Saturday, 10th of July
Trade giant accumulates forces in Riga
The biggest retail trade chain in the Baltic countries, VP Market, is consolidating its positions. The heads of the chain decided to move the headquarters of the company to Riga, Latvia. The CEO of VP Market Ignas Staskevicius has been appointed the board chairman of the company in Lithuania, Latvia and Estonia. Soon, he will leave to the capital of Latvia.
Vega Vaitkeviciene has been appointed the new CEO of VP Market. She will start working in the new post as of July 12. The main goal of the new leader is to consolidate the leading positions of the company in Lithuania and to implement the further plans, i.e. to open a new non-food trade centre Ermitazas.
Lietuvos Rytas, Respublika, Lietuvos Zinios
Inflation was the lowest in Lithuania
Relying on the data of the Baltic statistics departments, the consumer and service prices increased in all the three Baltic countries in June. The smallest inflation was recorded in Lithuania, the highest in Latvia.
Consumer prices in Lithuania edged up by 0.1 percent in June, compared with May, which was in line with analysts' forecasts, the country's Statistics Department reported.
In Latvia and Estonia the inflation rate in June increased 0.6 percent and 0.3 percent respectively month-on-month.
It was the fourth straight monthly rise for the consumer price index (CPI) in Lithuania. However, the monthly inflation rate slowed down last month from 1.5 percent in May, 0.4 percent in April and 0.5 percent in March.
Respublika, Lietuvos Zinios
Profit of Vilniaus Bankas LTL 61 million
Vilniaus Bankas, Lithuania's biggest commercial bank by assets, announced on Friday a first-half net profit of LTL 60.9 million, a rise of 4.6 percent from a net profit of LTL 58.2 million a year ago.
The bank made a net profit of LTL 132.276 million for the full year 2003. The bank forecasts a decline in annual net earnings to LTL 110.423 million in 2004, as it started paying the profit tax this year after a five-year exemption period.
The Vilniaus Bankas Group's assets rose by 29.1 percent to LTL 8.576 billion during 2003. Deposits grew by 6.4 percent to LTL 4.874 billion, while net loans surged by 50 percent to LTL 4.61 billion.
Friday, 9th of July
Anyksciu Vynas has been sold
The Lithuanian government has sold Anyksciu Vynas, the last remaining state-held alcoholic beverage producer, to Alita, a rival distiller, for LTL 25.61 million.
The deal on the privatization of a 72.93 percent equity stake in Anyksciu Vynas was signed on Thursday.
The sale of Anyksciu Vynas marks the completion of privatization of Lithuania's four state-owned alcoholic beverage producers.
The buyer has pledged to retain at least 90 percent of jobs in Anyksciu Vynas for a year.
Last year, turnover of Anyksciu Vynas increased by 4.7 percent, to LTL 44.016 million, however, the company incurred LTL 7.5 thousand loss.
Lietuvos Zinios, Lietuvos Rytas
Goal LTL 4 billion turnover
VP Market, operator of the biggest retail trade chain in the Baltic countries, posted LTL 1.97 billion turnover for the first half of this year in Lithuania, Latvia and Estonia, an 18.7 percent rise year-on-year.
Turnover growth has been predetermined by the sales, other campaigns and the discount program implemented in the trade centres of the chain.
At present, VP Market controls a trade chain consisting of 274 trade centres, 187 of which are in Lithuania, 83 in Latvia and 4 in Estonia.
Last year, VP Market posted LTL 3.593 billion turnover, a 17.9 percent rise year-on-year. This year, the company plans to boost turnover by 10 percent, to LTL 4 billion.
Lietuvos Rytas, Lietuvos Zinios, Respublika
Sonex Group is reorganised
UAB Sonex Grupe and its main shareholder the European Bank for Reconstruction and Development have passed a decision to split the group in two units, Sonex Infrastructure Solutions Group and Sonex Software Solutions Group.
Sonex Grupe, meanwhile, will reorganize into the holding company Sonex Holding, with the capital of LTL 31.2 million.
Authorised capitals of Sonex Infrastructure Solutions Group and Sonex Software Solutions Group will be formed in several weeks.
Arunas Bartusevicius, board chairman of Sonex Grupe, claims that the company will report another privatized IT company next week.
Thursday, 8th of July
LTL 85 million project for internet in countryside
A project of broadband internet in rural areas is being prepared; value of the project will amount to LTL 85 million. The goal of this project is to improve possibilities of rural residents to use internet. Lithuanian optical network building companies will be invited to participate in the tender for this project next January.
Laimutis Telksnys, head of the Recognition Process Department under Mathematics and Informatics Institute, claims that the broadband computer network (RAIN) will be created in the centres of rural sub-districts. At present, businessmen are not interested in expanding infrastructure of broadband computers in countryside. Commercial organizations will be able to use the computer network for provision of internet services to rural residents, while residents will be able to use internet for developing their business.
Under the project, it is planned to install internet access centres in 504 rural sub-district offices.
The Mathematics and Informatics Institute and the Committee on Information Society’s Development claim that the project will be prepared by January 2005, while its implementation will take three years.
Yukos puzzle for Prime Minister
Lithuanian Prime Minister Algirdas Brazauskas said on Wednesday that his government is ready to react to changes at Russia's oil giant YUKOS if they directly impact Mazeikiu Nafta (Mazeikiai Oil), but rules out a share buyback.
YUKOS Finance, the Dutch-registered subsidiary of YUKOS, holds 53.7 percent of Mazeikiu Nafta's stock and the managing rights in the Lithuanian oil refining and transportation complex.
Brazauskas on Wednesday met with Lithuania's acting President Arturas Paulauskas, Economy Minister Petras Cesna and Tomas Gizas, YUKOS' representative to Lithuania, to discuss possible changes in Mazeikiu Nafta due to the problems that YUKOS is experiencing in Russia.
The head of the Lithuanian government said there would be "no disaster" if the Russian government or other Russian company, for example, Gazprom, took over the shares in Mazeikiu Nafta as a result of changes in the Lithuanian company's shareholder structure.
Brazauskas said that the most important thing was to ensure sufficient oil supplies to Mazeikiu Nafta, noting that there were no signs that any disruption in crude deliveries to the refinery could take place.
Lietuvos Rytas, Lietuvos Zinios, Verslo Zinios
E-banking development in Lithuania
Bank clients in Lithuania use electronic banking services more and more often. The number of e-banking service users in some Lithuanian banks has increased twofold or fourfold over the last two years. The leaders of e-banking services are Vilniaus Bankas and Hansabankas. As of June 1, 2004, 400,000 clients used the internet banking system hansa.net, while VB Internetas had 302,000 clients.
Vilniaus Bankas also offers clients the services VB Internetas, VB Linija, VB Mobilinija and VB Telebankas.
The director of Vilniaus Bankas E-Banking Department Gediminas Valancius projects big success of the latest system VB Mobilinija. Users of this service receive information from the bank about the changes in their bank accounts by SMS. According to Valancius, mobile banking is the future banking because in future many people will have mobile telephones with internet access and internet and mobile banking will merge.
Banks also lay their hopes on activities of the alliance Langas I Ateiti (Window to Future), the goal of which is to boost the internet penetration rate in Lithuania till the European Union’s average in three years. The alliance plans to create some 300 new working places.
The inter-bank settlement system project Litas will benefit development of e-banking as well. Banks have already changed the account numbers of consumers, while the project will be ended in September. Then the banks will be able to perform inter-bank settlements in real time.
Wednesday, 7th of July
Domestic market is already too small for brewers
The Lithuanian beer market grew 6.3 percent in the first six months of 2004 year-on-year, from 11.237 million to 11.950 million dal (decalitres).
In June alone, nine largest breweries under the Lithuanian Brewers' Association sold 2.889 million dal, an increase of 23.3 percent compared to June of 2003.
The Lithuanian Brewers’ Association, however, forecasts that this year, growth of the domestic beer market will constitute only 2-4 percent.
Svyturys-Utenos Alus, controlled by the Scandinavian concern Baltic Beverages Holding, sold 5.61 million litres of beer in the first half year, a 3.7 percent rise year-on-year. Svyturys-Utenos Alus remains the leading brewery in Lithuania; it is followed by Kalnapilis-Tauro Grupe, controlled by Danish Brewery Group, which reached 2.842 million litre turnover over the given period, a 6.3 percent rise year-on-year.
Turnover of a Kaunas-based brewery Ragutis controlled by the Estonian brewery A.Le Coq increased by 21.1 percent over the first half year, to 1.219 million litres, while the turnover of Gubernija brewery shrank by 1.1 percent, to 1.189 million litres.
The Lithuanian breweries reported their six-month beer export boosted twice to 500,000 decalitres (dal) compared to corresponding period in 2003.
Kauno Diena, Respublika, Lietuvos Zinios
Country’s business leaders rake billions
MG Baltic, which reported revenues of LTL 742.8 million for 2003, removed Ignalina nuclear power plant (INPP) from the top ten of largest Lithuania's companies in the list of 500 Lithuania's enterprises ranked by revenues by Verslo Zinios business daily each year.
The ranking is headed by Mazeikiu Nafta (Mazeikiai Oil or MN), the oil concern controlled by the Russia's YUKOS. It is followed by VP Market, the largest Baltic retail network operator.
MN reported a turnover of LTL 5.297 billion for 2003, a rise of 10.87 percent from 2002. Meanwhile, VP Market has announced that its sales surged by 18.7 percent, to LTL 3.093 billion.
Lietuvos Energija (Lithuanian Energy), the power utility with 2003 revenues of LTL 919.6 million, was removed from the third position by the Achema Group, which posted a turnover of LTL 994.5 million for last year.
Palink, the operator of IKI retail chain, ranked the forth with revenues of LTL 982 million, while Sanitex, the consumer goods trader, ranked the fifth with annual sales of LTL 950 million. The top ten of Lithuania's companies also includes Lietuvos Energija, Lietuvos Gelezinkeliai (Lithuanian Railways), Lietuvos Telekomas (Lithuanian Telecom) group, Omnitel, the top wireless operator, and MG Baltic.
Mazeikiu Nafta is preparing for the worst
As the bankruptcy of the Russian oil giant YUKOS seems to be approaching, the Lithuanian oil refinery Mazeikiu Nafta (Mazeikiai Oil or MN), controlled by the Russian company, is preparing for the derangements of oil supply.
Russian experts warn that bankruptcy of YUKOS could be expected any day now. Meanwhile the heads of Lithuania claim that MN does not face any threat and they clearly do not know what should be done next.
Early this week, Lithuania’s PM Algirdas Brazauskas asked“not to panic” over the events related to the Russian oil concern YUKOS and said that he believed that the company will not be ruined. He admitted that in case YUKOS faces bankruptcy, Lithuanian authorities will address the Russian government.
Respublika, Verslo Zinios, Kauno Diena
Monday, 5th of July
Klaipedos Duona will not yield positions
AB Klaipedos Duona does not plan to yield the second position in the bread market of Lithuania: having posted LTL 34 million turnover last year, the company plans to earn a similar turnover this year as well.
Kaunas-based company Fazer Gardesis, controlled by Fazer Bakeries, projects LTL 32 million turnover for this year and plans to boost its market share in Lithuania to 12 percent.
According to the latest market researches ordered by the Kaunas-based company, Fazer Gardesis occupied 10.02 percent of the country’s bread market over the last two months in terms of finances and 9.1 percent of the market in terms of tons.
AB Klaipedos Duona claims that it controls a 10 percent market share.
Active marketing improved Snaige’s results
Lithuania's Snaige, the largest manufacturer of refrigerators in the Baltic countries, posted a 17.5 percent growth in first-half sales, while its 4-month profit doubled. Last year, the company invested in modernisation of equipment and this year it plans to focus on its marketing abroad.
The company reported total sales of LTL 154.647 million for the first six months of 2004, up from sales of LTL 131.610 million in the same period last year.
Snaige's plant in Alytus raised its production output by 13 percent, year-on-year, to 228,600 refrigerators.
The company reported LTL 17.1 million pre-tax profit in four months of this year, or 2.1 times more than over the relevant period last year.
Verslo Zinios, Respublika
Foreign banks do not ignore Lithuania
Possibilities of foreign banks in Lithuania are valued differently.“It is difficult to enter a small market with the new services because they will not be low-priced due to their big cost,” the finance minister Algirdas Butkevicius said.
The adviser of the president of Vilniaus Bankas Gitanas Nauseda believes that attempts of some foreign banks to enter the Lithuanian market imply that there is still a niche for their services. According to him, new foreign banks in Lithuania could provide all the services with the exception of saving programs therefore they will not be collecting deposits. Most likely, foreign banks would concentrate on the wholesale market and big clients.
At present, 10 commercial banks and three branches of foreign banks Polish Kredyt Bank, German Vereins-und Westbank and Nordea Bank Finland operate in Lithuania. There are also three agencies of foreign banks: the Latvian Balticums and Rietuma Banka and the Polish Raiffeisen Bank Polska.
Baltic Weekly MonitorA