKOS was considering the issues of raw material and light oil product supply to Mazeikiu Nafta as well as expansion possibilities.
Verslo Zinios, Lietuvos Rytas

Thursday, 10th of June

New business: home delivery of food products
UAB Hexasystems has presented a new business model of food product trade in Vilnius. The company offers delivery of goods ordered according to a catalogue to clients’ home. Businessmen who plan fast expansion are stopped by prohibition to deliver cigarettes and alcohol.
Suppliers are reserved towards the novelty and see the catalogue as an additional possibility of advertising.
100,000 units of a catalogue of UAB Hexasystems have been published; the catalogue is distributed for free by post. It offers delivery of goods of 17 food producers within the limits of Vilnius for LTL 2-5 fee.
Vygandas Masiulis, marketing director of Hexasystems, says he is satisfied with the beginning of activities: they already have 30 regular clients. Shareholders have invested LTL 70,000 in the project.
Verslo Zinios

Boom of new car sales
4,642 new motor vehicles for personal and commercial usage were registered in Lithuania over the first five months of this year, a 38 percent rise since the relevant period last year, a market research company Autotyrimai reports.
Car buyers were especially active in May, when 1,022 new automobiles were registered, or 16 percent more than in May 2003.
Moller Auto, an authorized representative of Volkswagen, sold the biggest number of new cars last year and does not plan to yield its positions this year as well. 172 Volkswagen cars were sold in May and Moller Auto occupied 16.8 percent of the new car market.
Representatives of Renault ranked second among car distributors in May (97 cars) with 9.5 percent market share. Toytoa and Peugeot shared the third and the fourth positions.
Verslo Zinios, Lietuvos Zinios

Insurance company expands its chain
Three new customer care departments of a Lithuanian insurance company Lietuvos Draudimas (Lithuanian Insurance or LD) were opened in Vilnius on Wednesday.
The biggest insurance company of Lithuania is actively investing in development. It is planned to open 10 new department of the company all over Lithuania. Its chain will include 60 agencies. LD plans to hire new insurance consultants, 1,200 insurance consultants already work for the company.
Some 450 new insurance policies are written in Vilnius every day; up to 100 clients address Vilnius Loss Regulation Centre due to loss compensation every day.
Over LTL 114 million were paid as compensations to clients last year.
The State Insurance Supervisory Commission reports that Lietuvos Draudimas controlled 33.98 percent of the non-life insurance market in the first quarter of the year.
Lietuvos Rytas

Wednesday, 9th of June

1.5 percent inflation recorded in May
Rising food, transport and healthcare prices pushed Lithuania's consumer price index (CPI) 1.5 percent higher in May, compared with April, the Statistics Department has reported. This was above analysts' forecast of a 0.9 percent inflation rate for the month.
It was the third straight monthly rise for the CPI after a 0.4 percent increase in April and a 0.5 percent increase in March.
The CPI grew by 1.1 percent over the year from May 2003 to May 2004.
According to the report, prices of consumer goods rose by 1.6 percent in May versus April, while prices of services edged up by 0.3 percent.
Experts claim that rapidly growing consumer prices might negatively affect the residents of the country as well as the Lithuania’s economy in general.
Renatas Dundonis, board member of Sampo bank, claims that growth of wages will not catch up with the inflation rate.
Respublika, Lietuvos Rytas, Kauno Diena, Lietuvos Zinios

LTL 200 million investments in constructions of a giant trade centre near Kaunas
Baltic Shopping Centres (BSC), Lithuanian shopping centre developer, has laid the corner stone of trade and leisure mall MEGA in the Kaunas suburb of Vytenai. Investments in the construction of the trade and entertainment centre Mega are expected to reach approximately LTL 200 million. The project should be completed by fall 2005; 800 new working places will be created.
The territory of the trade and entertainment centre near Vilnius-Klaipeda highway will occupy 26-hectare area. The centre will have 100,000 square metres of premises for lease and a 3,500-space parking lot.
Lietuvos Rytas, Kauno Diena, Verslo Zinios

Lithuania's gross domestic product (GDP) surged by 7.7 percent in the first three months of 2004, compared with the January-to-March period of previous year.
The country's GDP came in at LTL 13.357 billion at current prices in the first quarter of the year.
In January-March, LTL 3,876 of GDP fell per capita in Lithuania, 8 percent rise year-on-year.
Lietuvos Rytas, Verslo Zinios

Threatening situation for beer industry
The conflict between the retail trade chain VP Market and the brewery Svyturys-Utenos Alus has exceeded the limits of an internal conflict between two companies: the Lithuanian Brewers’ Association claims that the current situation is threatening for the whole beer industry.
Saulius Galadauskas, corporative affairs director of BBH for the Baltic countries, says their version has turned to be true: the heads of VP Market do not accuse the brewery of a plot anymore but they demand it only to share the profit with VP Market.
Early this week, associations of neither brewers nor traders interfered with the conflict, saying that it was an internal problem of the two companies. However, yesterday the Lithuanian Brewers’ Association published a statement saying that the latest claims of VP Market concerning the conflict with the brewery Svyturys-Utenos Alus justified brewers’ concerns that VP Market seriously planned to replace high quality Lithuanian beer with the cheap imported production. The association is organising a meeting on Friday to discuss the current situation in the beer market.
Verslo Zinios, Kauno Diena

Tuesday, 8th of June

More electricity has been produced in Ignalina
Lithuania's Ignalina Nuclear Power Plant (INPP) has said it produced a total of 7.1 billion kilowatt-hours (kWh) and sold 6.54 billion kWh of electricity during the first five months of this year, a 2.8 percent rise year-on-year.
The INPP reported a 17.1 percent increase in output, to 1.1 billion kWh, in May, compared with the same month a year ago. Its sales grew by 18.5 percent, year-on-year, to 1.019 billion kWh of electricity last month.
The Ignalina plant reported that its annual power output reached 15.484 billion kWh in 2003, a 9.5 percent increase over the previous year. It posted a 10.5 percent growth in electricity sales, to 14.250 kWh, last year.
This year the plant's annual sales are forecast to decline to some 13 billion kWh of electricity.
Lietuvos Zinios

Plastic bottle producer will expand
Nemuno Banga Group, a Lithuanian-Austrian joint venture, has unveiled ambitious plans to become one of the largest PET bottle producers in Europe and to double its market share to 6 percent by 2005, from 3 percent at the start of this year.
According to Arvydas Juozeliunas, CEO of Nemuno Banga Group, they were looking to acquire PET plants in the Czech Republic and Bulgaria and to build another plant in the Czech Republic as part of their expansion plans.
The company is also planning to open two new plans in Russia in 2004.
Construction of a plastic PET bottle raw material plant will be started in Rimkai, near Klaipeda, in the nearest future. Nemuno Banga already operates plants in Lentvaris (Lithuania), St. Petersburg and Ryazan (Russia) and Kiev (Ukraine).
Lietuvos Zinios, Verslo Zinios

New air carrier in the sky
A new player, Gintarines Avialinijos (Amber Air), is coming to Lithuania's airline industry with plans to launch regular flights at the end of this year.
Gintarines Avialinijos is planning to begin providing chartered flights within Europe in the second half of July.
The company will use a leased Saab 340B for charters.
Based in Karmelava, close to Lithuania's second-biggest city of Kaunas, Gintarines Avialinijos plans to consolidate its positions in the aviation service market. The marketing director of the company Gintare Rimkuviene says they are already negotiating with various companies on future charters.
She reports that the company plans to acquire four more planes by 2005. Gintarines Avialinijos will apply for permission to launch regular flights.
According to information that has not been officially confirmed, the new Lithuanian air carrier is controlled by a group of eight companies that are owned by a single German shareholder and operate in Europe, Asia and Africa.
Verslo Zinios, Lietuvos Rytas

Monday, 7th of June

Russia renewed export of Lithuanian food products
Russia lifted restrictions imposed on import of Lithuanian milk, meat and other food products this weekend.
Kazimieras Lukauskas, director of the State Food and Veterinary Service, reported that during the negotiations with the European Commission on Saturday, the Russian veterinary service agreed to permit import of the food products from Lithuania and other European Union’s countries according to the veterinary certificates that have been valid so far until October 1.
Relying on the data of the Lithuanian Statistics Department, Lithuanian companies exported animal-origin products and cattle worth LTL 56.786 million, over the first quarter of this year.
Lietuvos Zinios, Kauno Diena, Verslo Zinios, Lietuvos Rytas

New sort of fuel
Lukoil Baltija, the operator of the biggest gas station chain in Lithuania, has launched trade in a new sort of bio-fuel, bio-diesel fuel.
Since Thursday, June 3, 10 gas stations of LUKoil have been selling the biofuel BD35. Juste Kostikovaite, Lukoil Baltija service manager, says they recommend the users to read the technical characteristic of the car before using the bio-fuel. According to her, this sort of fuel is better suited for the engines of new cars.
Another sort of bio-fuel, bio-petrol, is also available in the LUKoil chain.
Lietuvos Rytas

Samsonas defended its brand
The Lithuanian Court of Appeal has satisfied the appeal of a meat processing company UAB Samsonas and decided to change the decision of Vilnius Area Court and to forbid AB Vilniaus Mesos Kombinatas (Vilnius Meat Factory) to use the brands Tarnybine Daktariska Desra (Office Doctor Sausage) and Tarnybines Pieniskos Desreles (Office Milk Sausages) in the commercial activity.
Kaunas-based company Samsonas, which owns the brands Tarybine Daktariska (Soviet Doctor Sausage) and Tarybines Pieniskos (Soviet Milk Sausages) has been producing products marked with these brands since 2001. It patented the brands in 2002, nevertheless, AB Vilniaus Mesos Kombinatas started selling Tarybines sausage at the end of the year. Later on, the company corrected the brands a bit and Tarybines turned into Tarnybines.
The sales and services of Samsonas amounted to LTL 18.7 million in the first quarter of this year, a 7.9 percent rise year-on-year.
Verslo Zinios, Kauno Diena

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