Observer "Lietuva"

WEEK 33rd

Saturday, 14th of August

Electricity
The state-run power transmission company Lietuvos Energija (Lithuanian Energy) exported a total of 4.388 billion kilowatt-hours (kWh) of electricity during the first seven months of 2004, a 8.9 percent decline from 4.819 billion kWh exported in the same period last year.
The exports declined on the back of maintenance at Ignalina nuclear power plant (INPP) last month.
Following one-week maintenance of second turbo-generator at the first INPP unit in July, the power exports ran behind the schedule by approximately 145 million kWh.
Lietuvos Rytas, Lietuvos Zinios

Power distributor will please investors
The power company Vakaru Skirstomieji Tinklai (Western Distribution Grid or VST) privatized by a company established by the heads of the retail trade operator VP Market last year plans to reduce its authorized capital and pay some LTL 400 million to its shareholders.
Darius Nedzinskas, director general of VST, said that during reduction of the authorized capital, the nominal value of one share – LTL 109 – will be reduced to LTL 1. The major part of LTL 400 million sum to be paid to shareholders will go to NDX Energija, which controls 96.51 percent of VST shares at present.
According to Nedzinskas, later on the authorized capital of the company might be increased by a billion litas. At present the authorized capital of VST amounts to LTL 405.3 million.
Respublika, Kauno Diena, Lietuvos Zinios

Number of households using computers and internet grows
Nearly one-fourth of Lithuania's households owned a PC, while 10.6 percent of households used the internet at home in the first quarter of 2004, the latest survey of the country's Statistics Department has revealed.
The number of households with a PC rose by 25 percent, while the number of households with access to the net increased by 38 percent in the six-month period.
Every seventh household in the city and two out of a hundred households in countryside used internet at home in late March.
The number of people browsing intent at home increased at a more rapid pace than the number of computer users. Feliksas Dobrovolskis, deputy director of the Telecommunications Department under the Communications Regulatory Authority (CRA), believes that these figures imply that computer users have decided to acquire internet access, which has become easier available due to services of cable TV operators and more flexible internet service providers.
The statistical research implies that usage of computers, mobile telephones and internet depends directly on residents’ revenues.
Lietuvos Zinios, Lietuvos Rytas

Friday, 13th of August

Doclogiksas wants to go West
MicroLink, Baltic IT solutions and service group, has sold 50 percent in document management software developer Doclogiksas to Alna, one of Lithuania's biggest information technologies groups, for LTL 700,000. Alna plans to acquire control of the 100 percent stake in Doclogiksas and to enter the Western market. Doclogiksas aims at the Western Europe’s market of document management systems in the segment of small and average-sized companies.
Doclogiksas, established in February 2003, has created one of the most popular information management systems in the Baltic countries, DocLogix.
At present, the company operates in the Lithuanian, Latvian and Estonian markets.
Last year, Doclogiksas posted LTL 0.456 million revenues and incurred LTL 0.842 million loss. The director of Doclogiksas Jonas Albrechtas says the company should start operating profitably in 2006.
Verslo Zinios

Turnover of Anyksciu Vynas shrinks
Anyksciu Vynas (Anyksciai Wine), the largest Lithuania's wine producer that recently moved into private ownership, reported a preliminary turnover of LTL 21.34 million for the seven months of 2004, a decline of 5.4 percent from the year earlier figure of LTL 22.56 million.
"Although sales of strong spirits, including whiskey and brandy, improved, the sales of fruit and berry wine were disappointing. The decline was brought about by a number of factors, including tax policy, strong competition with beer and grape wine," Rita Gaigaliene, head of Anyksciu Vynas economic service, said.
The company's interim losses came in at LTL 764,000; however, the winery expects to break even by year-end.
Verslo Zinios

Company pampered by the state is to be sold
The authorities of Lithuania decided to privatise the biggest greenhouse complex in the Baltic countries, Pagiriu Siltnamiai (Pagiriai Greenhouses or PS). The company will be privatized this autumn already.
The initial price of the PS shares will amount to LTL 200 thousand. The State Property Fund (SPF) will most likely speed up privatization of the company.
PS needs investments for heating up the greenhouses and other needs. So far, the state has generously supported the company.
SPF representatives claim that investors are interested in privatisation of Pagiriu Siltnamiai. However, members of the Privatisation Commission do not think that there will be many investors willing to acquire a detrimental complex of greenhouses.
Lietuvos Rytas, Lietuvos Zinios, Respublika, Verslo Zinios

Thursday, 12th of August

Omnitel offers services and entertainment to fans of Olympic Games
For the first time in the history of Olympic Games, Lithuania will receive news and visual information about the victories achieved by our sportsmen in Athens in less than 15 minutes thanks to the joint project of Omnitel, Samsung and the Lithuanian national television.
Omnitel has created special services and entertainments for the summer Olympic Games 2004. Under the unique project of Omnitel, Samsung and the national broadcaster, the journalists of the Lithuanian television in Athens will transmit all the information by Samsung telephones to Omnitel, while the latter will distribute the information from the Olympic Games via al the channels – SMS, MMS, internet and WAP – to its clients. Olympic news will be available in omni.lt/zaidynes and the corresponding wap website in the telephone.
The marketing heads of Omnitel hope that the Olympic news service will be very popular among the clients.
Omnitel also offers many games related to the Olympic Games, participants of which will compete for various prizes.
Veidas

Oil and metal prices boost export
Lithuania's exports grew by 15.5 percent in the first half of 2004 from the January-to-June period of 2003, while imports rose by 15.2 percent in the reporting period, the country's Statistics Department announced on Wednesday.
Market experts value export growth as a positive tendency. They claim that the growth has been preconditioned by higher oil prices and industry growth.
The country's exports totalled LTL 11.518 billion, whereas imports of goods and services reached LTL 15.722 billion in the six-month period.
Foreign trade rose by 14.6 percent, year-on-year, to LTL 4.204 billion in the first half of 2004.
Verslo Zinios, Kauno Diena, Lietuvos Zinios

Drogas grows by expanding its chain
A health and beauty chain Drogas achieved sales of LTL 12.6 million in Lithuania in the first half of 2004, a surge of 65.8 percent from the year-earlier figure of LTL 7.6 million.
The company attributed the rise in sales with significant investments into fast-track expansion of the chain.
The chain's investments into the expansion on Lithuania's market exceeded LTL 1.2 million in the January-to-June period. The number of retail outlets rose by 4, to 24 in the reporting period.
By year-end the chain will open seven new retail outlets, which will eat up the investments over LTL 2.19 million.
Last year the chain's sales on Lithuania's market surged 2.75 times, year-on-year, to LTL 22 million. For 2004 the chain is projecting the sales of LTL 40 million in Lithuania.
Verslo Zinios, Lietuvos Rytas

Wednesday, 11th of August

Sales of new cars gather speed
Relying on the preliminary data, 7,323 new cars for personal and commercial usage were sold in the first seven months of this year in Lithuania, a 25.4 percent rise year-on-year.
The company Autotyrimai reports that 860 new automobiles were sold in July 2004, a 17.2 percent decline since July 2003.
Verslo Zinios

Alna’s profit up by a third
Alna, one of Lithuania's biggest IT groups, reported sales of LTL 27.7 million for the first half of 2004, a rise of 7.4 percent from the year-earlier figure. The combined profits, meanwhile, surged by 31.5 percent, year-on-year, to LTL 11.7 million.
The results exclude the Office1 stationery chain.
"The services on management of IT infrastructure posted the steepest rise in the first half-year," Arnoldas Jankunas, Alna sales director, said.
The growth in sales was largely the result of hardware sales, he added.
Verslo Zinios

Development boosts turnover
6-month turnover of the trade chain of Topo Centras, the power domestic appliance company, amounted to LTL 76.948 million, a 62.6 percent rise year-on-year. This figure includes the company’s results in Latvia, too.
In Lithuania alone, income of Topo Centras over the given period increased 66 percent, from LTL 42.155 million to LTL 69.955 million, the company reported.
Aurelijus Rusteika, director general of Topo Centras, says rapid growth has been preconditioned by opening of new stores and development of the old ones. At present, Topo Centras controls 25 stores in Lithuania and Latvia, or by 10 stores more than the last year.
Verslo Zinios, Lietuvos Rytas

Tuesday, 10th of August

Meat prices might continue growing
Consumption prices reduced 0.1 percent in July, while service prices increased 0.5 percent over the given period in Lithuania. The price of meat and meat products increased the most, nearly by 10 percent, over the last month. The reason of the price growth is increased export of Lithuanian producers to the European Union, which reduced meat supply in the local market.
Statisticians do not renounce a possibility that product prices might grow even more due to rise in prices of oil products.
The fuel price declined by nearly 1 percent in July compared to June 2004. Transport services grew cheaper as well, even though their prices have increased 7 percent since the start of the year.
Experts of the Statistics Department forecast that by the end of 2004, consumer prices will have increased 2.5-3 percent year-on-year.
The Finance Ministry plans to correct the 1.4 percent inflation prognosis for this year in autumn.
Lietuvos Zinios, Kauno Diena, Respublika

Western insurers flood Lithuania
Berkshire Hathaway insurance company, which belongs to the conglomerate of the legendary investor, the billionaire Warren Buffet, might launch insurance services in Lithuania.
The company licensed in Great Britain, Berkshire Hathaway International Insurance, has announced about its plans in Lithuania.
An insurance company, which obtains a licence in any country of the European Union, has a right to provide insurance services in all the territory of the European Union, including Lithuania.
In its website, the Insurance Supervisory Authority names more than 60 insurance companies of EU countries that provide insurance services in Lithuania. Presumably, these companies will offer re-insurance services or will participate in the big projects and will stay away from the local market.
Lithuanian insurance companies signed LTL 506.5 million worth insurance payments over six months of this year, a 15.3 percent rise year-on-year and paid LTL 148.9 million in damages, a 19 percent decline year-on-year.
Lietuvos Rytas

SAPARD support – hundreds of millions litas
This week the National Payment Agency (NMA) will end the three-year-long implementation of the European Union Special Accession Programme for Agriculture and Rural Development (SAPARD) by signing the last contracts with applicants to receive SAPARD financial aid.
Since the start of the implementation of SAPARD in December 2001, seven stages of filing have elapsed. During that time 1,202 applications were submitted by farmers, agricultural companies, and rural communities. Applications were submitted for investments in agricultural production, improvements into the processing and marketing of agricultural and fish products, the expansion of economic operations, the encouragement of alternative sources of income, the improvement of the rural infrastructure, and teaching.
According to the contracts signed, aid beneficiaries have already implemented LTL 580 million worth of investments and received LTL 283 million worth of aid. 298 projects supported by SAPARD have already been implemented and LTL 177 million in aid have been paid out.
Lietuvos Rytas, Kauno Diena

Monday, 9th of August

Sugar beet growers threaten to block roads again
Sugar beet growers are concerned that the reform of the sugar sector planned by the European Commission (EC) will aggravate their situation and reduce income.
Previously sugar beet growers were told that the current sugar regime will not change until the year 2006. Now it is said that the reform will be started next year already. During the reform, an interventional sugar price would be liquidated and a referential price would be introduced. The sugar price would reduce by a third: EUR 421 per 1 ton of sugar would be paid in 2007-2008. Specialists of the Lithuanian Agrarian Economy Institute have calculated that such a price might ruin Lithuanian sugar factories, in order to avoid ruination it should be not smaller than EUR 600 per 1 ton of sugar.
The reform also includes reduction of the minimal sugar beet price by 37 percent, to EUR 27.4 per 1 ton of sugar beets. It is also planned to reduce sugar quotas by 16 percent for all the countries.
Sugar beet growers believe that they will be harmed by the drastic reform. Farmers have already calculated that the compensations will not cover the losses suffered.
They threaten to block roads in Lithuania, Poland and Latvia.
Lietuvos Rytas

Membership in bank will bring investments
On Wednesday, Lithuania’s government is to discuss the country’s plans to participate in the activity of the Northern Investment Bank (NIB) and to become its shareholder. This membership should bring more investments to Lithuania.
Lithuania signed an agreement on activities in NIB in mid-February 2004. If the Lithuanian parliament ratifies the agreement, Lithuania will become a full-fledged NIB member at the start of the year 2005.
Lina Adakauskiene, secretary of Lithuania’s Finance Ministry, says NIB membership implies successful integration of Baltic countries into the well-developed financial structures of Northern countries.
Being a member of NIB, Lithuania will be able to loan funds from the bank at favourable terms for various investment projects of the state and private sectors.
At present, the shareholders of NIB are Sweden, Denmark, Finland, Norway and Iceland. The authorized capital of the bank – EUR 4 billion – is formed from the deposits of the member countries, proportional to their GDP. Lithuania’s contribution will amount to EUR 27.26 million that will have to be paid in 2005-2010.
Verslo Zinios

Alytaus Tekstile is looking for investors
The biggest cotton producer in the Baltic countries, Alytaus Tekstile (Alytus Textile), is negotiating with three companies from Great Britain, Italy and Germany, over work in the unused premises of the company.
The possibilities to establish joint ventures and hand over the surplus workforce to foreign investors are discussed.
Egidijus Pazarauskas, production director of Alytaus Tekstile, says the company has some 20,000 square metre area where companies of the same or similar profile could launch production. He says at present they are looking for the mutually attractive forms of cooperation with foreign investors.
Verslo Zinios, Respublika, Lietuvos Zinios

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