Observer "Lietuva"

WEEK 22.2005

Saturday, 4th of June

Jobless rate declined to 4.8 percent in May
Jobless rate in Lithuania declined by 0.6 percentage point, to 4.8 percent in May versus April, the Lithuanian Labour Exchange has announced. As of June 1, the number of jobless persons registered at territorial labour exchange units plunged by 44,900, or 30.9 percent, year-on-year, to reach 100,500. In one month the number of registered unemployed declined by 12,000 or 10.7 percent. As of early June, the number of jobless women stood at 60,300 comprising 60 percent of total unemployed. The ranks of jobless women shrank by 7.7 percent over one month, and plunged by 26.4 percent versus May 2004. The number of jobless men stood at 40,200, or 40 percent of total jobless figure. The ranks of jobless males declined by 14.8 percent from April and plummeted by 36.7 percent from May 2004.
Among major cities, unemployment rate ranged from 2.9 percent in Siauliai to 5 percent in Panevezys.
Kauno Diena, Respublika

EBRD invests into Siauliu Bankas
The European Bank for Reconstruction and Development (EBRD) on Friday signed an agreement to buy a 16.1 percent equity stake in Siauliu Bankas, the fastest-growing bank in the Baltics. The EBRD is buying 12 million shares in Siauliu Bankas at a price of LTL 1.70 per share with a nominal value of one litas. The total value of the transaction is LTL 20.4 million. The EBRD has said that its investment will provide the capital and support to continue the expansion of Siauliu Bankas, transforming it into a strong national bank focusing on small and medium-sized enterprise (SME) finance. The European Bank is also expected to arrange a syndicated loan of EUR 12 million euros for Siauliu Bankas. The Board of Directors is to take on a decision on the project on June 28. The EBRD extended a EUR 5-million credit line to Siauliu Bankas for SME on-lending in 2000.
Respublika, Lietuvos Zinios

The first T-Market store in Bulgaria
VP Market, the largest retailer in the Baltics, opened its first T-Market store in Bulgaria as part of its expansion in Eastern Europe. VP Market said the 400-square-meter store in Sofia offers an assortment of almost 5,000 food and non-food products. The group posted sales of LTL 1.142 billion in the three Baltic countries and Romania in the first quarter of 2005, a rise of 21 percent from the same period a year ago.
VP Market currently operates 195 stores in Lithuania, 88 in Latvia, 20 in Estonia, eight in Romania, and one in Bulgaria. It plans to open about 100 new retail outlets this year, with planned investments of around EUR 100 million. The group's sales in the three Baltic countries rose by 15.8 percent to LTL 4.16 billion in 2004. It targets a 15 percent rise in sales this year.

Friday, 3rd of June

PST suspends activities of subsidiaries
Panevezio Statybos Trestas (PST), one of Lithuania's leading construction companies, has suspended the activities of two foreign subsidiaries, Riga-based PS Trests and Baltliltstroj in Kaliningrad. The businesses were suspended last year, PST said in its annual report, without specifying the reasons for freezing the businesses, however. The Panevezys-based company controls 100 percent of PS Trests and Baltlitstroj. Both companies ended the year 2003 in the red. PST owns Russia's subsidiary SK Petrolit, the company has said on its website.
Last year PST was active on Lithuania's and Russia's markets, which accounted for 76 percent and 24 percent of total sales, respectively. In Lithuania, PST controls eight subsidiaries, which ate up the investments well above 30 percent of company's authorized capital.
PST group posted LTL 2.959 million in net earnings on sales of LTL 157.628 million in 2004. For 2005 the group is projecting the net earnings of some LTL 7.8 million.
Lietuvos Zinios, Verslo Zinios

Investments in Lifosa were confirmed
Eurochem, the largest producer of fertilizers in Russia, has approved two investment projects at Lifosa, the leading producer of phosphate fertilizers in the Baltic States. The two projects are worth a total of LTL 28.2 million. Lifosa intends to invest LTL 22.3 million in the modernization of sulphuric acid absorption technology. As reported earlier, the company expects to attract about LTL 8 million from the EU for the project, which should be completed by the end of 2006. According to a report released by Eurochem, because Lifosa will practically eliminate the discharge of heat into the atmosphere, this project will have a positive effect on the environment.
Verslo Zinios

Chinese eye on Baltic seaports
Chinese shipping operators will consider possible establishment of logistics centre in Klaipeda, which will handle Chinese cargo heading to Russia and CIS states.
Following a meeting with Lithuania's policy makers, Chinese Communication vice-Minister Xu Zuyuan told the reporters that Chinese shipping companies would consider possible opening of logistics centre in Klaipeda; however, the final decision would be made by shippers themselves.
"We have learnt that this port may service a wide range of our shipments," the official said.
Verslo Zinios

Thursday, 2nd of June

Turnover of Apranga
Apranga, Lithuania's largest clothing retailer controlled by private MG Baltic concern, reported LTL 70.694 million in sales for the first five months of 2005, a surge of 64 percent from the year-earlier figure. In May alone, the sales of the company, which is active in all three Baltic countries, soared by 77.5 percent, year-on-year, to LTL 14.156 million. Sales on Lithuania's market rose by 26.6 percent, to LTL 47.254 million, while sales on foreign markets surged more than fourfold, to LTL 23.439 million in the first five months of 2005.
Apranga group opened three new stores and completed reorganization of one outlet in the January-to-May period. By the end of the year, the group aims to add 7 new stores to its existing chain.
The retailer is projecting pre-tax earnings of LTL 11.049 million on sales of LTL 208.2 million for full 2005. In 2006-2008 the earnings are projected to rise by 30 percent each year.
Lietuvos Zinios

Assistance for water amusement park in Druskininkai
Economy Minister Viktor Uspaskich has backed a decision by a selection committee to provide LTL 28.773 million in financial support from the EU structural funds to a municipal water amusement park project in the spa resort of Druskininkai, in southern Lithuania. The implementation of the project began in late 2004. The Lithuanian Business Support Agency said that the minister signed an order on the EU aid allocation on May 26.
The EU funds will go to create the water park's infrastructure. A private operator will be selected through a public tender to implement the project. The operator will have the right to use the infrastructure after the project is completed.
The construction of the water park with a total area of 25,000 m3 started last December and is scheduled to be completed in late 2006. The project is expected to attract over LTL 150 million in direct and indirect private investments and to create about 70 new jobs.
Lietuvos Rytas, Lietuvos Zinios

Three warnings
Three insurance companies in Lithuania that did not inform their clients about the reasons for delayed insurance payments received warnings and fines. PZU Baltija will have to pay fines of LTL 1,000 and LTL 500 due to the complaints of two customers.
Another two insurance companies - Ingo Baltic and Ergo Gyvybes Draudimas - received warnings. According to Arturas Plokstas, an official of the Insurance Supervisory Commission, PZU Baltija did not inform its clients about delays for nine months.
Lietuvos Rytas, Respublika

Wednesday, 1st of June

Lietuvos Spauda is in the hands of Finnish
Rautakirja, a member of Finland's SanomaWSOY Group, bought a 100 percent stake in Lietuvos Spauda, the leading kiosk chain in the country, on Tuesday. "We signed the agreement today and will be waiting for the Competition Council's decision now," Vidas Ksanas, Lietuvos Spauda's chairman, said. He did not disclose the value of the deal.
Rautakirja said in a statement that the deal would help the group to further strengthen its positions in the Baltic region.
"This acquisition brings our long-term Baltic strategy to a well-crafted conclusion. The Lietuvos Spauda chain is in good financial shape and is operating under an efficient chain-management concept," Rautakirja CEO Erkki Jarvinen said.
Rautakirja said Ksanas would continue as CEO of Lietuvos Spauda. The Finns bought the shares in Lietuvos Spauda from six private persons.
In Lithuania, Rautakirja also controls Impress Teva, a press distribution company, the cinema theaters Vingio Kino Teatras, Coca-Cola Plaza and Forum Cinema Akropolis, and V&K Holding, a video distribution company.
Respublika, Lietuvos Rytas, Verslo Zinios

Construction prices went up
Construction prices in Lithuania rose by 1.4 percent in April from March and were up by 7.5 percent from the same period a year ago. Year-on-year, residential construction costs went up by 7.8 percent and non-residential construction costs by 8 percent. In month-on-month terms, residential construction costs climbed by 1.3 percent, while non-residential costs rose by 1.5 percent. The monthly increase in construction price index resulted on a 2 percent monthly rise in wages and other expenses and a 0.8 percent increase in prices of building materials and products.
Lietuvos Zinios, Respublika

Silver for production of Stumbras
Originali Lietuviska Auskine Degtine, Stumbro Starka and Trejos Devyniarios, strong alcoholic drinks produced by the Lithuanian distillery Stumbras, were awarded silver medals at the international contest that took place in Germany.
The experts of the International DLG Quality Competition for Spirits 2005 evaluated the drinks according to their colour, transparency, aroma and taste. A total of 193 brands of drinks were rated.
"Our strong alcoholic drinks are quite well-known in Israel, Poland, Latvia, the US, and other foreign countries. We hope that these awards will help strengthen our positions in these markets," Cesolvas Matulevicius, the CEO of Stumbras, said.
In January-April, the sales of Stumbras amounted to LTL 28.8 million, a 13 percent increase year-on-year.
Lietuvos Rytas, Respublika

Tuesday, 31st of May

Sanitas’ expansion
Sanitas, Lithuania's biggest pharmaceutical producer, sees its consolidated sales, including the sales of Altisana subsidiary and soon-to-be-acquired Slovak pharmaceutical company Hoechst-Biotika, exceeding LTL 49 million in 2005 and rising further to LTL 80 million in 2006.
Sanitas announced on Monday that it would buy Slovak pharmaceutical company Hoechst-Biotika from France's Aventis for LTL 43.85 million and would place a new share issue to rise about a half of funds required for the acquisition.
Last year audited net earnings of Kaunas-based company surged to LTL 4.649 million, while sales rose to reach LTL 43.002 million.
Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios

Ragitis boosts authorized capital 6 times
The authorised capital of Ragutis, a brewery in Kaunas, will increase 6 times to LTL 39.253 million. Ragutis decided to increase its capital through the contributions of stockholders. The company has major debts to its major owner. It is therefore most likely that the Finnish company Olvi, the biggest owner of the Lithuanian brewery, plans to capitalise its loans to the company.
Verslo Zinios

Break in Ekranas
Ekranas, one of Europe's leading colour picture tube (CPT) producers with a one-fourth market share, will pause manufacturing for four weeks in July-to-August period, whereas Vilniaus Vingis, the key supplier of Ekranas and the producer of deflection yokes, still keeps mum over its manufacturing plans for summer.
Lietuvos Rytas, Respublika

Monday, 30th of May

Cargo and passenger volume surge
In the first three months of 2005, cargo transportation by motorway in Lithuania climbed to 8.5 million tons, 0.5 percent higher than it was in the first quarter of the previous year. The number of passengers transported by trolleybuses went up 7.8 percent, and the number taking buses and shared taxis increased 4.1 percent in this period.

Webmedia steps in Lithuania
Estonia's information system development and consulting company Webmedia has established a subsidiary in Lithuania. The Register of Legal Persons has announced that the new company will be headed by Arnoldas Jankunas, former sales and marketing director of Lithuania's IT company Alna, who withdrew from the company earlier in May. Webmedia offers a wide range of IT services, including strategic IT consulting, information system development, system integration, etc.
Verslo Zinios

Sales of raw fish will not be banned in Lithuania
So far, Lithuanian authorities do not intend to follow the example of the neighbouring Latvia and ban selling live fish at supermarkets. As of July 1, trade in raw fish, molluscs will be banned across grocery stores and markets in Latvia. This is being done as fish tanks at supermarkets have been found to be overflowing, and also in response to numerous complaints by the people. In the meantime, although such complaints are filed occasionally in Lithuania as well, so far there are no intentions to ban selling live fish at supermarkets. The Lithuanian State Food and Veterinary Service is receiving few complaints about fish being crammed or mauled in fish tanks. Fish was rather marketable merchandise in Lithuania.
Verslo Zinios

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