Observer "Lietuva"

WEEK 31.2005

Saturday, 6th of July

Gazprom threatens to increase gas price
Lietuvos Dujos and Russia's gas giant Gazprom, which owns a stake in Lithuania's gas transportation and distribution operator, may rise the prices of natural gas for Lithuania unless the authorities review the decision on the sale prices of gas, which is unfavourable for the gas company, Alexander Ryazanov, Gazprom deputy chairman, has said after the meeting with Lithuania's Prime Minister Algirdas Brazauskas. He refused, however, to specify the prospective increase in gas prices for Lithuania if the government disregarded the requirements of Gazprom.
In late June, the State Control Commission for Prices and Energy reduced the prices of gas for large industrial users by 6 percent on average, starting from July 1. Lietuvos Dujos might lose some LTL 25 million in a year from July 1 owing to unfavourable decision by the control commission, Ryazanov pointed out. Shareholders of Lietuvos Dujos have promised to set out their position and relevant proposals to the Cabinet leader in writing.
Meanwhile, Ryazanov said that Gazprom would retain gas transportation and distribution tariffs unchanged for a two-year period if the requirements set out by the Russian company were met. Those tariffs comprised some 20 percent of total gas price for large-scale users and some 80 percent for smaller-scale consumers.
Lietuvos Zinios, Lietuvos Rytas, Kauno Diena

Nuclear power plant stopped through human error
The sole unit of Ignalina Nuclear Power Plant (INPP) was stopped through human error during the power switchover works on Thursday night. The second unit stopped at 9:20 p.m. Radioactive levels remained unchanged both at the facility and without, INPP has confirmed. The power plant has set up a special commission to investigate the incident. The works to start up the unit will be launched on Friday night.
The nuclear power facility, which is considered unsafe by the West, shut down its first unit on December 31, 2004, following Lithuania's pre-accession commitments to the European Union (EU). The second and the last unit are to be closed in December 2009.
INPP generated and sold 5.603 billion kWh and 5.358 billion kWh of electricity, respectively, in the first six months of 2005, a plunge of 28 percent from the year-earlier figure. For 2005 the plant is projecting the sales of some 8.5-9 billion kWh of electricity, a decline of 35 percent from the year-earlier figure of 13.917 billion kWh.
Kauno Diena, Lietuvos Rytas, Lietuvos Zinios, Respublika

Producer prices go up
Lithuanian producer prices went up by 2.3 percent in July from June and were 12.3 percent higher year-on-year, driven up by rising oil product prices, the Statistics Department said. The factors that had the biggest impact on the index were a 6.7 percent increase in refined oil product prices, a 3.3 percent increase in chemical product prices and a 0.8 percent rise in prices of foodstuffs and beverages.
Lietuvos Zinios

Friday, 5th of July

Beer market grew by 4.7 percent while beer exports increased by 47.2 percent
Major Lithuanian breweries recorded a 4.7 percent year-on-year increase to 148.99 million litres in domestic beer sales for the first seven months of this year, The beer sales in July grew by 8.5 percent year-on-year to 29.23 million litres. Svyturys-Utenos Alus held a 48.36 percent market share with beer sales for January-July rising by 4.5 percent year-on-year to 72.05 million litres. Kalnapilio-Tauro Grupe was the second with a 23.74 percent market share. Its beer sales fell by 1.5 percent year-on-year to 35.37 million litres. Ragutis raised beer sales by 7.4 percent to 16.16 million litres and had a market share of 10.85 percent. Gubernija posted a 7.8 percent rise in sales to 15.68 million litres, which gave it a market share of 10.52 percent.
Five major Lithuanian breweries exported 9.05 million litres of beer in the first seven months of this year, up 47.2 percent from 6.15 million litres a year earlier. Svyturys-Utenos Alus saw beer exports for the seven months drop by 15.3 percent year-on-year to 4 million litres. Kalnapilio-Tauro Grupe exported 2.69 million litres of beer, almost a fourfold increase compared with the same period a year ago. Gubernija's beer exports more than trebled to reach 2.14 million litres. Ragutis sold 200,000 litres of beer in foreign markets during the seven months.
Respublika, Verslo Zinios

Vilniaus Baldai boosted turnover
Vilniaus Baldai, one of Lithuania's leading furniture manufacturers, reported sales of LTL 57.559 million for the first seven months of 2005, a rise of 6.7 percent from the year-earlier figure.
The furniture manufacturer posted LTL 1.357 million in pretax earnings for the first six months of 2005, a plunge of 3.5 times from the year-earlier figure of LTL 4.735 million. Interim sales rose by 6.7 percent, year-on-year, to LTL 48.47 million in the January-to-June period. The company, which launched a new workshop earlier this year, is projecting pretax earnings of LTL 12 million on sales of LTL 120 million for 2005.
Lietuvos Zinios

Prefa enters Lithuanian market with ambitions
Tempted by the rapidly growing real estate market in the Baltic States, Prefa, an Austrian owned company that is one of the leading manufacturers of aluminium roofs and facades in Europe, has entered the Lithuanian market. The company, which in Lithuania will operate under the name of Prefa Baltics, hopes to become the leader of the market in the Baltic States in the next five years. Here, it will mainly focus on roofs of the highest quality.
"The real estate market is developing rapidly and the demand for the highest quality, innovative, durable, and architecturally attractive aluminium roofs and facades is also growing," Mika Ruotsalo, the head of Prefa Baltics, said.
Verslo Zinios

Thursday, 4th of July

Svyturys-Utenos Alus introduces new beer
Svyturio-Utenos Alus, the number one brewery in Lithuania, has said that its operational unit in Klaipeda will begin to manufacture a new brand called Svyturio-Extra Draught. The new brand will have an alcohol volume of 5.2 percent and will be bottled in 0.5-litre containers. By production technology, this beer will be similar to the currently produced draught beer Svyturio Alus that is delivered to bars and restaurants in kegs. A bottled draught beer is a novelty in the Lithuanian market: local breweries have not brewed such beer before.
Svyturio-Utenos Alus last year made net profits of LTL 65.14 million. Income stood at slightly more than LTL 300 million. The company controls about 47 percent of the Lithuanian beer market, a larger share than any other local brewery.
Lietuvos Rytas, Respublika

Sanitex will import Paulig
Paulig Lietuva, a Finnish owned importer of coffee and spices, has transferred its import operations to Sanitex, the largest wholesaler and distributor in Lithuania. After reorganization, Paulig Lietuva will become a representation of Paulig Baltic, a company of the group registered in Estonia, and it will mainly deal with marketing the products of the concern. In 2004, the turnover of Paulig Lietuva reached about LTL 20 million.
Lietuvos Rytas, Verslo Zinios

A note to Ukraine over refrigerators
Lithuania has presented a note to a representative of Ukraine's embassy as the Customs Authority of Ukraine has raised the import duty levied on refrigerators of Snaige, the sole Baltic refrigerator producer, to 25 percent unilaterally.
On Wednesday the Customs Authority of Ukraine has changed the combined nomenclature code applied to the refrigerators of the sole Baltic refrigerator producer and raised the import duty 2.5 times, to 25 percent. Ukrainian parliament earlier ruled to reduce the import duty on Snaige's refrigerators to 5 percent; however, president Viktor Yushchenko has been delaying the signing of the respective legislation.
Snaige sell over 90 percent of output on foreign markets, with Ukraine accounting for the largest share of exports.
Lietuvos Zinios. Verslo Zinios

Wednesday, 3rd of August

Income of milk processors
Rokiskio Suris, Lithuania's largest dairy group, said its first-half pretax profit fell to LTL 6.313 million, from LTL 10.585 million in the same period a year ago. A rise the price of raw milk in a year had the biggest impact on the company's profitability, the company said. The company anticipates a higher profit in the second half and are keeping to their full-year profit target of at least LTL 22.5 million. Sales for the first half rose by 8.5 percent year-on-year to LTL 210.04 million.
Lietuvos Zinios

LAL boosted the number of passengers
Lietuvos Avialinijos (Lithuanian Airlines or LAL), the national flagship carrier under privatization, carried 251,300 passengers in the first six months of 2005, a surge of 39.1 percent from the year-earlier figure. In June alone, the number of passengers carried by the company rose by 26.9 percent, year-on-year, to 64,700. Company's planes made 2,700 flights, of which 93.4 percent were regular flights. The number of passengers on regular flights surged by 32.8 percent, year-on-year, to 216,900 in the January-to-June period. Moreover, LAL made 178 charter flights, an almost twofold rise from the first half of 2004. The number of passengers on charter flights made up 34,400. In June LAL made 480 regular flights with 50,600 passengers on board, a rise of 26.8 percent from June 2004. Moreover, the company made 69 charter flights with 14,100 passengers on board. In the first six months of 2005 LAL carried 680,600 tons of cargo, a rise of 6.4 percent from the first half of last year.
The company is projecting the net earnings of LTL 3.95 million for 2005.
Lietuvos Zinios, Lietuvos Rytas

Profits of Vakaru Medienos Grupe
The pre-tax profits of the three lumber companies that belong to Vakaru Medienos Grupe amounted to LTL 4.7 million in the first half of 2005. VMG includes the companies Klaipedos Mediena, Giriu Bizonas, and Sakuona. Turnover of the group increased by 29 percent year-on-year; however, the index of net profit declined by LTL 1.07 million compared to the last year when it came in at LTL 5.78 million. This year the group expects to earn profits of about LTL 12 million and to reach sales of LTL 267.2 million.
Verslo Zinios

Tuesday, 2nd of August

South Korean company will assemble TV sets in Vilnius
DiBOSS, a South Korean-owned manufacturer of LCD televisions in Siauliai, is opening a factory in Vilnius next week. The production volume of the new company will reach about 20,000 TV sets a month. According to Dong Su Lee, the head of DiBOSS, the company expects to manufacture 7,000 TV sets in the first month, and about 15,000 in the second month. Siauliu Tauro Televizoriai, currently the only television manufacturer in Lithuania, has been manufacturing DiBOSS televisions so far. Rimantas Zukauskas, the head of Siauliu Tauro Televizoriai, said that the withdrawal of DiBOSS produces over 90,000 TV sets a month.
Lietuvos Rytas

More flights from Copenhagen to Palanga
The Scandinavian airline SAS is adding six more flights between Copenhagen and the Lithuanian seaside resort of Palanga from the beginning of September, bringing the total number of weekly flights on this route to 13. Planes will land in Palanga at 10.05 p.m. every evening, except for Saturdays and will fly to Copenhagen at 7 a.m. except for Sunday.
Lietuvos Rytas, Verslo Zinios

NORD/LB Lietuva will issue new student cards
NORD/LB Lietuva, the third largest commercial bank by assets in Lithuania, will extend and issue new student identity cards. The Lithuanian Union of Students' Representations earlier cooperated with Snoras, the fourth largest commercial bank in the country. The new student identity card will be not combined with a payment card. Snoras had earlier issued student identity card combined with the payment card eLito Card. NORD/LB Lietuva will offer students a free Visa Electron or Maestro payment card. The bank did not provide any forecast on how much it expects transactions to increase due to the increase in the number of clients.
Kauno Diena

Monday, 1st of August

Ekranas will look for alternatives
Ekranas, the troubled Lithuanian electronics company, will search for new partners to manufacture other produce. The only producer of television picture tubes in the Baltics also counts on support of the national government in anti-dumping actions, which it launched against eastern Asian rivals.
"Ekranas is now facing some hardships, but there is a possibility to win the anti-dumping action”, Economy Minister Kestutis Dauksys said.
The government should back politically the company, which is striving for an auspicious outcome of the legal proceedings, the economy minister said. Dauksys revealed that the producer and its stockholders are in quest of partners to start alternative manufacturing operations.
In efforts to protect its interests in the EU market from the invasion of cheap picture tubes, Ekranas in June submitted a claim to the European Commission. It asked to impose anti-dumping measures against Indian and South Korean producers.
In the first half of 2005, the company suffered a loss of LTL 36 million. This compares with LTL 7.5 million of net profits earned the year ago. Sales this year dropped almost 39 percent to LTL 165 million.
Kauno Diena, Verslo Zinios, Respublika

Meat processors export more production to the third countries
In the first half of 2005, Lithuanian companies exported a total of 5,570 tons of meat and meat products to the third countries, 27.4 times more since the same period last year when the exports stood at 203 tons.
”Lithuanian exporters deliver most of meat exports to Russia, or 60 percent of total exports going to third countries,” Kazimieras Lukauskas, the head of the national chief food service, said.
At this time, 55 local food companies are certified by Russia to deliver their production to that country. This figure includes 15 enterprises authorised to export meat and meat products. 7 more applicants are waiting for an official reply of Russian veterinary authorities.
Kauno Diena, Respublika

Turnover of Kaunas Alus soars
The turnover of Kaunos Alus, a brewery in Lithuania, amounted to LTL 5.2 million in the first half of 2005, a 24 percent increase year-on-year. The volume of beer sold grew 26 percent to 316,000 dekalitres. Kauno Alus, which controls over 2 percent of the Lithuanian beer market, expects to sell 620,000 dekalitres of beer in 2005, about one-fifth more than it sold in the preceding year. The brewery intends to invest up to LTL 1.1 million in modernization this year. In 2004, the company invested about LTL 1.5 million. Kaunos Alus expects to earn LTL 314,000 in profits on sales of about LTL 12 million in 2005.
Last year, the sales of the brewery amounted to LTL 10.1 million, but the company suffered a loss of LTL 274,000.
Verslo Zinios

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