Observer "Lietuva"

WEEK 32nd

Saturday, 7th of August

Surplus – nearly LTL 135 million
The Lithuanian central government collected LTL 5.501 billion in budget revenues during the first seven months of this year, exceeding the target of LTL 5.366 billion.
According to preliminary estimations, in July budget revenues made up LTL 749.33 million, exceeding the projected amount of LTL 725.16 million.
Compared with the first seven months of 2003, budget revenues rose by LTL 308 million or 6 percent in the January-to-July period of this year.
EU assistance funds, which are included in Lithuania's budget this year, amounted to LTL 609.6 million during the January-to-July period.
Respublika, Lietuvos Zinios

Alytaus Tekstile will dismiss 220 employees
The Lithuania’s biggest producer of cotton fabrics Alytaus Tekstile (Alytus Textile) will dismiss 220 employees in August-November due to lack of orders and reduced output volume. On the whole, the company employs nearly 2,312 people. Alytaus Tekstile has already informed the Lithuanian Labour Exchange about the planned dismissals.
The milk processing companies that are undergoing the liquidation process will also dismiss employees. Varena dairy will fire 105 employees, Ignalina dairy – 91 employees, Raguva branch of Panevezio Pienas milk company – 51 employees.
Lietuvos Zinios

Gold and currency reserves are growing
Lithuania's official international reserves rose by LTL 315 million, or 3.4 percent, during July, and totalled LTL 9.657 billion at the end of the month, the Bank of Lithuania has announced.
Central bank's operations with central authorities institutions boosted the official forex reserves by LTL 329.5 million. Moreover, net receipts on foreign currency denominated investments made a significant contribution to the general increase as well.
However, central bank's operations with commercial banks reduced the official forex reserves by LTL 35.9 million last month.
The country's gold reserves stood at LTL 207.5 million in late July, a 0.2 percent decline from June.
In late 2003, Lithuania's official forex reserves totalled LTL 9.5 billion.
Lietuvos Zinios

Friday, 6th of August

Clients cost more and more
Bite GSM reported on Thursday that its earnings before interest, tax, depreciation and amortization (EBITDA) declined by 6.8 percent, to LTL 42.3 million in the six-month period because of increased advertising expenses.
The director general of Bite GSM Jesper Theill Eriksen said huge competition in the mobile communications market induced advertising growth and Bite‘s expenses on advertising increased by 1/5 in the first half year.
The company’s investments were efficient, as the number of Bite’s clients increased 54 percent over the first half of this year since the relevant period last year and amounted to 740 thousand.
The head of Bite GSM reported that according to their calculations, Bite had 25 percent share of the subscriber market as of July 1, while Omnitel and Tele2 controlled 45 percent and 29 percent of the market respectively.
Eriksen said that in spite of huge competition Bite perceives possibilities to expand not only in the mobile communications market but also in the fixed-line market, where the company has already offered an alternative to the monopoly – a new fixed-line service Bite Namams (Bite for Home).
Lietuvos Zinios, Respublika, Lietuvos Rytas

Summer is not very successful for brewers
Even though July was much warmer than June, turnover of Lithuanian brewers declined. Last month, nine companies that belong to the Lithuanian Brewers’ Association sold 28 million litres of beer, 3 percent decline month-on-month.
The president of the Brewers’ Association Audrius Vidzys says this happened because of the artificial rise recorded in June. “When Svyturys-Utenos Alus reconciled with VP Market, too much beer were supplied to warehouses and trade depots. That was only supply of production to traders, not the real sale,” he says.
Rinkuskiai brewery is a single company that managed to increase its turnover in July: the company sold 0.91 million litres of beer, up from 0.73 million litres of beer sold in June.
Vidzys says that the prognoses that the beer market will grow only 2-3 percent this year are turning into reality.
147.5 million litres of beer were sold in Lithuania over 7 months of this year, or 3.3 percent more than over the same period last year.
Svyturys-Utenos Alus sold the biggest amount of beer in January-July – 68.95 million litres; the sales of Kalnapilis-Tauro Grupe amounted to 35.91 million litres of beer, Gubernija brewery sold 14.54 million litres of beer over the given period.
Lietuvos Rytas, Lietuvos Zinios, Respublika, Verslo Zinios

Lituanica will move to new factory in October
A Kaunas-based footwear company Lituanica plans to move production to the new factory in October and will launch production in mid-November. The investments of the company in the new factory will amount to LTL 7 million.
The director general of Lituanica Kestutis Deltuva says the money will suffice for moving the factory from the old town of Kaunas and paying LTL 5 million state debt for the premises in Kaunas centre. He hopes that all the deals will be over in mid-November and then the production in the new factory will be started.
Verslo Zinios, Kauno Diena

Thursday, 5th of August

Alcohol is sold online
Lithuanian company Vinette dealing with alcohol trade on the internet offers a wide range of Lithuanian drinks to foreign customers on its website.
The company offers over 60 kinds of alcoholic drinks, including Lithuanian vodka Amziaus, Prezidento, Stumbro and Ultra, in English, Swedish and other languages on its website www.alcohola.com.
The company also offers three kinds of Lithuanian beer, Stumbro gin and other states' alcoholic drinks.The website of Vinette says that alcoholic drinks offered on the website are 50-70 percent cheaper as drinks are ordered from a Lithuanian shop.
The company prepares ordered alcoholic drinks for sending within 48 hours after a customer pays for it, and the purchase is delivered within 3-12 days, but the company does not transport it itself. The website says that transportation services may be provided by the Swedish cargo transportation company Locadi.
According to the website, the company's activity is one hundred percent legal and does not violate Swedish laws.
Lietuvos Rytas, Verslo Zinios, Kauno Diena, Respublika

Power breakdown stopped Achema
Achema, the largest Baltic fertilizer producer, halted the manufacturing amid power outage on Wednesday morning.
Having suffered LTL 2 million loss, the factory will start operating at a normal regime on Friday afternoon.
The director general of AB Achema Jonas Sirvydis assured that the automatic device system made it possible to shut down the plant safely and smoothly.
According to Virginija Dunauskiene, Achema Group’s spokeswoman, the factory stopped operating because it did not get any power from external power grids.
The residents of Jonava recalled the heavy smell of ammonia about a half an hour after the incident. Dunauskiene assured that the amount of ammonia in the air did not exceed the allowed norms.
Verslo Zinios, Kauno Diena, Lietuvos Rytas

Delicatessen of LAL
The national air company of Lithuania AB Lietuvos Avialinijos (Lithuanian Airlines) renewed its menu and changed the customer care concept during the short flights as of August 1, 2004.
Now LAL offers passengers a bigger choice of food that is served free of charge during the flight.
The choice of beverages available during the short flight free of charge will not change.
LAL also offers special food to its passengers, e.g. vegetarian, kosher, seafood or other dishes, but the special food must be offered 24 hours before the flight.
LAL is the leader of the Lithuania air market. The company offers more than 50 percent of the regular flights in Vilnius international airport. As of August, LAL will launch regular flights to Dublin.
Lietuvos Zinios

Wednesday, 4th of August

More holiday makers in rural farmsteads
Rural tourism farmsteads in Lithuanian receive more vacationers as weather in the country warms up.
The number of vacationers increased 22.8 percent during the first seven months of this year compared to the previous year and amounted to 98,100 visitors.
In July, the number of holiday makers increased 21.4 percent from 29,500 vacationers to 35,800 vacationers compared to July 2003, the Rural Tourism Association of Lithuania reports.
It is forecasted that rural farmsteads will receive over 200,000 vacationers this year, about one-fifth more than last year. In 2003 the nation's rural farmsteads were visited by 164,100 vacationers.
At present, about 1,000 farmsteads belong to the Rural Tourism Association of Lithuania.
Lietuvos Rytas, Lietuvos Zinios, Kauno Diena, Verslo Zinios

Sonex will supply computers to schools
One of the largest IT companies in the Baltic countries, Sonex Grupe (Sonex Group or SG) has won a tender organised by Lithuania’s Ministry of Education and Science and will supply 4300 computers and other computer equipment to schools of the country. The company will supply computers and equipment worth LTL 8.4 million.
A representative of SG claims that this order is a record one in the history of the company as well as the Baltic countries in terms of the number of the computers sold.
Sonex Grupe will equip 180 computer classes by September 10. The rest of the computers will be supplied to the Ministry of Education and Science.
Lietuvos Zinios, Verslo Zinios

Microlink earns the most in Lithuania
The Baltic IT companies’ group Microlink posted LTL 77.3 million non-audited profit for the financial year 2003-2004. The company’s annual turnover increased the most in Lithuania – 54 percent.
Alvydas Vitkauskas, head of Microlink group in Lithuania, claims that the application sector of the group increased at the most rapid pace in Lithuania thanks to the big projects implemented in the Lithuanian railway company Lietuvos Gelezinkeliai and SBA concern.
In Latvia, the company’s annual revenues increased by 31 percent, while in Estonia the trade volume of the company shrank by 23 percent.
Janis Bergas, head of Microlink, claims that having renounced two subsidiary activities, i.e. having sold SAF Tehnika and Delfi, the company received big profit. Besides, the business IT sectors of the group brought LTL 2.8 million profit.
Verslo Zinios, Lietuvos Rytas

Tuesday, 3rd of August

Merged telephone repair business
Mikrovisata and Spaineta have handed over their mobile telephone repair business to the recently established joint company UAB Mobiliuju Telefonu Techninis Centras (Technical Centre of Mobile Telephones or MTTC). The merger has caused some problems because due to the reduced number of offices not all clients could be served in Vilnius. By now these problems have been solved.
So far Mikrovisata has been repairing mobile phones of UAB Omnitel’s clients, while Spaineta has been providing mobile phone repair services to the clients of UAB Bite GSM and UAB Tele2.
Aivaras Kavaliauskas, board chairman of UAB Mikrovisatos Valda, claims that as telephone technologies grow more complicated, bigger investments in repair equipment are necessary. The market is not big and separate investments would hardly bring dividends therefore it was decided to establish a joint company that would repair mobile telephones of the clients of all three mobile communications operators.
MTTC controls some 70 percent of the telephone guarantee repair market at the moment. Andrius Grigas, director of MTTC, says another reason of the merger was reducing telephone repair tariffs.
Verslo Zinios

Klaipedos Nafta demonstrates stability
Klaipedos Nafta (Klaipeda Oil), the state-run oil products terminal, handled 4.183 million tons of oil products in the January-to-July period, a rise of 4.2 percent from the year-earlier figure.
In July alone, the oil products handling came in at 540,000 tons, a decline of 13.6 percent versus July 2003. Ricardas Milvydas, company's director of commerce, said the handling of oil cargo has stabilized this year therefore monthly handling figures are more or less similar. The flow of oil products is rather smooth, which is predetermined by stable supply from two key sources, Mazeikiu Nafta and Belarus.
In August, the handling result would be similar to that of July, he added.
The company pursues further negotiations over the handling of crude.
Verslo Zinios, Lietuvos Zinios

Lithuania renewed electricity export
The second turbo-generator of the first reactor of Ignalina Nuclear Power Plant (INPP) resumed operations after a week's maintenance on Saturday, enabling Lithuania to reopen the exports of electricity.
"The first unit of INPP has reached its full capacity, and we have renewed scheduled exports of electricity to Russia, Latvia and Estonia," said Rymantas Juozaitis, head of Lietuvos Energija (Lithuanian Energy) power utility.
In July the company failed to supply its customers about 150 million kilowatthours (kWh) of electricity owing to turbo-generator repairs.
Lietuvos Energija forecast that in 2004 the country's electricity exports would exceed the target, i.e., 6.84 billion kWh, by at least 15 percent.
Belarus is the only export market of Lietuvos Energija, which the company has not reopened exports to. Lithuania's electricity was only supplied to Belarus in January and February, as the export mediator Inter RAO UES failed to agree with Belarus authorities on the terms of electricity sales.
Verslo Zinios, Lietuvos Rytas, Lietuvos Zinios

Monday, 2nd of August

Tourists’ abundance surpassed prognoses
Even though it was forecasted that the incoming tourism would revive after Lithuania joins the European Union, the reality has surpassed prognoses. At present, occupation of the hotels in the biggest cities of Lithuania amounts to 80 percent and all the hotels on the seaside have been booked until the end of summer.
In the second quarter of this year, the contribution of restaurants and hotels operating in Lithuania to the country’s GDP was 9 percent bigger than during the same period last year.
Relying on the data of the Bank of Lithuania, foreigners spent some LTL 413 million in Lithuania in the first quarter of this year, nearly 30 percent rise year-on-year.
Gintautas Indriunas, head of the Tourism Service Development Section under the State Tourism Department, claims that the revenues from incoming tourism constitute 10 percent of general Lithuania’s export revenues and this is one of the most stably growing export branches.
Lietuvos Rytas

Tendencies gladden leasing companies
The Lithuanian Leasing Association reports that the volume of leasing services increased at a rapid pace in the first half of this year: the total sum of the newly signed leasing agreements was LTL 1.52 billion, a 52.5 percent rise year-on-year. It is forecasted that rapidly developing economy and growing consumption will contribute to the further growth of the leasing market.
The leasing portfolio has increased 18.9 percent or LTL 509 million since the beginning of the year. The general leasing portfolio of the association’s members has increased from LTL 2.13 billion to LTL 3.2 billion, or 50.7 percent, if compared to the first half-year of 2003.
Development of the leasing market has been preconditioned by increased investments in equipment, a 45 percent rise in demand for leasing of cargo motor vehicles, a 62.2 percent rise in demand of car leasing and a 60.4 percent rise in demand for real estate leasing services.
Verslo Zinios, Lietuvos Zinios

Bonum Publicum expands its chain
A life insurance company Bonum Publicum, which had agencies only in the biggest cities of the country so far, will open branches in Siauliai and Marijampole as well.
The sum of insurance premiums written by Bonum Publicum in six months of this year increased 60.8 percent, to LTL 1.56 million, year-on-year.
Growth of the life insurance market amounted to 5.6 percent in the first half of 2004.
Gintautas Mazeika, director of Bonum Publicum, claims that successfully chosen sales channels have positively affected company’s growth. Bonum Publicum actively expands its activity geography not only by establishing new departments but also by cooperating with the brokerage companies operating in other Lithuanian towns.
Verslo Zinios

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