||WEEK 9th 2004
Saturday, 28th of February
Svyturys-Utenos Alus starts export to the United States
Lithuanian brewery Svyturys-Utenos Alus starts exporting its production to the United States on March 1 and says customers in seven US states will be able to taste original Lithuanian beer. The beer will be sold in New York, California, Illinois, New Jersey, Colorado, Georgia and Nevada.
Lithuanias largest brewery says it received plenty of proposals to sell its beer in the United States but was looking for a partner, which could start retail sales on a larger scale. That is why B&I Overseas Trading has been chosen.
Dainius Smailys, spokesperson for Svyturys-Utenos Alus, says that the brewery plans to export an average of 150,000 litres of Svyturio Ekstra beer per year to the United States. Smailys says local Lithuanians and even Americans are interested in the Lithuanian beer.
Vilniaus Bankas plans expansion to the East
Vilniaus Bankas aims to retain the lead on domestic market and pursue eastward expansion this year. The bank, which put retail banking as its priority, intends to retain investments into IT at the level of 2003. Moreover, the bank, pursuing a significant rise in loan portfolio, will place several bond issues."
I hope this year to become a breakthrough," Julius Niedvaras, Vilniaus Bankas president, said at Friday's news conference.
Niedvaras added that SEB ruled to expand its operations in Russia and Ukraine in 2003, which prompted the Lithuanian bank "to pay much more attention to these markets this year".
The bank intends to retain the lead in the majority of market segments this year. This year the banking group will raise assets LTL to 10 billion and report pre-tax earnings of nearly LTL 140 million, Niedvaras noted.
Lithuanias public debt shrank by another LTL 81.2 million
Lithuania's public debt shrank by LTL 81.2 million, to LTL 13 billion in January, the third consecutive month of decline.
The public debt accounted for 22.2 percent of the country's projected gross domestic product (GDP) for 2004, the Ministry of Finance has reported. Under Maastricht criteria, the maximum permissible debt ratio totals 60 percent of GDP.
Lithuania's foreign debt stood at LTL 8.87 billion as of January 31, representing 68 percent of the total public debt.
Public liabilities declined by LTL 58.8 million to LTL 11.6 billion, while state guarantees against credits slipped LTL 22.4 million, to LTL 1.4 billion.
The state borrowed LTL 9.8 million and repaid LTL 5.6 million to foreign creditors during the month. Currency fluctuations raised the direct foreign debt by LTL 1.4 million.
Friday, 27th of February
Changes of top executives at the Lithuanian breweries
Tomas Kucinskas, managing director of Utenos Alus-Svyturys, Lithuania's number-one beer producer in terms of sales, is to be appointed president of BBH Baltics, a new subsidiary of Baltic Beverages Holding (BBH) that is being set up in Vilnius. Kucinskas is currently vice-president of BBH, which is the majority shareholder of Svyturys-Utenos Alus.
BBH Baltics will coordinate operations of all three BBH-controlled breweries in the Baltic countries - Svyturys-Utenos Alus, Estonia's Saku and Latvia's Aldaris. Kucinskas is to step down as managing director of Svyturys-Utenos Alus in about a month's time. He is to be appointed chairman of the company's management board at a general meeting of shareholders.
Svyturys-Utenos Alus has not named any potential successor to Kucinskas in the post of managing director. The most likely candidate, according to the unofficial sources is Rolandas Virsilas, CEO of Kalnapilis-Tauras, Lithuania's second-biggest brewery and the main competitor of Svyturys-Utenos Alus. If Virsilas leaves Kalnapilis-Tauras, it will be the second change of top executive at the company. Sources say that the Danish Brewery Group has overpaid for the company in 2001 by paying LTL 160 million, when another pretender offered only slightly more than LTL 70 million. Thus, the Danes are now keen to retrieve their investments faster, which is not realistically possible.
(Respublika, Lietuvos rytas)
Lithuanian might need to build another seaport
Lithuania might come across the need to build another seaport after 2014, with the operating port of Klaipeda no longer able to meet the fast-growing demand. The new port may emerge in the Melnrage district of Klaipeda, with other options also available, said experts of Japanese International Cooperation Agency (JICA), conducting a feasibility study into the development of the seaport by 2015.
JICA experts were asked to produce comparative economic assessments for the construction of a new port during the final stage of the study. The feasibility study into development of the port of Klaipeda shall be completed by August.
The study will lay the foundations for the master plan of operation of the port of Klaipeda by 2025, the plan of development of the port by 2015 and assessment of key investment project foreseen.
The port of Klaipeda reported a 7.4 percent rise in cargo traffic for the full year 2003, to 21.192 million tons from 19.740 million tons in 2002. The Klaipeda Port Authority has reported that crude, fertilizers and containers accounted for the major part of cargo traffic last year.
The port serviced 6,805 vessels, 4.7 percent more versus 2002.
(Respublika, Verslo Zinios)
Linikodas enters Latvian market
Linikodas, the largest Lithuania's digital bar code technology developer, intends to establish a subsidiary in Latvia this year.
The subsidiary should alleviate implementation of larger projects in Latvia, where the company cooperated with seven enterprises, said Darius Zemaitis, Linikodas CEO.
Last year the company set up a subsidiary Ukrlinikod in Ukraine.
Last year Linikodas raised sales by 61 percent, to LTL 4.8 million from LTL 2.981 million in 2002. This year the company expects to report sales of LTL 6.5 million.
Data storage and transmission hardware and software accounted for 35 percent of total sales of the company, with label printers and raw materials comprising 30 percent, and readout equipment accounting for another 25 percent of turnover.
Thursday, 26th of February
Kraitene increases exports to Germany
Lithuanian manufacturer of ice-cream and fish products UAB Kraitene plans to increase its exports to Germany this year. The companys exports to Germany amounted to LTL 4.5 million last year, which was a 49 percent increase compared to 2002.
Export volumes to Germany should continue growing this year. UAB Kraitene plans to export both ice-cream and frozen fish products to Germany. The assortment of frozen fish from the Baltic Sea and herring products have been recently presented at the Fish International exhibition held in Germany.
Giedrius Bachmanavicius, responsible for exports at UAB Kraitene, says Germany is a very attractive market for the Lithuanian company.
UAB Kraitene is Lithuanias leading exporter of ice-cream. The companys ice-cream export volumes reached LTL 10.6 million last year, which accounts for 47 percent of the overall ice-cream sales of the company.
Achema posts record result
Achema, top Lithuania's producer of fertilizers owned by the Achema Group, reported a 4.1-fold rise in pretax earnings, which grew from LTL 3.89 million to LTL 16 million in the full year 2003.
Sales of the company surged by 18 percent, to LTL 575 million, from LTL 486 million recorded for 2002.
Jonas Sirvydis, Achema CEO, attributed a rise in earnings to higher prices of fertilizers on foreign markets and lower cost price of products resulting from investments into expansion of manufacturing. Fluctuating currency rates have been favourable to the company as well, adds Sirvydis.
In 2003, compared with 2002, the fertilizer producer boosted exports by 17 percent, to LTL 490 million. The company marketed some 85 percent of its output in France, Benelux countries, Germany, UK, Scandinavia, US, Poland, etc.
Lithuanians to export mattresses to Northern Europe
Siauliai-based AB Neaustiniu Medziagu Fabrikas (NMF) has established a new subsidiary UAB Litmatrasas, which will make and export mattresses to Scandinavian countries.
Stanislovas Grusas, one of owners of NMF, has ambitious plans to occupy a significant part of the Scandinavian mattress market. He says the company is currently in negotiations with the Finnish, Swedish and Norwegian partners and hopes contracts will be signed soon.
Grusas admits that NMF made a mistake several years ago, when it established a joint-stock company with the Swedes UAB Gemega for production of mattresses and took an obligation not to export mattresses to Scandinavia. Thus, with the establishment of UAB Litmatrasas Siauliai-based company hopes to correct its mistake.
UAB Gemega is currently making mattresses for the Lithuanian and Latvian markets. It makes 8,000-9,000 mattresses per year and sells 25 percent of them in Latvia.
Wednesday, 25th of February
Poultry consumption should increase in Lithuania
Lithuanian Institute of Agrarian Economy forecasts that consumption of poultry in Lithuania should increase by 14.2 percent in Lithuania over the next two years. The consumption of beef is expected to grow as well.
The consumption of beef and veal per capita was 12.9 kilograms last year. The number should reach 13.2 kilograms before 2006. Speaking of the situation in the European Union countries, the consumption of beef and veal is expected to increase by 0.7 percent from 13.8 to 13.9 kilograms per year.
The consumption of pork in Lithuania is currently 23.3 kilograms per year and should reach 27.7 kilograms in two years. The numbers are significantly down compared to 43.1 kilograms in the European Union countries.
The consumption of poultry in Lithuania is forecasted to grow by 15.7 percent before 2006 and reach 12.5 kilograms. The consumption of poultry in the European Union currently stands at 20.4 kilograms and is expected to reach 21.4 kilograms in two years.
(Verslo Zinios, Lietuvos Zinios)
Profit of Grigiskes grew by 30 percent
Grigiskes, Lithuania's leading hardboard and toilet paper producer, has reported a 34.6 percent year-on-year growth in earnings to LTL 649,900 for January, as its monthly sales soared by 30.7 percent, year-on-year, to LTL 8.07 million.
Grigiskes is projecting a profit of LTL 8.7 million on sales of LTL 102 million for the full year 2004, with LTL 16 million earmarked for investment.
Grigiskes completed the takeover of Naujieji Verkiai, the producer of corrugating paper, wrapping paper and toilet paper, in late January. Both companies are based in the capital of Vilnius.
Grigiskes announced a profit of LTL 11.64 million on sales of LTL 79.7 million for the full year 2003.
Continental passed on Lithuania
German concern Continental AG, one of the largest tire manufacturers in the world, chose Brazil over Lithuania for its new tire plant. Sources close to Verslo Zinios say that although Lithuania has a number of advantages, the choice of the Germans was mainly decided by faster construction time and the more favourable tax system.
Had Continental AG chosen Lithuania, the plant would have been built in Klaipeda Free Economic Zone. Representatives of the concern say that Lithuania still remains in its near future plans.
The German concern emphasizes that Lithuania is a very attractive country for investments. Continental AG notes that in case another plant is going to be built in Europe, the choice will be much easier.
Sources of Verslo Zinios say the Germans are considering moving the production from Germany to another country after several years and Lithuania might be one of the candidates.
Tuesday, 24th of February
Alita earned LTL 9.2 million last year
Alita, Lithuania's leading sparkling wide producer, has announced a net profit of LTL 9.2 million for 2003, up from a net profit of LTL 3.226 million for 2002.
Alita reported its 2003 financial result to the National Stock Exchange of Lithuania (NSEL) on Monday.
The company, which was sold into private hands earlier this year, had projected a net profit of LTL 6 million on sales of LTL 90 million for the full year 2003. The result has been achieved thanks to impressive sales of several products that exceeded initial expectations.
Vilmantas Peciura, Alita's director for finance and administration, said the company will pay no dividend to shareholders for 2003, as it plans to transfer the profit into reserves.
In early January, Invinus, the company set up by managers of Alita, paid the state LTL 58.05 million for 83.77 percent of shares in Alita. The new majority shareholder is to complete a buyout of minority shareholders in Alita this week, boosting its stake in the company to 88.35 percent.
Tourism exhibition to be larger and more varied this year
The annual tourism exhibition Vivattur 2004 will take place in Litexpo exhibition palace in Vilnius on March 4-6. The exhibition is expected to be larger than ever this year with 214 participants with 54 of them being foreign organizations. 32 Lithuanian tour operators will present their services in the exhibition.
Kestutis Ambrozevicius, president of the Lithuanian Tourism Association, says the interest in Lithuania is growing. For instance, the number of tourists from Spain or France increased significantly last year. The interest in the country might be attributed to its upcoming membership in the European Union.
Lithuanian municipalities and resorts also plan a strong showing at this years exhibition. The investment project called Dipolis Vilnius-Kaunas will be presented as well.
Subsidiary of Lithuanian Airlines sold to Kaunas-based company
Arijus, the Kaunas-based fright forwarding and transportation company, has been acknowledged the winning bidder for 100 percent of shares in Aviakompanija Lietuva (Air Lithuania), a subsidiary of the air carrier Lietuvos Avialinijos (Lithuanian Airlines, or LAL).
Arijus has raised the initial price of LTL 715,000 to LTL 2.05 million. Aviakompanija Lietuva has two 46-seat aircrafts ATR and flies to a number of Scandinavian cities. Arijus expects to use Aviakompanija Lietuva for fright forwarding in the future.
Arijus started air transportation in 1997; Lithuanian Airlines, SAS, Finnair, Aeroflot, Lufthansa, air Baltic, Air France, Estonian Air, Austrian Airlines and the World Freight Group association have been its major partners so far.
Monday, 23rd of February
Lithuanian GDP is forecasted to grow by 7 percent
Lithuanian Ministry of Finance forecasts that Lithuanian economy will grow by 7 percent this year, while the number should reach 7.3 percent in 2005.
The forecast has been altered taking into account current tendencies of economy and possible future developments. The Finance Ministry previously forecasted the growth to be 6.2 percent this year and 6.5 percent next year.
Raimonda Zutautiene, representative of the Finance Ministry, expects exports to continue growing in the future, especially in the light of the opening new foreign markets and improving trading conditions.
Lithuanian GDP is expected to grow by 6.6 percent in 2006 and 6.3 percent in 2007. The annual average inflation in Lithuania is forecasted to be 0.9 percent.
Vilniaus Bank, controlled by the Swedish SEB, and Nord/LB Lietuva, controlled by the German bank Nord/LB, predict Lithuanian GDP to grow 6.8 percent this year.
(Lietuvos Zinios, Verslo Zinios)
Norwegian furniture maker found success in Daugai
Norwegian businessman Ivar Opsvik says he is very satisfied with his decision to establish furniture-making company in Lithuanian town of Daugai. UAB Lombaltic produces furniture only for the Norwegian market and its turnover is growing annually. According to Opsvik, the company is able to make high-quality furniture at low cost, which makes the production extremely competitive in Norway. The Norwegian businessman has already invested LTL 2.5 million into the Lithuanian company.
The company is now looking to sell its production in the Lithuanian market. Mr.Opsvik expects several furniture makers to establish a retail network, which would sell their production under one name. Such decision would save advertising costs for all members of such network.
UAB Lombaltic has plans to start the production of small log houses with the Norwegian-style interior created from the furniture made by the company.
Lietuvos Energija is interested in energy bridge
Lithuania's state-owned power transmission company Lietuvos Energija (Lithuanian Energy) has said it does not rule out joining a project to build an undersea power cable to connect Estonia and Finland, but added that no agreements have been reached yet.
"We may possibly join this project, but its initiators should present a business plan before we can decide whether or not we would benefit from this," Rymantas Juozaitis, CEO of Lietuvos Energija, said. Lietuvos Energija thinks it would be worth while investing in the project and holding around 10 percent of shares in the joint venture.
Meanwhile, representatives of Estonia's state-run energy company Eesti Energia said that Lithuanian, Latvia and Estonian companies reached agreement in principle on investment in the project on Thursday.
Investments in the 350-megawatt undersea cable between Estonia and Finland are estimated to reach between EUR 110 million and 120 million.
Other partners in the project would include Eesti Energia, Latvia's Latvenergo and the Finnish energy companies Pohjolan Voima and Helsingin Energia.
If investment decisions are taken this spring, the cable could become operational by the end of 2005.
Baltic Weekly MonitorA