Observer "Lietuva"

WEEK 40th 2004

Saturday, 2nd of September

Ryanair wishes to start flights from Kaunas
Ryanair, the Irish low fare airline, wants to start flights from Lithuania's second-biggest city of Kaunas to 7 European destinations within a year.
Berner Berger, a senior executive at Ryanair, discussed the possibility of launching services from Kaunas' Karmelava International Airport with Mayor Arturas Zuokas of Vilnius and Deputy Mayor Erikas Tamasauskas of Kaunas during their meeting in Lithuania's capital on Friday. Berger said that Ryanair could offer flights to London, Rome, Stockholm, Tampere, Milan, Frankfurt and Hamburg.
"We are only discussing it at the moment, but we would really start flights if the airports lowered their charges," Berger said after the meeting.
Now less than a million people travel to Lithuania by air annually, but Berger said the arrival of low fare airlines in the market could help boost the traffic up to 5 million people.
It has been reported earlier that the Irish air carrier would pay around LTL 1,700 to the Kaunas airport per flight, which is at least 5 times less than the airport charges for its services now.
Lietuvos Rytas, Kauno Diena, Lietuvos Zinios, Respublika

Vilniaus Vingis turnover grew
Lithuania's electronics company Vilniaus Vingis recorded a 6.4 percent growth in sales revenues for the first nine months of this year thanks to successful sales of deflection yokes for large TV tubes. Vilniaus Vingis posted sales of LTL 98 million for the nine months ended September 30, up from sales of LTL 92.1 million in the same period a year ago. Its sales for September reached LTL 10.4 million.
Vladas Cybas, Vilniaus Vingis marketing director, attributed the growth to successful sales of new products, deflection yokes, for 29 and 32-inch TV tubes. The most of these deflection yokes were sold to Samsung.
Vilniaus Vingis is targeting net earnings of LTL 8 million on sales of LTL 136 million for the full year 2004.
Lietuvos Zinios

Record September of Apranga
Apranga, Lithuania's biggest retail clothing chain, has reported sales of LTL 88.849 million in Lithuania and Latvia for nine months of 2004, a rise of 38.3 percent from the year earlier figure. In September alone, the company's sales rocketed up by 88.9 percent, to LTL 16.987 million, prompting the retailer to forecast that the full-year sales result would beat the expected LTL 138 million turnover.
Lietuvos Zinios, Lietuvos Rytas

Friday, 1st of October

Lietuvos Avialinijos posted LTL 3.5 million loss in the first half of the year
Lithuania's flagship air carrier Lietuvos Avialinijos (Lithuanian Airlines, or LAL) posted losses of LTL 3.5 million for the first half of 2004, down from losses of LTL 3.7 million in the same period a year ago. LAL's first-half operating revenues increased by 2.7 percent from operating revenues of LTL 92.9 million in the first half of 2003. The company has revised its 2003 first-half operating revenue figure upwards, from LTL 89.2 million it reported last year, due to changes in accounting methods. LAL is targeting year-end net earnings of LTL 4.8 million before revaluation of long-term tangible assets.
Vidas Zvinys, CEO of LAL, said that the main factors that influenced the first-half performance results were the company's intensive business expansion, surging oil prices in the world markets and low passenger numbers in the first quarter.
LAL carried a total of 163,200 passengers on regular flights during the first half of the year, a 23.9 percent increase on the same time last year.
Respublika, Lietuvos Rytas, Verslo Zinios, Lietuvos Zinios

Insurance market to increase by one-fifth
The aggregate amount of insurance and reinsurance premiums to be signed in 2004 should exceed LTL 1 billion mark for the first time in Lithuania's insurance market history, the Insurance Supervisory Commission has forecast. In 2003, domestic insurers collected LTL 833.2 million in insurance and reinsurance premiums. This year, the market should grow by at least 20 percent.
Insurance regulators predicted in an interim report to government that insurance premiums per capita would reach LTL 274 in 2004, a rise of 13.7 percent from LTL 241 a year ago. Life insurance premiums per capita should increase by 6.5 percent, to LTL 66, from LTL 62, whereas in the non-life insurance market, the index should soar by 16.2 percent, to LTL 208, from LTL 179 last year.
In the first half of 2004, the GDP and insurance and reinsurance premium rate made up 1.82 percent, up from 1.73 percent in the January-to-June period of 2003.
Lietuvos Zinios, Respublika, Verslo Zinios

Growth of GDP
Lithuania's gross domestic product (GDP) grew by 7.3 percent in the second quarter of 2004, in year-on-year terms, according to revised estimates released by the country's Statistics Department on Thursday. The GDP totalled LTL 15.433 billion at current prices in the April-through-June period. All key sectors of the economy, with the exception of the mining and quarrying industry and agriculture, contributed to the GDP growth in the second quarter.
The strongest growth in value-added was recorded in the following sectors: manufacturing (17 percent), retail and wholesale trade (11.8 percent), fisheries (11 percent), hotels and restaurants (6.9 percent), and transport and communications (6.8 percent).
Verslo Zinios, Respublika, Lietuvos Rytas

Thursday, 30th of September

Alliance to strengthen Alna positions
Lithuanian IT company Alna has entered the alliance of the global business system providers’ association Watermark Global Alliance, a company based in the Netherlands.
"We believe this step will help us offer our customers new high-quality products and entire new solutions to specific branches of industry, as well as attract more clients in all three Baltic States," Tomas Milaknis, CEO of Alna, said.
Upon joining the ranks of the global alliance, Alna is strengthening its positions in the business system installation and consulting business. Arijus Ketlerius, director of Alna Business Solutions’ Centre, says that the Lithuanian company is to offer its clients unique products in the industries of electronic, machinery, timber, textile, wholesale, financial services, etc. He projects the popularity of time registration and work management solutions as well as the solutions for projecting organisations.
Verslo Zinios, Respublika, Lietuvos Rytas

EU allots millions to the shutdown of plant
European Commission (EC) proposed at Wednesday meeting to earmark EUR 815 million for the financing of shutdown projects at Ignalina nuclear power plant (INPP) in 2007-2013, with Lithuanian officials noting that the proposal was of interim nature.
"I believe that this is a proposal that might change in the course of negotiations, it is not a final decision," said Arturas Dainius, INPP chairman and economy ministry secretary.
Discussions over the outlook for EU funds in 2007-2013 had been launched only recently, he told BNS, adding that the final decisions concerning the funding of INPP shutdown projects would not be adopted soon.
Lithuanian State Radio reported on Wednesday that the EC meeting, which tackled the EU finance outlook for 2007-2013 and the projects eligible for funding in the energy and transport sectors, proposed to rise the funding to EUR 815 million, from EUR 788 million.
While in pre-accession talks, Lithuania pledged to shut the first reactor of INPP down by the end of 2004 and close the plant overall in 2009.
Lietuvos Zinios, Respublika, Verslo Zinios

Record budget was approved
The Cabinet of Ministers on Wednesday endorsed the draft national and local budgets for next year. The revenues of the national budget should amount to LTL 15.65 billion in 2005, or nearly 24 percent of the estimated gross domestic product (GDP). The expenditures of the national budget, including allocations and compensation for municipalities, will equal LTL 17.46 billion. Spending will increase almost LTL 2.06 billion from this year, the government press service announced.
"This is a record large budget, and we definitely have more potential to finance more individual sectors," Prime Minister Algirdas Brazauskas said.
Government revenues, including EU funds, should amount to LTL 13.85 billion, a rise of LTL 1.92 billion than in 2004.
The major changes in the budget are related to the membership of Lithuania in the EU, which brings a more intensive flow of money.
Kauno Diena, Respublika, Lietuvos Rytas

Wednesday, 29th of September

Svyturys beer in Siemens Arena
On Tuesday, Svyturio-Utenos Alus, the largest brewery in Lithuania, has become a partner of Siemens Arena, a universal sports arena in Lithuania, which is being built by Rubicon Group. "In the past seven years, our financial support for sports and culture has surpassed LTL 9 million," Rolandas Virsilas, CEO of the brewery, said.
The brewery plans to install the first centralised system for selling beer on tap in Lithuania. The sum to be invested into this system by both partners will reach LTL 300,000. The beer will flow along 500-metre-long pipes to 12 bars with 117 beer taps. The system will make it possible to fill in 10,500 beer glasses in 30 minutes or over five tons of beer during one event.
The brewery is to establish a restaurant under the name of Svyturys in the arena that could receive 250 people at the same time.
Respublika, Lietuvos Rytas

Lithuanians do not stay in hotels in Lithuania
According to the data of Statistics Department, 376,300 Lithuanian tourists and 202,220 one-day travellers travelled in Lithuania in the second quarter of this year. The number of one-day visitors increased by 6.1 percent compared to the same period last year, while the number of local tourists declined by 1.7 percent year-on-year.
Local tourists usually spent LTL 65 during a trip with one-night stay. Tourists going shopping sent most of all – LTL 552; those who travelled with the purpose to improve their health spent LTL 202 in the second quarter of 2004. Tourists aiming to have a rest sent LTL 100, on business and profession trips – LTL 155, visiting of friends and relatives – LTL 61, to countryside farmsteads – LTL 31, and on other purposes – LTL 82 in the abovementioned period.
Local tourists usually stayed at relatives and friends (83 percent), at hotels or guesthouses (1 percent), at farmsteads (11 percent), and at other places (5 percent).
Verslo Zinios, Lietuvos Zinios

Achema terminal in Belgium
Achema, the largest nitrogen fertilizer producer in the Baltics controlled by Achema Group, will build a liquid fertilizer terminal in Gent, Belgium, backed by foreign partners.
Last week, Achema and Molens-Sint Martinas, a holding of Belgian port businesses, signed an agreement establishing a joint venture, the majority holding in which would be controlled by Achema.
Jonava-based Achema, which acquired 50 percent in Agro Baltic, Germany's fertilizer trader, in summer, has already entered the European fertilizer distribution business and is approaching the completion of construction of liquid fertilizer terminal in Luebeck, which will see the investments up to LTL 10 million.
The capacities of the terminal in Belgium, which should be put on line in fall 2005, will reach some 160,000 tons per year. Terminal installations will offer possibilities to load fertilizers on tank trucks and tank wagons, service river barges.
Convenient geographic position of Gent will allow the products of Achema to reach northwestern part of France, Belgium and western part of Germany.
Lietuvos Rytas, Verslo Zinios, Lietuvos Zinios

Tuesday, 28th of September

Klaipedos Baldai in the lead
Furniture maker Klaipedos Baldai has been the leading player in the market this year by sales of furniture. The other leading Lithuanian furniture companies also include Vilniaus Baldai and Venta. The sales of Klaipedos Baldai and Vilniaus Baldai in the first eight months of this year advanced 10.1 percent year-on-year to LTL 73.3 and LTL 63.24 million respectively. The sales of Venta grew almost 33 percent year-on-year to LTL 49 million in January-August.
Silutes Baldai, the largest producer of tables in the Baltic States, suffered a decline in sales of 7.5 percent to LTL 44.9 million during the period. The sales of Freda, a company belonging to Baltic Furniture Group, advanced 27.4 percent to LTL 44.2 million.
The leading furniture supplier to the domestic market was Narbutas ir Ko, which said it generated domestic sales of LTL 17 million in January-August 2004, a rise of 1.8 times during the same time period last year.
Lietuvos Rytas, Respublika

Red beer for beer lovers
Brewery Kalnapilis-Tauras Grupe has introduced a new category beer in Lithuania - red beer Kalnapilis Red. According to Valdas Tekorius, CEO of the brewery, the company expects that the beer is to hit the top five best selling beer sorts of the company. Kalnapilis Red has already been introduced to the retail trade chains. Visitors of some bars and cafes will soon be able to purchase the new product, too. The sales of Kalnapilis-Tauras Grupe grew by 9.4 percent in the first eight months of this year to 4.249 million decilitres. The brewery controlled 25.34 percent of the Lithuanian beer market.
Verslo Zinios, Lietuvos Rytas, Respublika

Flow of direct foreign investments grows
Direct foreign investments (DFI) amounted to LTL 1.320 billion in the first half of this year in Lithuania, a rise of 40 percent since the same period a year ago when it stood at LTL 374.7 million. Revenues from the privatized objects came in at LTL 114.5 million and constituted only 8.6 percent of total DFI flow in the country, the Bank of Lithuania announced. The accumulated DFI stood at LTL 14.7 billion by June 30. The processing industry of the country received the biggest DFI flow this year (LTL 700.9 million), supply of electricity, gas, and water (LTL 165.7 million), wholesale and retail trade (LTL 142 million), monetary mediation (LTL 141.1 million).
Respublika, Verslo Zinios, Lietuvos Rytas, Lietuvos Zinios

Monday, 27th of September

Orakulas aims at LTL 12 million turnover
Orakulas, Lithuania's second-biggest betting agency, is planning to expand its chain of betting shops to 50 this year and is targeting full-year revenues of around LTL 12 million. Orakulas, which started operating in June 2003, posted revenues of LTL 1.8 million for the year. Its 2004 first-half revenues reached LTL 6 million.
Orakulas currently runs 37 betting shops in 14 cities and towns across Lithuania. The agency is planning to open five new shops in the coming two weeks and to expand its chain to 50 by the end of the year.
Top Sport is Lithuania's largest betting agency with 60 betting shops in 18 cities and towns.
Verslo Zinios

Internet is a necessary service for guests of hotels
Lithuanian hotels attempt to lure guests by wider possibilities of internet. Hotel Centrum in Vilnius, which joined international hotel chain Centrum Uniquestay, offers free internet access for its guests. The chain strives to become attractive to traveling businesspeople in the Baltic States. Each room of the hotel is equipped with stationary computers. Residents of business-class rooms can use internet free of charge.
Telecommunication company Omnitel proposes to extend internet possibilities in hotels, too. The mobile operator plans to propose a new offer to the Lithuanian Hotel and Restaurants Association related to the extension of wireless internet access zones based on Wireless LAN (WLAN) technologies.
Wireless internet access zones are operating presently in international airport of Vilnius, Vokieciu Street in Vilnius, shopping mall Europa as well as in some hotels and entertainment centres.
Lietuvos Rytas

Increase of Air Lithuania income
Air Lithuania, a privately owned air carrier, posted revenues of LTL 25.7 million for the first eight months of 2004, a rise of 21 percent year-on-year. Air Lithuania, which is based in Lithuania's second-biggest city of Kaunas, said its passenger numbers grew by 14 percent, year-on-year, to 33,600 in the reporting period. The introduction of a more flexible pricing system and the reduction of fares has led to an increase in passenger traffic.
Verslo Zinios

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