Saturday, 19th of June
Retail trade grows by 14.5 percent
This year, retail trade volume has increased by 14.5 percent thanks to rapidly growing sales of home appliances, construction materials and clothes. In January-April, the overall turnover of shops, car services, gas stations, restaurants and other retail trade places amounted to LTL 5.865 billion, the Department of Statistics has reported.
Turnover of companies selling textile, clothing and shoes rose by 24.1 percent while that of furniture, home appliances and construction materials increased by 38.2 percent.
Turnover of restaurants and bars accounted for LTL 169.3 million (VAT excluded) in January-April 2004, a rise of 14.3 percent if compared to the respective period last year. Turnover of large restaurants and bars that employed more than 50 people increased the most over the period by 25.3 and 35.4 percent respectively.
Snoras has introduced payment cards with owners photograph
Snoras, the fourth-largest Lithuania's bank by assets controlled by Russian investors, has put an international Visa payment card with the owners photograph on the market.
The card offered additional security guarantees, Juozas Lukauskas, the director of Snoras retail banking service, says. The card was designated for a transitional period until complete installation of microchip card technologies by Lithuanian and European banks, he added.
Payment cards with owner's photo were particularly popular in Holland, Sweden, Norway, other European countries, Arunas Marcinkevicius, head of project office of product development department of the bank, says. Snoras has issued almost 480,000 payment cards by early June.
"Installation of microchip card network in Lithuania will be wrapped up by 2008 at the earliest. The project will require huge investments by banks and Mokejimo Korteliu Sistemos (Payment Card Systems), Lukauskas said adding that European banks were expected to complete introduction of cards with integrated microchip by 2010.
Milk purchase prices surged by 43.4 percent over a year
Amid a spike in competition among Lithuanias milk processors, the average milk purchase price surged by 43.4 percent, to 465.2 litas (EUR 134.84) per ton in May, compared with May 2003.
The average milk purchase price edged up by 3.5 percent in May versus April, and rose for the third consecutive month.
The average milk purchase price in Lithuania rose by 28 percent, year-on-year, to 442.4 litas per tons in the January-to-May period of this year.
Lithuania abandoned the previous system of milk grading, starting from May 1, 2004, and restricted the purchase to milk that met the EU requirements.
Lithuanias milk processors purchased a total of 433,200 tons of milk in the first five months of this year, a rise of 8.9 percent from the January-to-May period of previous year.
In May alone, milk purchase grew by 8.6 percent, year-on-year, to 114,700 tons.
Friday, 18th of June
Beer sale of VP Market grows
The biggest retail trade chain operator in the Baltic countries VP Market sold 17.12 million dal of beer in the trade centre Minima, Media, Maxima and Saulute in January-May 2004, or 15.6 percent more than over the relevant period last year.
At present, the trade centres Minima, Media and Maxima offer the assortment of nearly 200 brands of beer: 94 Lithuanian brands and 100 foreign brands of beer. Soon, 10 new brands of German and Czech beer will be presented to the buyers.
Ignas Staskevicius, CEO of VP Market, claims that beer sales are growing thanks to big assortment of beer at an acceptable price.
VP Market controls a trade chain comprising 271 trade centres Minima, Media, Maxima and Saulute in the three Baltic countries.
VB Gyvybes Draudimas is creating a chain
VB Gyvybes Draudimas, a life insurance subsidiary of Vilniaus Bankas, is creating a chain of mediators that will be distributing only the companys insurance products.
VB Gyvybes Draudimas already has more than ten insurance mediators and by the end of this year, a hundred of people should be distributing the insurance products of the company, the CEO of VB Gyvybes Draudimas Baiginat Kamuntaviciene said in a press conference on Thursday.
According to Kamuntaviciene, VB Gyvybes Draudimas will be a single life insurer in the country, insurance products of which will be sold through the chain of Vilniaus Bankas and by external sellers.
Verslo Zinios, Lietuvos Rytas
Budget fills in faster than expected
Lithuania's national budget revenues totalled LTL 4.664 billion in the first five months of 2004, exceeding the revenue target by LTL 113 million, or 2.5 percent.
The central government's five-month budget revenues amounted to LTL 3.961 billion, which was LTL 67 million, or 1.7 percent, above forecasts. Municipal budget revenues exceeded the target by LTL 246 million, or 53.8 percent, and reached LTL 702.9 million, the Finance Ministry reported based on preliminary data.
Thursday, 17th of June
Banks attention to Mazeikiu Nafta did not subside
The European Bank for Reconstruction and Development (EBRD) is not scared of Kremlins attack against Yukos, the operator of the Lithuanian oil refinery Mazeikiu Nafta (Mazeikiai Oil) and is waiting for the long-term business plan of the Lithuanian company.
Lithuanias economy vice-minister Nerijus Eidukevicius has recently met with the vice-president of EBRD Noreen Doyle in Luxembourg. He says the bank remains interested in the new investments in Mazeikiu Nafta.
It is planned to organise a board meeting of Mazeikiu Nafta in three weeks. In the meeting, the business plan of the company will be discussed and after this plan is ratified, it will be handed over to EBRD.
The bank would like to acquire a 10 percent stake in Mazeikiu Nafta, it would also fund the modernization projects of the company and would re-fund the credits issued by the Government to the Lithuanian oil refinery.
They did not renounce plans after deal was cancelled
Having cancelled the deal over swapping of shares in the subsidiaries, Alna and Sonex Group claim that they will provide programming services in the three Baltic countries. Sonex will strengthen the companies that it had promised to hand over to Alna, while Alna considers various variants of expansion to Latvia and Estonia.
Arunas Bartusevicius, the head of Sonex Group, reports that Sonex Sistemos, Softex Latvija and Softex Lietuva will be merged into a new group by the end of the month. This group will be working on e-government, state register, e-commerce, document management and other systems and will also offer integrating solutions. The projected annual turnover of the new group is LTL 20 million, the investments stand at LTL 10 million.
Alna will look for other possibilities to enter the Baltic countries. Tomas Milaknis, head of Alna, stresses that the strategic goal of the company remains the same: to provide infrastructure, business management system and programming services in the three Baltic countries.
Smaller excises would stop contraband
Lithuania could address the European Union (EU) over the cutting of the minimum level of tariffs of excise duties levied on cigarettes, alcohol, petrol and sugar, which, in the opinion of Lithuanian Free Market Institute, should contribute to a decline in smuggling.
The study into the approach of Lithuania's nationals towards the smuggling of goods subject to heavier excise duties has confirmed the hypotheses of the institute concerning the excessive rates of excise duty levied on certain goods.
The Finance Ministry suggests strengthening border control. It does not see the necessity to initiate such discussions now, as Lithuania has not reached the set tariff size yet. Vitas Vasiliauskas, vice-minister of finance, stresses that the country uses advantages of the transitory period. Reacting to the situation, we can change the excise rise schedule. We plan to postpone rise of the cigarette excise in 2005 for another year, he says.
Verslo Zinios, Lietuvos Rytas, Respublika, Lietuvos Zinios
Wednesday, 16th of June
Iki will use money for development
The retail trade chain Iki, which is approaching the maximal limit of the loaned and its own capital has decided to fund further development by placing a new equity issue worth some EUR 50 million that will be purchased by the European and US institutional investors. The current owners of Iki will retain control of the group and will use the bigger part of the funds received for shares for the chains expansion abroad.
So far, Iki has invested only in Lithuania and at present its chain comprises 124 Iki, Ikiukas and Pigiau Grybo stores. The CEO of UAB Palink Aidas Mackevicius claims that the chain is interested in the possibilities of investments in Latvia, Estonia, Kaliningrad and Belarus.
Sonex and Alna halted swap
Tomas Milaknis, CEO of AB Alna and Ar_nas Bartusevicius, board chairman of UAB Sonex Grupe, have signed an agreement, cancelling the previous agreements over the swap of the shares in the subsidiary companies.
Sonex Grupe decided to set up a new group of companies in the Baltic countries, jointly with its shareholder, the European Bank for Reconstruction of Development (EBRD). The new group will provide programming and business management solution services.
Verslo Zinios, Lietuvos Rytas
Western countries protect themselves from cheaper tobacco products
Three more countries Ireland, Austria and Belgium announced that they will impose restrictions on excise-free tobacco products carried from Lithuania in personal baggage.
A maximum of 200 excise-free cigarettes will be allowed to be brought to the aforementioned countries.
Denmark, Finland, Sweden, Germany and the United Kingdom have also been applying similar restrictions since May 1.
The restrictions are to be applied until the end of 2009, when the transition period of reaching the minimal excise tariff negotiated by Lithuania is over.
Lietuvos Rytas, Verslo Zinios, Lietuvos Zinios
Tuesday, 15th of June
Deal of Alna and Sonex squeaks
Transaction between Alna and Sonex group, the largest Lithuania's IT companies that intended to swap subsidiaries, came across unexpected hurdles.
Disagreements emerged due to differences in the opinions of shareholders of both companies, unofficial sources have reported.
Arunas Bartusevicius, Sonex Group owner, could not confirm that the deal would be closed eventually.
Tomas Milaknis, Alna CEO, refused to comment on the situation, noting that the deal had not been finalized, yet.
Alna intended to take over the business solution and programming business of Sonex, while Sonex Group was to take over the IT infrastructure solution business of Alna.
Export is the rescue of Svyturys-Utenos Alus
AB Svyturys-Utenos Alus is compensating the lost sales in the biggest retail trade chain UAB VP Market with increasing beer export. In the second half of the week, it will become clear whether the supply of AB Svyturys-Utenos Alus beer to the trade centres of VP Market will be renewed. The trade chain suspended purchase of production from the breweries controlled by BBH in early June.
A meeting of the heads of BBH Baltic took place on Monday. Tomas Kucinskas, CEO of AB Svyturys-Utenos Alus informed the meeting participants about the relations with VP Market. Saulius Galadauskas, corporative affairs director of BBH, told VZ that the problem was being solved but no final solution has been passed yet.
Ignas Staskevicius, head of VP Market, does not forecast how long it will take for the two companies to settle the conflict but he says that they might solve the conflict sooner than the Competition Council will complete its investigation concerning domination of AB Svyturys-Utenos Alus in the market.
LTL 41 million for future pensions
Today the residents of Lithuania will start accumulating pensions in private funds. On the whole, LTL 40.9 million will be remitted to the private pension funds on June 15. The social insurance fund Sodra will remit this money for the citizens who have signed agreements with the operators of private pension funds. 441,606 residents of the country start accumulating pensions in pension funds. Sodra will remit money to the accounts of pension funds on the quarterly basis. On June 15, the money will be remitted for the first quarter of the year.
2.5 percent of salaries will be remitted to residents accounts. Next year, the remitted sum will grow to 3.5 percent, in 2006 4.5 percent and in 2007 it will amount to 5.5 percent.
The biggest amount of funds will be remitted to the pension funds of VB Investiciju Valdymas, controlled by Vilniaus Bankas, which has signed nearly 134,000 agreements. It is followed by Hansa Investiciju Valdymas and Hansa Gyvybes Draudimas controlled by Hansabankas with 57.3 thousand agreements and Commercial Union Lietuva Gyvybes Draudimas with 62.5 thousand agreements.
Lietuvos Rytas, Lietuvos Zinios
Monday, 14th of June
Profit of Invalda groups companies LTL11.9 million
The group of companies controlled by Lithuania's investment firm Invalda posted consolidated net earnings of LTL 11.923 million on consolidated sales of LTL 155 million for 2003.
As of late December 2003, the group had combined assets of LTL 188.2 million. Total liabilities amounted to LTL 92.5 million, of which short-term liabilities were LTL 31.6 million and long-term liabilities were LTL 60.9 million, Alvydas Banys, vice-president of Invalda, reported.
This is the first time that Invalda has released its consolidated financial statement, which was prepared by the auditing firm KPMG Lietuva under the International Accounting Standards.
Invalda alone reported a net profit of LTL 2 million for 2003, up from the 2002 net profit of LTL 743,089.
Invalda, which is engaged in financial, corporate and real estate management, directly owns 11 companies. It controls around 20 companies in total, including those owned by its subsidiaries.
Rimi Lietuva hopes to boost sales
Rimi Lietuva, one of the largest retail chains in Lithuania, has said it hopes to overcome what it called "a stopover" in the preceding year and improve sales performance in 2004. Rimi Lietuva is going to merge with the Finnish trade chain Kesko Food this year.
Rimi Lietuva this year should become part of a Baltic joint venture forged with the Finnish trader Kesko Food. "Last year we reported lower sales because of the reconstruction work in our largest supermarkets, during which they stood idle for some time. This year we project growth," Inga Skisaker, CEO of Rimi Lietuva, said.
In 2003, the operator recorded sales of LTL 407 million, 7 percent lower than sales in 2002.
The chain comprises 33 trade centres at the moment; it plans to open the first Rimi Hypermarket trade centre in Kaunas this year.
More electricity is produced
Relying on the data of Eurostat, the EU statistics agency, Lithuania produced by a third more electricity than Latvia and Estonia taken together in 2003. However, Lithuanias share in the EU electricity production market accounts for 0.59 percent only.
In 2003, Lithuania boosted electricity output by 6.8 percent year-on-year. Demand for electricity in the domestic market shrank by 3.3 percent in 2003.
Lithuanias export grows at a slower pace than import
Lithuanian exports rose by 14.3 percent in the first four months of 2004, compared with the same period in 2003, while imports grew at a 16.7 percent rate, the Statistics Department has reported.
Lithuania's four-month exports reached LTL 7.759 billion, while four-month imports totalled LTL 10.778 billion, the Statistics Department reported.
The country's foreign trade deficit widened by 23.4 percent to LTL 3.019 billion, from LTL 2.444 billion in the same period a year ago.
Lithuania's exports to the European Union increased by 15.8 percent to LTL 3.236 billion over the reporting period and accounted for 41.7 percent of the total. Exports to nine new EU member states rose by 8.4 percent to LTL 1.394 billion (18 percent of the total), while exports to the CIS markets were up 10.8 percent to LTL 1.279 billion (16.5 percent of the total).
Kauno Diena, Verslo Zinios
Baltic Weekly MonitorA