||WEEK 5th 2004
Saturday, 31st of January
Anyksciu Vynas climbs out of the losses
Anyksciu Vynas, Lithuania's largest wine producer that is currently in the process of privatization, reported a preliminary loss of LTL 6,600 for the full year 2003, versus a loss of LTL 4.55 million for 2002.
The company turned a profit for the last two quarters of 2003, at LTL 267,000 for the third quarter and around a million litas for the fourth quarter.
The improved performance in the second half was a result of the restructuring that has been underway for several years. This has helped the company to meet its long-term financial obligations, as well as to dispose of non-core operations and cut production costs.
The company, which is based in Anyksciai, in eastern Lithuania, reported preliminary sales of LTL 44.01 million for 2003, a 4.7 percent rise from the previous year.
(Lietuvos Zinios, Respublika)
Snoras earned more than initially planned
The fourth largest Lithuanian commercial bank Snoras earned LTL 8.3 million preaudited net profit last year. It is LTL 0.3 million above the initial target but 21.2 percent less than in 2002, when the bank posted a profit of LTL 10.545 million.
The assets of the bank totalled in LTL 1.33 billion by the end of the year up by 21.6 percent or LTL 238.1 million during the past year.
The amount of deposits and credit in the bank grew by LTL 268 million (32.9 percent) and totalled in LTL 1.082 billion in the beginning of this year. The sum of loans issued by the bank shrank by 21.1 percent down to LTL 460.5 million.
The bank had 503,300 clients in the beginning of this year (up by 49 percent during the past twelve months).
The capital of the bank reached LTL 180.9 million last year. Representatives of Snoras say it is the third largest capital among the Lithuanian banks.
Russian interested in the Lithuanian power distribution network
Russia's energy monopoly United Energy Systems (UES) will take part in a new tender on privatization of Rytu Skirstomieji Tinklai (RST), Eastern Lithuania's power grid operator, Yakov Urinson, UES deputy chairman has said in Moscow.
Urinson reminded that the monopoly had already tried to vie for one of two Lithuania's power grid operators, however, the company failed to meet the prequalification requirements as Lithuania's government laid provisions preventing Russia's companies from taking part in the tender.
The tender on privatization of RST has been suspended, with the authorities still pondering over the possible outcome. Eesti Energia, the Estonia's state-run power utility and the only bidder in the tender, has filed impeccable technical and financial offers, however, the government seems unwilling to hand the power grids over to the Estonians.
Urinson has also announced that UES and Lietuvos Energija (Lithuanian Energy), Lithuania's power utility, intend to conclude an agreement over the supply of energy to Lithuania, adding that the cooperation agreement will cover the period until 2009.
(Lietuvos Zinios, Lietuvos Rytas, Kauno Diena)
Friday, 30th of January
Production of strong alcohol dominated last year
Lithuanian companies produced more strong alcoholic beverages last year, while the production of sparkling wine decreased. Department of Statistics reports that production vodka and liquor reached 2.619 million dekalitres last year. It is an increase from 2.467 million dekalitres produced in the country last year.
The production of sparkling wide slumped by 15.2 percent last year to 221,100 dekalitres, while the production of natural and aerated water grew by 6.7 percent up to 3.919 million dekalitres. Lithuanian companies also produced 13.94 million dekalitres of non-alcoholic beverages and 24.47 million dekalitres of beer. The production of beer declined by 7.2 percent last year.
Lithuanian public debt declined in 2003
Lithuania's public debt reached LTL 13.137 billion in late December 2003, narrowing by 0.2 percent in year-on-year terms, the Finance Ministry has announced. The public debt accounted for 23.95 percent of the country's projected GDP for 2003.
The narrowing of the debt was due to the Finance Ministry's cautious borrowing policies and tight fiscal disciple, as well as better-than-expected collection of general government budget revenues. Lithuania's total foreign debt shrank by 3.4 percent, year-on-year, to reach LTL 8.87 billion at the end of December, which represented 67.5 percent of the overall public debt.
Lithuania's overall domestic debt came to LTL 4.267 billion at end-December, a 7.1 percent increase over the same period a year ago.
Kitron undertakes especially precise production
UAB Kitron has launched a new electronic equipment production line. The company will open the so-called clean room this week, where it will make equipment of extreme precision.
Almante Medziausiene, assistant manager of UAB Kitron, says the company invested LTL 1.5 million into the new production line. She could not say the amount invested into the clean room, although the speaker admits it is a very expensive room indeed. The company will produce equipment meant for the Swedish market in the new room.
UAB Kitron is owned by the Norwegian enterprise Kitron. Its last years profit stood at LTL 4.87 million. The company plans a turnover of LTL 71 million this year.
Thursday, 29th of January
Lithuanian economy demonstrates unseen growth
Lithuanian economy grew at unseen rate last year the GDP grew by 8.9 percent for the full year, while the GDP growth in December was an astounding 10.6 percent.
Algirdas Semeta, CEO of the Statistics Department, says Lithuanian should have felt the growth as well because the real wages increased by 7.8 percent last year.
The main movers of the GDP growth are changing in Lithuania as well. The industry exports were the guarantee of the GDP growth several years ago. The construction and trade sectors took over last year.
Vadimas Titarenka, presidents adviser at Nord/LB Lietuva, says the good results of the Lithuanian industry several years ago incited the construction boom and better consumption in the local market. Agne Budryte, senior expert at Vilniaus Bankas, admits the influence of furiously rising consumption for the soaring GDP rate. She adds that growing loan portfolios and rising real estate prices prove the improved financial situation of the Lithuanias residents.
Lithuania was the only European country to avoid inflation last year. The deflation of 1.3 percent was registered in the country instead.
Russian investors might invade Lithuania
Although Western investors are interested in investing into Lithuanian enterprises, it is quite possible that their Russian competitors will outrival them. The Russian companies might be interested in investing in Lithuania because it would allow them avoiding import taxes when exporting to the European Union countries.
Russians are especially interested in financial, production and wholesale companies. However, other fields might soon become the target for the Russian enterprises as well. They will use Lithuania as a springboard to Europe in the same way Lithuania uses Kaliningrad region to penetrate the Russian market.
Russia is the seventh largest investor in Lithuania. Its investments in Lithuania amount to LTL 667.3 million, which accounts for 5 percent of the total foreign investments.
(Lietuvos Zinios, Lietuvos Rytas, Respublika)
Rimi Lietuva has a new top executive
Inga Skisaker, former director of finances at Rimi Lietuva, will assume the position of CEO at the company starting from February. Former head of the company Antonio Soares, who headed both Rimi Lietuva and ICA Baltic, will work only as the head of ICA Baltic.
Ignas Staskevicius, CEO of VP Market, says the news might be an indication that the control of the chain in the Baltic States is being taken over by the Finnish Kesko Food. The Finnish company and ICA have recently announced about their plans to establish a joint company, which would operate the retail chain in the Baltic countries.
Aidas Mackevicius, director of finances at Iki, says the appointment shows that the Swedes trust local experts. He adds that Skisaker will find it easier to understand local competitive environment and consumers.
More changes are on the way at Rimi Lietuva. Arunas Vizickas, director for commerce, is expected to leave his position in the nearest future. Sources of Verslo Zinios say the leave might be linked to the change of the top executive at the company.
(Verslo Zinios, Lietuvos Zinios, Lietuvos Rytas)
Wednesday, 28th of January
More passengers at Vilnius airport
International Vilnius airport serviced 719,850 passengers last year, which is an increase of 13.4 percent compared to 2002. Better results were due to the countrys growing economy and higher number of charter flights.
Summer months of 2003 were especially successful for the airport. August was a record-breaking month, when 81,415 passengers were serviced. It is an increase of 20.4 percent compared to August of 2002.
According to the calculations of the airport, Lithuanian Airlines holds the majority of the market. It is followed by SAS, Czech Airlines and Lufthansa.
Lithuanian Airlines serviced 285,638 passengers on its regular flights last year, an increase of 10.84 percent in year on year terms. The growth was due to the declining ticket prices, increased number of flights to Amsterdam and London, as well as a new flight to Brussels.
Growing Aibe boosts turnover
The retail group CBA Aibe, which operates in Lithuania and Latvia, reported total sales of LTL 618 million for the full year 2003, a 37.6 percent rise in year on year terms. The chain opened 177 new stores and cafes last year.
The sales of the Lithuanian chain increased by 5 percent to LTL 441 million in 2003. Latvia's Aibe, which started operations in August 2002, posted sales of LVL 32.71 million for 2003, a six-fold increase from sales for the August-to-December period of 2002.
At present, Lithuania's CBA Aibe is comprised of 439 retail stores across the country (of which 392 are grocery stores), 22 stores more than a year ago. Latvia's Aibe comprises 300 stores and cafes, 155 more than a year ago.
(Verslo Zinios, Lietuvos Zinios)
Siberian larch facilitates growth of Nilma
Kaunas-based wood processing company Nilma increased its export volumes from LTL 0.3 million to LTL 2.2 million last year. The turnover of the company grew from LTL 7 million to LTL 10.16 million.
Nilma managed to find a reliable supplier of larch in the Russian region of Krasnojarsk. The larch logs are brought to the subsidiary of Nilma in Kaliningrad, where the company produces larch planks. The planks, as well as part of the logs, are exported to Italy and Austria. The remaining logs are processed in Kaunas, where the company makes window frames, balks, decoration planks and floor planks. The production is sold in Lithuania or is exported to Italy, Austria and Iceland. The company exported to Armenia last year as well.
Nilma plans to start the production of furniture parts from the birch wood this year. The parts will be supplied for the Lithuanian furniture making companies that sell their production to IKEA.
Tuesday, 27th of January
Construction Kaminta demonstrates growth in 2003
Construction company Kaminta increased the volume of completed construction work significantly last year. The companys turnover grew by 72 percent last year compared to 2002.
Stasys Kaminskas, owner of the company, hopes Kaminta has already established itself as one of the leading construction companies in Lithuania.
The main field of activities for Kaminta is the construction of commercial building and renovation. The latter two account for 96 percent of construction work done by the company.
Among the best-known objects erected by Kaminta are Ice Arena in Kaunas and Orange Tennis Centre. Kaminta participated in the renovation of Darius ir Girenas stadium as well.
The company plans to start erecting apartment buildings this year. Kaminta ponders entering Western European market as well.
Revenues of Lithuanias Privatization Fund almost reach the target mark
Revenues of Lithuania's Privatization Fund nearly reached the target set for the full year 2003, with the authorities divesting a stake in Vakaru Skirstomieji Tinklai, Western Lithuania's power grid operator, and two major distilleries at the end of the year.
According to the data of the Ministry of Finance, last year the revenues of the Privatization Fund reached LTL 840.7 million, some 6.4 percent below the target. However, the figure exceeded the result of 2002 by 2.65 times.
This year the revenues of the fund are seen reaching LTL 400 million.
In 2003 the State Property Fund (SPF) divested two of four state-run distilleries - Stumbras and Vilniaus Degtine, the state-owned stakes in which were sold off for LTL 153 million and LTL 20.7 million respectively. Vakaru Skirstomieji Tinklai changed the owners for LTL 540 million, and Klaipedos Transporto Laivynas, the shipping operator - at LTL 48.7 million.
Expenses of Privatization Fund exceeded the full year target by 4 percent, reaching LTL 726.2 million instead of LTL 697.7 million.
(Lietuvos Rytas, Verslo Zinios)
Healthy habits facilitate growth of Neptuno Vandenys
UAB Neptuno Vandenys, producer of natural drinking water, reported sales of LTL 2.7 million in 2003. The sales increased by 18.4 percent compared to 2002, when the sales stood at LTL 2.28 million. Representatives of the company say the sales are rising due to changing habits of the Lithuanian customers.
Gintas Petrus, head of UAB Neptuno Vandenys, says after the hot season of the year is over, the company continues to operate profitably due to the supply of drinking water to offices. Water coolers are gaining popularity in Lithuania as well. What was previously considered a luxury is now a must for those, who lead a healthy way of life.
Water supplied for water coolers accounts for the half of the companys sales now.
Monday, 26th of January
Lithuanian retail giants expand cooperation with producers
Retail chains do not want to remain just sellers any more. They are trying to improve their position in the market by introducing their own trademarks.
One of the first trademarks registered by the retailers was Taupa. It has been replaced by T Market Classic and Saulute now. Besides the latter two, VP Market owns a number of other trademarks and is the leader of this field. Ignas Staskevicius, CEO of VP Market, says the main advantage of the private trademarks is a lower price.
RIMI Lietuva owns 13 trademarks. The most popular of them are Anuga and Laumes Juosta. Among the trademarks registered by RIMI Lietuva is Seimo vodka.
Inga Skisaker, director of finances at RIMI Lietuva, says private trademarks are popular among customers. For instance, plant oil Anuga is the most popular product among all articles of the group.
Market research company ACNielsen predicts that 20 percent of all articles sold in Lithuania in five years will be marked with a private trademark of a retail chain.
Import volumes from China will decline
Lithuanian producers rejoice about the quotas that will be introduced for articles imported from China. The quotas will come into effect in May, when Lithuania becomes the official member of the European Union. The Ministry of Economy reports that the number of application for quotas exceeds the number of available import permits.
Lithuania shoemakers hope that the introduction of quotas will improve the situation in the market, where Lithuanian shoes struggle to withstand the competition of the Chinese production.
Meanwhile, retail companies are already preparing for the novelties. They admit that the Chinese-made articles will become more expensive. Some of them plan importing larger article quantities before quotas come into effect. VP Market, the largest Lithuanian retailer, is also looking to import more articles from Hong Kong and Taiwan.
Putoksnis expects to grow this year
Siauliai-based producer of plastic containers UAB Putoksnis predicts the rapid growth of the German market and plans to take advantage of the fact.
Putoksnis will invest LTL 20 million into the production line of PET containers. The executives of the company believe the investment will allow doubling the turnover to LTL 160 million and earn LTL 10 million this year. The profit of the company was LTL 3.03 million last year.
Germany is the main market of Putoksnis at the moment. The company sells 40 percent of its production there. Germany is considered to be one of the most promising markets for PET containers. Putoksnis is even considering opening a production line in Germany. The decision on the project is expected to be made during the first quarter of the year.
Baltic Weekly MonitorA