Observer "Lietuva"

WEEK 20.2005

Saturday, 21st of May

The Swedish company DIAB International will manufacture parts for windmills and boats in the northern Lithuanian city of Siauliai. A similar plant operate s in Laholme, Sweden. The official inauguration of the plant in Siauliai, although it launched operations last December, is scheduled for today.
Lietuvos Rytas, Respublika

Tariffs will increas Color e as of July
Lietuvos Gelezinkeliai, the state-run Lithuania's railway operator, has postponed planned rising of tariffs for the transit of cargo between Kaliningrad and Russia via Lithuania's territory until July 1, 2005. Lithuania and Russia were currently negotiating the raising of those tariffs, Juozas Senuta, Lietuvos Gelezinkeliai deputy CEO, said, adding that the talks could only be commented in detail by Foreign Ministry. Currently the tariff for conveyance of oil, petroleum products and ferrous metals stood at EUR 737 per ton, while the rate for frozen foodstuffs made up EUR 14.1 per ton, Senuta said.
According to the data made available by the Statistics Department, cargo flow via Lithuania's railways made up 11.66 million tons in the first three months of 2005.
Respublika, Lietuvos Zinios

Hansabankas forecasts 6.8 percent growth of GDP
Hansabankas, a member of Hansabank, the largest financial group in the Baltics, forecasts that the Lithuanian economy will grow by 6.8 percent this year compared with 2004. In its latest Lithuanian Macroeconomic Overview report released on Friday, the bank predicts that GDP growth will slow down somewhat, to 6.4 percent, in 2006. The economy expanded by 6.7 percent in 2004. The bank forecasts that the country's inflation rate will reach 3.2 percent this year and edge down to 3 percent in 2006. Unemployment is expected to stand at 10 percent in 2005 and fall to 9 percent next year. The current account deficit is forecast to reach 8 percent of GDP this year and widen somewhat to 8.5 percent next year.

Friday, 20th of May

Three-quarters of vacant positions in service sector
A total of 6,300 vacancies, mostly for service sector workers, were available in Lithuania as of late March. The survey of the Statistics Department, which involved the polling of 8,160 companies, has revealed the demand in 4,700 workers in the service sector.
According to the data from the Lithuanian Labour Exchange, a total of 112,500 job seekers were registered with territorial labour exchange units as of May 1, a decline of 42,300 job seekers or 27.3 percent from the year-earlier figure. Territorial labour exchange units had 15,700 vacancies, including 2,800 seasonal jobs, on offer.
In April the unemployment rate in Lithuania declined by 0.5 percentage point from March, to 5.4 percent.
Kauno Diena, Verslo Zinios, Respublika, Lietuvos Rytas

Insurance market soared by 8 percent
Lithuania's insurance market expanded by 8.4 percent in the first four months of 2005, year-on-year, with total direct premiums written reaching LTL 339.513 million, the country's Insurance Supervisory Commission reported on Thursday.
Direct non-life premiums rose by 5.7 percent year-on-year to LTL 258.022 million, accounting for 76 percent of overall premiums. Life insurance premiums surged by 18 percent to LTL 81.491 million, or 24 percent of total premium amount.
Insurance payouts totalled LTL 122.274 million in the first four months of 2005, a surge of 22.7 percent from the year-earlier figure. Non-life insurers paid out LTL 111.544 million in claims (up by 26.4 percent), while life insurers paid out LTL 10.731 million (down by 5.8 percent).
Verslo Zinios

Lietuviskas Midus earns profit
Lietuviskas Midus, a producer of Lithuanian mead, announced on Thursday that it had finally managed to climb out of the hole that it was in 2004. In the first three months of 2005 it earned LTL 67,000. In this period of the previous year, the company had a loss of LTL 307,000. The representatives of the company attributed positive results to the change of production package and exports.
At the present time, Lietuviskas Midus produces 5 kinds of mead with alcohol content below 16 percent, 12 kinds of mead with about 50 percent alcohol and Zalgiris, which contains 75 percent alcohol.
Verslo Zinios, Lietuvos Rytas

Thursday, 19th of May

Compulsory motor insurance market declined to LTL 94.2 million
Lithuania's compulsory motor third-party liability insurance market declined by 2.4 percent year-on-year to LTL 94.205 million in the first four months of this year. In April compulsory auto insurance premiums written reached LTL 55 million, rising by 14.1 percent from LTL 48.2 million in the same period a year ago. Month-on-month, the premiums almost trebled, from 2LTL 0.4 million in March. Insurance companies paid out a total of LTL 36 million in compulsory motor insurance claims during the four months, 48.4 percent more than a year earlier.
Respublika, Verslo Zinios

Rubicon Group projects biggest profit in the end of this year
The Rubicon Group, one of Lithuania's largest conglomerates, on Wednesday reported pre-tax earnings of LTL 2.9 million for the first quarter of 2005, a drop of 38 percent from LTL 4.7 million in the same period a year ago. The group said its revenues for the first quarter fell by 28 percent year-on-year to LTL 54 million.
"Given that most of the group's companies operate in the utilities, manufacturing and bio-energy sectors, we expect the largest revenues to be generated at the end of the year," Andrius Janukonis, the Rubicon Group's board chairman, said.
The Rubicon Group owns over 30 companies in the manufacturing, utilities, real estate and entertainment sectors. The companies operate in nine Lithuanian cities and towns, and employ a workforce of over 1,400 people.

Pension is to grow by LTL 50 as of July
The old-age pension in Lithuania will grow on average by LTL 50 as of July. On Wednesday, the Government decided that the base pension will increase by LTL 28 and insured income will grow by LTL 94. The base pension will increase from LTL 172 to LTL 200, and insured income will grow from LTL 990 to LTL 1,084.
A total of about 881,000 people in Lithuania receive a pension from the State Social Insurance Fund (SoDra). SoDra will spend an additional LTL 247 million to increase pensions in the second half of 2005.
Prime Minister Algridas Brazauskas said that pensions might grow even more at the end of this year if the state budget revenue estimate was met.
Kauno Diena, Lietuvos Zinios, Lietuvos Rytas

Wednesday, 18th of May

Danisco closes down one plant in Lithuania
Denmark's Danisco Sugar has opted to close one of three its sugar plants in Lithuania and shift manufacturing to its remaining production facilities in Panevezys and Kedainiai. The sugar plant in Kursenai will stop manufacturing from the upcoming sugar processing season.
"We have achieved high efficiency at Panevezys and Kedainiai plants in recent years, and the level of quality comparable with other sugar companies under Danisco control. Moreover, we have improved environmental protection measures considerably," Michael Persson, Danisco Sugar vice-president, said.
Concentration of manufacturing at these two plants will the company to achieve further efficiency required to sustain Lithuania's sugar industry.
Amid an improvement in quality of sugar beet, three Lithuania's sugar plants under the management of Danisco Sugar produced 104,000 tons of sugar last year, a rise of 1.9 percent from the year-earlier figure, and exceeded the sugar manufacturing quota by more than one-fourth. The quota assigned for Danisco Sugar plants in Panevezys, Kedainiai and Kursenai made up 82,000 tons from the total Lithuania's quota of 103,010 tons.
Lietuvos Rytas, Lietuvos Zinios, Respublika

Construction volume increases
Backed by strong demand, construction of new apartment houses surged to 577 in Lithuania in the first three months of 2005, while the number of new apartments on the market soared by 26.1 percent, year-on-year, to 1,380. A total of 565 apartments were fitted out at private houses or cottages, a decline of 0.7 percent from the year-earlier figure. The number of apartments at 21 multi-storey dwelling houses, meanwhile, surged by 55.2 percent, year-on-year, to 815.
Total useful area of all new apartments fitted out in Lithuania in the first three months of 2005 made up 156,932 m2, a rise of 25 percent from the year-earlier figure of 125,500 m2. Housing construction market continued to flourish in Vilnius district with 195 dwelling houses and 826 apartments fitted out during the reporting period. However, the lion's share of new houses built in Vilnius (180) comprised private dwelling houses or cottages with one or two apartments.
Lietuvos Zinios, Verslo Zinios

Lithuania blocks sales of hazardous cement
The Lithuanian State Non-Food Products Inspectorate has banned the sale of cement in which the concentration of hexavalent chromium, a substance hazardous to health, exceeds permitted levels. Cement containing higher than permitted levels of hexavalent chromium has been imported to Lithuania until now, mostly from Russia and Belarus, although the European Commission prohibited the supply or use of such cement in EU countries back in January. Cement imported from Russia and Belarus was initially tested for hexavalent chromium concentrations at the laboratory of Akmenes Cementas, Lithuania's only cement manufacturer. To ensure the impartiality of the results, the test was later repeated at the Thermal Insulation Institute at Vilnius Gediminas Technical University. Hexavalent chromium concentrations in the cement samples exceeded permitted levels by 3 to 7 times and that skin contact with this substance may cause dermatitis. Cement imported from Russia and Belarus is generally cheaper than that produced in Lithuania or imported from other EU countries.
Respublika, Verslo Zinios, Lietuvos Zinios´

Tuesday, 17th of May

Salaries of senior managers
Senior management salaries in Lithuania are among the lowest in Europe, but they can buy more with their salaries than their higher paid counterparts in some Central European countries, a new study by Mercer Human Resources Consulting has revealed. Senior managers in Lithuania earn EUR 41,4 euros per year on average, according to Mercer's latest International Geographic Salary Differentials Report. Lietuvos Zinios

Power exports declines
Lietuvos Energija, the state-run power transmission company, exported 1.649 billion kilowatt-hours (kWh) of electricity during the first four months of 2005, down from 3.362 billion kWh it exported in the same period a year ago. The company said it sold 1.468 billion kWh of electricity to Russia, 158.6 million kWh to Latvia and 22.5 million kWh to Estonia during the four months.
In May Lietuvos Energija expects to export around 308.7 million kWh of electricity in total, including 305 million kWh to Russia and 3.7 million kWh to Estonia. This is down from 473 million kWh it exported a year earlier.
Verslo Zinios

Investments answered the purpose
The first quarter sales of Audimas, the leading producer of sportswear in the Baltic States, increased 35.8 percent from LTL 11.3 to LTL 18.93 million, compared to the corresponding period of 2004. The company attributed the growth of sales to investments into technologies, development of retail network that served the purpose as well as the increasing exports. In 2005, Audimas intends to invest up to LTL 17.2 million in modernization. The funds of the company will make up LTL 10 million of the investment, and the firm expects to receive the rest of the sum from EU structural funds.
Verslo Zinios

Monday, 16th of May

Investment flow plunged
Lithuania did not succeed in boosting the amount of direct foreign investments (DFI) during the first quarter of 2005. The flow of FDI to the country totalled LTL 637.7 million during this period, or 1 percent lower against the year-ago quarter. The first-quarter investments in equity capital in Lithuania stood at LTL 204.55 million, with re-investments making up LTL 224.32 million. Analysts pinpoint about a twofold larger amount of investments per capita that are channelled to Estonia. The amassed amount of FDI per capita in Lithuania is lowest in the EU.
Verslo Zinios

Vesiga travels to Great Britain
Vesiga, the Lithuanian producer of mayonnaise, ketchup and other sauces under the Daumantu brand, has started exports to United Kingdom. The company has shipped the first 24 tons of ketchup and tomato sauces to Britain. It is to export 170 tons of Daumantu sauces under a LTL 200,000 contract with Finley Food. Vesiga exports majority of its production to Scandinavia, Germany, Ireland, US, and Russia. Last year, the company entered the Icelandic market. Presently, Vesiga holds talks with wholesalers of Austria, Hungary and France over exports. Turnover of the producer amounted to LTL 26 million in 2004.
Verslo Zinios

Bank loan opens the door
SEB Vilniaus Bankas, the largest Lithuania's commercial bank, has lead managed a syndicated LTL 125 million loan for Vilniaus Vartai, a real estate project of investment company Ranga IV Investicijos. The construction of Vilniaus Vartai complex, which will accommodate business administration, commercial and dwelling premises at the area of 67,000 m2, was launched last summer and is expected to be completed in March 2006. Real estate developer Ranga IV Investicijos, a member of leading Lithuania's construction group Ranga IV, has already invested almost LTL 35 million in own resources into the project.
Verslo Zinios, Lietuvos Rytas

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