Observer "Lietuva"
WEEK 3rd

Saturday, 17th of January

Profits of Lithuanian banks almost reach LTL 240 million
Commercial banks operating in Lithuania racked up combined profits of LTL 239.9 million during the previous year – 63.4 percent more as compared to 2002, according to pre-audit figures released by Lietuvos Bankas on Friday.
Reinoldijus Sarkinas, chairman of the board in the central bank of Lithuania, shred his worries in press conference on Friday that the financial institutions mostly capitalized on an 80 percent reduction of specific provisions, by LTL 67.6 million, and the recovery of some written-off loans. Meanwhile, profit from interest grew only by LTL 9 million or 2 percent last year.
Ten Lithuanian banks and one branch of a foreign bank gained a combined LTL 241.4 million, while two branches of foreign banks reported a loss of LTL 1.5 million.
Vilniaus Bankas posted the largest net profit of LTL 137.264 million earned during 2003. Hansabankas contributed LTL 61.043 million, and Nord/LB Lietuva added LTL 12.743 million.
Sarkinas said a positive development observed during the previous year was the decreasing market share of the three leading commercial banks - Vilniaus Bankas, Hansabankas, and NORD/LB Lietuva.
(Lietuvos Rytas, Respublika, Lietuvos Zinios)

New head of Hansabankas to be appointed soon
Giedrius Dusevi_ius, presently a deputy chairman of Hansabankas and a CEO of Hanza Lizingas since 1996, is to be appointed the chairman of Hansabankas, the second largest commercial bank in Lithuania.
The new leader of the bank was announced on Friday by Anders Sahlen, the chairman of Hansabank group council.
Giedrius Dusevi_ius said he will continue the work of his predecessors. Hansabankas would try to become not only the leader but also the most universal bank. Dusevi_ius thinks the bank still has things to achieve in the retail banking, business financing, leasing and payment card fields.
(Lietuvos Rytas, Respublika, Lietuvos Zinios)

Internet banking usage grows in Lithuania
The total number of Internet banking users registered at 10 Lithuanian commercial banks reached almost 640,000 as of late December of 2003, representing a 2-fold increase from the end of 2002.
Hansabankas, the second-largest Lithuania's bank by assets, remained the leading Internet banking service provider in Lithuania with the number of users of hanza.net, the bank's online banking product, doubling to more than 340,000 as of early January, 2004, from the user number a year ago.
Vilniaus Bankas, Lithuania's largest bank in terms of assets, had almost 250,000 online customers at the end of December, a 2-fold rise as compared to the VB Internetas service users a year ago.
Other commercial banks lagged far behind the two leading players in the country's Internet banking market with some 50,000 Internet banking users in early January, 2004.
(Lietuvos Zinios)

Friday, 16th of January

Exceptional design boosts sales
Turnover of the Lithuanian knitwear company UAB Skinija was LTL 12 million in 2003. It is a 25 percent increase compared to 2002. Skinija has been growing rapidly since the year 2001, when its turnover was LTL 6.8 million. The forecasted turnover for 2004 is LTL 14.4 million.
The company claims the increase was due to the growing consumption, active marketing at sales places and products of exceptional design intended for the Lithuanian market.
Kestutis Rudagalvis, chairman of Skinija board, says socks, leggings, stockings and similar clothing becomes an important part of the European fashion, thus the demand for these products is growing.
Skinija plans to invest LTL 0.5 million this year into the production of socks meant for sports and active leisure.
(Verslo Zinios)

Daumantai condiments ready for export
UAB Vesiga, which has recently installed a new quality management system and invested LTL 1.5 million into new equipment, plans to boost its sales by 5 percent. The company will offer its Daumantai condiments for the Scandinavian market this year.
Saulius Grinkevicius, CEO of Vesiga, says the certification is an essential step for the integration into the European Union market. The company hopes ISO 9001:2000 certificate will make the process of the integration smoother.
The company exports its production to Latvia, Russia, the Netherlands and the United States. It started exporting to Ireland last year as well. Export currently account for 6.3 percent of the company's sales.
UAB Vesiga plans to erect a set of new greenhouses in the future and to expand their area from the current 6ha to 10ha.
(Verslo Zinios)

Turnover of Audimas grew by 17 percent
Audimas, the largest Lithuania's sportswear and leisurewear producer, reported sales of LTL 72.66 million for full year 2003, a rise of 17.1 percent from the sales of LTL 62.04 million in 2002. The company raised exports by 21.3 percent, year-on-year, to LTL 59.07 million from LTL 48.69 million.
Rimvydas Povilaitis, Audimas board chairman, said the increase was due to the growing interest in the production of Audimas from the Western companies. Besides, the new logistics system that gave more flexibility played its part as well, said Povilaitis.
Audimas aims to raise sales by some 10 percent in 2004, up to LTL 80 million.
The company plans to consolidate business ties with its current foreign partners and will pay a lot of attention for establishment of Audimas brand name in the Baltic countries. The company has stores in Latvia and Estonia.
(Verslo Zinios)

Thursday, 15th of January

Dvarcioniu Keramika plans rapid growth
Lithuania's Dvarcioniu Keramika, the leading manufacturer of ceramic tiles in the Baltic countries, reported a 5.6 percent sales rise for 2003 compared to the previous year and expects an even faster growth this year. The turnover of the company is expected to grow by 37 percent up to LTL 69.68 million.
Dvarcioniu Keramika invested around LTL 21 million in a new glazed tile manufacturing line, which was put into operation in October. The new line has boosted the company's annual production capacity by more than 40 percent, to 3 million square meters.
Tomas Vaisvila, marketing manager at Dvarcioniu Keramika, says the company expects to boost its sales in the Scandinavian markets this year. Thus, the production of the company will be taken to the exhibitions in Sweden and Finland.
The exports of the company amounted to LTL 27.27 million last year.
(Verslo Zinios)

Kautra will turned into the most advanced carrier
Investment company Hermis Fond_ Valdymas (HFV), which has recently purchased Lithuanian bus carrier Kautra, announced it will not change the field of activities of the company and Kaunas bus station.
HFV plans to invest LTL 30 million into the renovation of Kaunas bus station and Kautra bus park. There are plans to turn Kautra into the most advanced and profitable transport company in the Baltic region.
The purchase of Kautra will be financed by the own means and bank loans. The financial advisor of the deal was Nord/LB Lietuva, which will finance the purchase of Kautra if the need arises, told Andrius Necajus, head of the Investment Banking Department at Nord/LB Lietuva.
(Kauno Diena, Lietuvos Rytas)

LTL 43 million lost in the Lithuanian gambling institutions
Lithuania's gaming industry won a total of LTL 43 million from gamblers in 2003, up from LTL 12 million in 2002.
The state-licensed gambling operators raised a total of LTL 170 million in revenues in 2003, while winnings paid out came to LTL 127 million.
The country's gaming industry generated LTL 8.842 million in total tax revenues last year, up from LTL 2.6 million in 2002. The tax revenues, however, fell short of the government's estimate of LTL 15 million.
As of late 2003, there were 11 casinos, 21 gaming machine halls, a bingo hall and 60 betting shops in Lithuania. They operated a total of 100 gambling tables, as well as 522 slot machines offering unlimited winnings and 338 limited payout slot machines.
The law legalizing gambling in Lithuania came into force on July 1, 2001. The first legal gambling establishment was opened in early February 2002.
(Kauno Diena, Lietuvos Rytas, Verslo Zinios)

Wednesday, 14th of January

Nord/LB Draudimas started looking for partners
Representatives of the Lithuanian and foreign insurance companies are visiting Nord/LB Lietuva bank quite often these days. Their target is insurance company Nord/LB Draudimas.
According to Lietuvos Rytas, Ergo Lietuva was interested in the company but it looks like the Polish insurance company PZU, which owns Lindra in Lithuania, is interested in Nord/LB Draudimas as well.
Vygintas Bubnys, deputy chairman of Nord/LB Lietuva, says Polish and Scandinavian companies are interested in the insurance company. He adds that a decision has not been made yet.
According to Bubnys, the bank is looking for a partner to work together with the bank. He says more experience in the insurance field is needed. The bank is only considering a partnership plan and no talks concerning the sale of Nord/LB Draudimas are in progress.
(Lietuvos Rytas)

Siauliai-based company will use the name of AEG
UAB Siauliu Tauro Televizoriai (STT) will take the first TV sets carrying the name of AEG to Germany this month.
The Germans will be one of the largest customers of the Siauliai-based company this year. STT will make 16,000 TV sets for AEG in January. The amount accounts for 20 percent of the production planned in January.
The business plan approved by the company's board this week states that 1.4 million TV sets should be manufactured this year. The turnover of the company should reach LTL 420 million, while the profit is expected to be LTL 10 million.
STT will start the production of TV sets with the integrated DVD players and liquid crystal screens in April.
The main competitors of STT used to be the Turkish companies. However, executives of the company say their competitors in the Eastern Europe are growing rapidly as well. Besides, LG, Daewoo, Philips, Thomson are expanding their activities too.
(Verslo Zinios)

Zemaitijos Pienas to increase export volumes this year
Lithuania's third largest milk processing company Zemaitijos Pienas exported 5,500 tons of production in January-November period in 2003. The company plans to increase export volumes 2-3 times this year.
Zemaitijos Pienas expects to export 8,000-9,000 tons of cheese to the Italian, German, French, Spanish and other markets in the EU. Another 3,000 tons of cheese should be exported to the United States. The company is also looking to increase its export to Russia and the Baltic countries. Zemaitijos Pienas plans to sell 15,000-16,000 tons of cheese this year.
The successfully operating company has drawn interest from Hermis Fondu Valdymas, while there are rumours about its possible merger with the Norwegian company Synnove Finden. Zemaitijos Pienas has been looking for a strategic investor for the last several years.
(Verslo Zinios)

Tuesday, 13th of January

Danish company reinstated in the privatisation tender of LJL
The resolution of the State Property Fund (SPF) to reject the bid of Danish Trident Marine from the tender on privatization of Lietuvos Juru Laivininkyste (LJL), the Lithuanian shipping operator, was groundless, the court ruled on Monday, declaring the resolution of SPF null and void and obliging the parties to resume the tender.
The process of LJL privatization was suspended from early August, after the Danish company filed a claim against the resolution of SPF to reject the application of Trident Marine for taking part in the tender to privatize the Lithuanian shipping company. Trident Marine bid LTL 33 million for a 66 percent stake in LJL.
Unofficial sources have reported that another two bidders - a consortium of Danish Rederiet Fabricius and Norway's Continental Ship Management bid LTL 22.1 million for the holding, while the consortium of LJL CEO Vytautas Vismantas, Sanitex and the investment banking company Prime Investment offered the minimum price of LTL 20.09 million.
Both companies revised the bids up in early August, however, the bids will be assessed as soon as the court gives a nod for the resumption of LJL sell-off procedures.
Respublika, Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios

Lithuanian investor would have to pay LTL 16-20 million for the Scottish football club
Vladimiras Romanovas, owner of the Lithuanian football club FBK Kaunas, confirmed in the British press his intentions to buy the Scottish football club Dundee Football Club, which has recently been announced bankrupt. Experts claim the purchase would cost LTL 16-20 million for the Lithuanian investor.
Vladimiras Romanovas is one of the owners of _kio Bankas and shareholder of a number of other companies. Liutauras Varanavicius, president of the Lithuanian Football Federation, who visited the Scottish club together with Romanovas, is former chairman of _kio Bankas board.
_kio Bankas is one of the top five Lithuanian banks. Its three quarter profit in 2003 totaled LTL 3.4 million. The assets of the bank are estimated at LTL 1.09 billion as of September 30, 2003.
(Verslo Zinios)

Lithuanian brewery Ragutis raised sales by 5 percent last year
The Lithuanian brewery Ragutis, owned by the Finnish beer producer Olvi, raised sales of beer, cider and alcoholic beverages by 5 percent, year-on-year, to 24.733 million litres in the full year 2003.
The company managed to lift sales despite a decline of overall beer market in Lithuania.
Sales of Kaunas-based Ragutis on domestic market reached LTL 23.056 million, rising by 11 percent from 2002.
According to the data of Lithuania's Brewers Association, the beer market in Lithuania declined by 6.6 percent, to 241.63 million litres in 2003.
Ragutis, which boasted of the fastest growth among large Lithuania's beer makers last year, raised its market share by 1.5 percentage points, to 9.5 percent, ranking the fourth on the domestic market.
(Lietuvos Zinios)

Monday, 12th of January

YIT Kausta yields leading position to Panevezio Statybos Trestas
Kaunas-based AB YIT-Kausta, one of Lithuania's largest construction companies, announced turnover of LTL 120.6 million for 2003. Although the year was a successful one for the company, it has yielded the position of the market leader to Panevezio Statybos Trestas.
Antanas Butkus, CEO of AB YIT-Kausta, says the turnover of the company was down in 2003 compared to 2002. He notes, however, that the company wanted to avoid risky projects and earn more profit.
The main shareholder of AB YIT-Kausta is the Finnish company YIT Construction Ltd. Kaunas-based construction company plans to take part in all of the largest construction tenders of the year. Besides, it will expand the construction of the apartment buildings in Kaunas, Vilnius and Klaipeda.
YIT-Kausta has no plans to return to the Russian market but may participate in several construction projects in Finland.
(Verslo Zinios, Kauno Diena)

Lithuania ranks 22nd in the Index of Economic Freedom
Lithuania has risen to 22nd place among the world's economies in the latest Index of Economic Freedom released by the US-based research institute Heritage Foundation jointly with The Wall Street Journal.
Lithuania is rated the third freest economy among the EU applicant countries after Estonia and Cyprus.
According to the latest survey, Lithuania was the only among the three Baltic countries to improve its economic freedom score last year -- it improved by 0.02 points to 2.19 (a lower score shows better performance).
Latvia's economic freedom score worsened by 0.06 points to 2.36 (29th position), while Estonia's score worsened by 0.08 points to 1.76.
The Heritage Foundation said Hong Kong has the freest economy in the world. Singapore is ranked second and New Zealand is placed third.
Estonia is ranked 6th, the highest standing among the EU candidate countries, while Cyprus is placed 15th.
(Respublika, Lietuvos Zinios)

Lithuania's VP Market pushes Rimi from Riga
Retail chain Rimi, owned by the Swedish group ICA, closed its supermarket in Riga's Agenskalne precinct. A T-Market store will be opened instead.Rimi claims it is looking for a larger building in the same subdistrict, although competitors say the company became the victim of overcrowded market and its price policy. Rimi closed its supermarket in another Riga's precinct in September.
ICA has recently merged with Kesko Food and announced plans to occupy 25 percent of the Baltic market. However, Lithuania's VP Market has no intentions to yield its positions and plans to expand further in Latvia and Estonia.
Rimi had 37 supermarkets in Latvia at the end of 2003.
(Verslo Zinios)

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