Saturday, 13th of August
Kaunas looks for new investor in sports arena
The local authority of Kaunas has announced an international tender for a concession to design, build and operate the sports palace at the Nemunas island in the second largest Lithuania's city. In line with concession contract, the winning bidder will perform the works in exchange for the right to operate the complex for a 25 years period.
The palace would become a major cultural attraction and the local authority was absolutely sure that such a centre should be located at the heart of the city. The complex would be adapted for all types of sport competitions and entertainment events. The new palace would accommodate at least 12,000 spectators during basketball games. Following the expiry of 25-year term of concession, the winner of the tender will transfer the complex to the local authority free of charge in line with terms and conditions to be set out in the contract.
Yukos negotiates with Mazeikiu Nafta owners
Lithuanian Prime Minister Algirdas Brazauskas has said that the Russian oil company YUKOS is now in talks with potential buyers of its stock in the local oil refinery Mazeikiu Nafta.
"The situation is a follows: talks are going on with several companies. They are primarily negotiating not with us but with YUKOS. This stock belongs to YUKOS," Brazauskas said on Friday after he met Arturas Paulauskas, the speaker of the Seimas.
The Russian stockholder, which has 53.7-percent interest in Mazeikiu Nafta, has not announced the start of talks with buyers. But potential buyers have confirmed their interest in acquiring the oil refinery in Lithuania.
Brazauskas said that there have been no changes at this point. The prime minister affirmed that Lithuania is also raising conditions and wants the maximum benefit from this transaction.
Officials at the Lithuanian Economy Ministry have also been negotiating with YUKOS in the past few months. The parties said that they achieved a deal concerning the sale of a 10-percent option, which now belongs to the Russian company, to Lithuania.
Mistrust in insurers increases
After meeting with Seimas Chairman Arturas Paulauskas, the heads of the Insurance Supervisory Commission (ISC) decided they would not rush to make any amendments to the insurance law. Representatives of the commission said that they are not responsible for the bankruptcy of the insurance company Ingo Baltic and do not intend to resign, which Jurgis Razma, vice-chairman of the Homeland's Union group in the Seimas, had asked for.
"We have done a good job - I'm sure about that. Resignation of the commission would be the worst step, because the insurance market would be left without qualified supervision," Marius Mikalauskas, the deputy head of the ISC, said.
Together with the speaker of the Seimas, the commission decided that there would be no amendments made to the insurance law after the bankruptcy of Ingo Baltic.
This week the government formed a special commission, consisting of experts of the Economy Ministry and Finance Ministry, to investigate the causes of the bankruptcy of Ingo Baltic and to evaluate the role of the ISC.
Lietuvos Zinios, Kauno Diena
Friday, 12th of August
Profit of Lietuvos Draudimas shrank
Lietuvos Draudimas, the country's largest non-life insurance company, posted a net profit of LTL 4.4 million in the first half of this year, a drop of 37.1 percent from LTL 7 million a year earlier. Vygandas Reifonas, head of the company's Financial Planning and Treasury Management Division, said the first-half profit was brought down by claims for damages caused by a severe storm and other large claims in the first quarter. The company's second-quarter profit surged by 32 percent year-on-year to LTL 3.7 million.
"This year has been unsuccessful for all insurers due to damages resulting from natural disasters," Lietuvos Draudimas CEO Kestutis Serpytis said.
Reifonas also said that decreased investment income also had an adverse effect on the company's profitability. In the first half, interest income declined by 18.9 percent year-on-year to LTL 7.3 million due to certain changes in investment accounting principles and lower yields on securities.
Lietuvos Zinios, Lietuvos Rytas, Respublika, Verslo Zinios
Ragutis expects changes
Ragutis, the Lithuanian brewery controlled by Finland's Olvi, posted LTL 23.58 million in sales for the first six months of 2005, a rise of 20.2 percent from the year-earlier figure. The brewer's operating profit came in at LTL 0.24 million in the reporting period. For the first half of 2003 Ragutis reported LTL 0.86 million in operating losses. Volume sales by the company rose by 19.7 percent in the January-to-June period, to 16.4 million litres, from 13.7 million litres in the first half of 2004.
The authorized capital of the loss-making brewery has reached critical levels. At the end of 2004, the financial liabilities of Ragutis amounted to LTL 67.7 million, and capital stood at LTL 5.3 million.
The foreign direct investment (FDI) flow in Lithuania reached LTL 1.2 billion in the first half of this year, LTL 151.6 million lower than in the same period last year, the Bank of Lithuania reported. The net FDI flow accounted for 50.9 percent of the current account deficit in January-June. Taking into account direct investment by domestic economic entities abroad, the net FDI inflow reached LTL 245.7 million in June and amounted to LTL 1.1 billion in the first half of the year.
Thursday, 11th of August
LAL buyers will pay LTL 25 million
LAL Investiciju Valdymas (LAL Investment Management), a company controlled by the information technology firm Fima and its partners, is to pay LTL 25.578 million for the state's 100 percent stake in Lietuvos Avialinijos (Lithuanian Airlines, or LAL). The State Property Fund (SPF) signed an agreement on the sale of the national air carrier to LAL Investiciju Valdymas, which was established specifically to bid for the stake, on Wednesday. Vaidas Barakauskas, president of Fima, said that the new owners plan to invest LTL 20-30 million in LAL over two years: LTL 10 million in its stock capital, LTL 10 million in working capital and the rest for other needs.
Fima holds a 70 percent stake in LAL Investiciju Valdymas. Its financial partners in the airline's privatization are the investment company ZIA Valda and the construction firm Garantas. Fima intends to take on more partners to manage LAL, including the Vilnius-based private air carrier Aurela and the Turkish-owned tour operator Tez Tour.
Lietuvos Rytas, Verslo Zinios, Respublika, Lietuvos Zinios
Lithuanian insurance brokers signed 281,964 policies in the first half of 2005. 97.8 percent of these policies were for non-life insurance. According to the preliminary data compiled by the Insurance Supervisory Commission, domestic insurance brokers signed 14.8 percent of non-life insurance policies and 24.8 percent of life insurance policies. In January-June, the income of domestic insurance brokers exceeded LTL 27.1 million.
Turnover of Lifosa grows
Lifosa, the largest phosphate fertilizer manufacturer in the Baltics, said sales for the first seven months of this year reached LTL 341.63 million, rising by 16.3 percent from the same period a year ago. Sales for July jumped by 38.2 percent year-on-year to LTL 70.124 million. Lifosa CFO Regvita Ivanoviene said the revenue growth was due primarily to rising prices for fertilizers.
For the seven months, sales of diammonium phosphate fertilizers, Lifosa's main product, increased by 3.8 percent year-on-year to 433,000 tons. In July alone, sales were up 20.9 percent to 84,000 tons. The company expects to sell around 760,000 tons of diammonium phosphate fertilizers this year, a rise of 2.7 from 740,000 tons last year.
The fertilizer manufacturer posted a net profit of LTL 38.36 million for the first half of this year, more than a 12-fold increase from a year earlier.
Lietuvos Zinios, Verslo Zinios
Wednesday, 10th of August
More guests in farmsteads
Country houses offering rural tourism services in Lithuania attracted a total of 103,800 visitors during the first seven months of this year, up 18.6 percent from 87,500 visitors a year earlier. In July the total number of guests soared by 33 percent year-on-year to 47,600. The Aukstaitija region, in the central and eastern part of Lithuania, boasted the largest number of holiday-makers, at 16,300, in July, followed by the western region of Zemaitija with 14,800 visitors, the south-eastern region of Dzukija with 11,700 and the south-western region of Suvalkija with 4,800.
Total guest numbers rose by 19.8 percent to 196,600 last year. According to data from the Bank of Lithuania the country received LTL 2.273 billion in revenue from incoming tourism last year, 17 percent more than in 2003.
Verslo Zinios, Lietuvos Rytas, Respublika, Lietuvos Zinios
Exports close on imports
Lithuanian exports grew by 24.2 percent in the first half of this year from a year earlier, while imports rose by 18.4 percent. The foreign trade deficit widened by 2.5 percent year-on-year to LTL 4.314 billion. First-half exports reached LTL 14.452 billion, while imports totalled LTL 18.766 billion, according to non-final data based on customs declarations and Intrastat reports.
Exports increased by 10.9 percent and imports were 17.2 percent higher in June from the same period a year ago. In June versus May, exports dropped by 8.2 percent and imports went down by 7.1 percent.
The country's biggest export partner was Russia with 10.8 percent of total exports, followed by Germany with 9.5 percent, Latvia with 9.1 percent, France with 7.4 percent and Estonia with 5.9 percent.
Russia also topped the import rankings, accounting for 28.4 percent of total imports. Also on the list of major import partners was Germany with 14.9 percent, Poland with 7.8 percent, the Netherlands with 4 percent and Latvia with 3.6 percent.
Lietuvos Zinios, Lietuvos Rytas
EUR 300 million for PTA plant
Nemuno Banga Group (NBG), Lithuania's leading producer of plastic packaging, and Interquisa, a subsidiary of the Spanish oil and energy group CEPSA, are planning to invest EUR 250-300 million in a new PTA plant in Lithuania. The new plant is expected to become one of the main producers of PTA, a key raw material in the manufacturing of polyethylene terephthalate (PET), in Europe. It will be located in the Klaipeda Free Economic Zone, where NBG is building two PET plants.
PTA plant is scheduled to begin commercial production in the first quarter of 2008. The plant, with an annual capacity of 600,000 tons, will create 400 to 500 new jobs.
PTA plant in Klaipeda will provide the new capacity required to meet the growing demand for PET in Europe and CIS countries, including Russia.
NBG posted sales of LTL 330 million in 2003. It supplies around 65 percent of its products to western and central Europe and 30 percent to the Russian market.
Verslo Zinios, Lietuvos Rytas
Tuesday, 9th of August
QPET bottles stimulate exports
Kalnapilio-Tauro Grupe, Lithuania's second-biggest brewery, has started exporting its Tauras Ekstra beer to Spain this summer. The company, which is owned by Denmark's Royal Unibrew, said it was able to expand its beer exports thanks to new generation, one-litre Quality PET (QPET) bottles.
"QPET bottles help to preserve the unique qualities of beer, keep it fresh for a longer time and extend warranty periods. This has given a boost to Tauras beer exports," Algis Atkociunas, technical director at Kalnapilio-Tauro Grupe, said.
He said that the company plans to export Tauras beer to Spain in larger quantities and on a regular basis in the future. Tauras Extra in QPET bottles is now only distributed in the Valencia Region.
Kalnapilio-Tauro Grupe also exports beer to Latvia, Poland, Britain, Russia, Denmark, the US and Italy. Its total exports reached 2.69 million litres of beer in the first seven months of this year, more than a fivefold increase compared with the same period a year ago.
Verslo Zinios, Lietuvos Rytas
Stumbras is the leader of alcohol exports
Stumbras, the largest Lithuania's spirits producer controlled by private MG Baltic concern, exported 870,000 litres of spirits, mostly vodka and liquors, in the first six months of 2005, a threefold surge from the year earlier figure of 281,000 litres.
"Currently the key destinations for our exports include the US, Israel, Poland, Latvia, other neighbouring countries. We intend to boost the exports even further because we need to expand our business abroad if we want to continue development," Ceslovas Matulevicius, Stumbras' CEO, said.
The six-month exports by Stumbras exceeded the exports of other three major Lithuania's distilleries taken together. According to the Association of Lithuania's Food Industry, which lists all major domestic distilleries as its members, the exports by Alita, Vilniaus Degtine and Anyksciu Vynas stood at 271,000 litres, 48,000 litres and 517,000 litres of spirits, respectively, in the first half of 2005.
Verslo Zinios, Lietuvos Zinios, Respublika
People will have to look for new insurer
On Monday the Insurance Supervisory Commission (ISC) decided to initiate bankruptcy proceedings against Ingo Baltic, a Russian owned non-life insurance company. Marijus Juris Mikalauskas, the chairman of the commission, said that the bankruptcy proceedings are to be initiated due to the poor financial situation of the insurance company. The nearly 100,000 clients of the company will suffer the most.
"I would suggest that the clients of Ingo Baltic do not delay or hope, but rather look for another insurance company," Mikalauskas said.
The ISC annulled the licence of Ingo Baltic on July 13. The commission took this step after the main shareholders did not respond to the request of the commission to increase authorized capital to LTL 18 million.
Respublika, Lietuvos Rytas, Kauno Diena, Verslo Zinios
Monday, 8th of August
Lietuvos Gelezinkeliai seeks LTL 256 million EU assistance
Lietuvos Gelezinkeliai, the state-run railway operator, expects to get LTL 217.5 million assistance from the EU Cohesion Fund. The Ministry of Finance has said it would submit to the European Commission (EC) applications for two investment projects of Lietuvos Gelezinkeliai, which are expected to get funding from the EU Cohesion Fund. Total value of two projects stands at LTL 255.9 million. One of the projects deals with the upgrade of railway radio communication system. The total value of the project makes up LTL 208.9 million, of which LTL 177.5 million should be the assistance from the Cohesion Fund and LTL 31.4 million - allocations from the national budget.
The second project dealing with the extension of station roads within the IX transport corridor is valued at LTL 47 million, including LTL 40 million in Cohesion Fund assistance, LTL 6 million in contribution from the national budget and LTL 1 million in own funds of the railway operator.
Respublika, Lietuvos Zinios
EUR 33.1 million for wastewater projects
A combined assistance of EUR 33.1 million has been endorsed for the investment project of the basin of the Nemunas River in Lithuania. The national government and the Cohesion Fund of the EU will co-finance this project. The fund is expected to give 85 percent, or EUR 28.1 million, of the total amount. The national budget will contribute EUR 4.9 million. The funds will be used to build and renovate wastewater and other treatment facilities in the upper reaches of the Nemunas River. Officials say that the residents of Birstonas, Druskininkai, Elektrenai and other areas should feel the advantage of the new facilities. The upgrading of the water system on the Nemunas River is to be completed by the close of 2009.
The Cohesion Fund has so far allocated assistance to 12 projects for water treatment, 9 projects for management of household waste and one project for hazardous waste. These measures are worth a total of 398 million euros.
Respublika, Lietuvos Zinios
Tender for despite in Kazokiskes was announced
Despite protests, the Environmental Projects Management Agency has announced a tender for the construction of a dump near the settlement of Kazokiskes. The bids for the tender must be admitted by September 30, 2005. The Vilnius District Waste Management Centre (VDWMC) is the contracting authority.
According to Jurijus Valiunas, the head of VDWMC, the construction of the dump should start in November. SRP Schneider und Partner, the German owned company would perform the technical management of the project. The total value of the dump project stands at about LTL 27 million. EU Structural Funds will cover 65 percent of the sum, another 14 percent of the funds come from the state budget, and VDWMC will take a loan for the remaining 36 percent of the necessary sum.
The dump in Kazokiskes, which should be opened at the end of 2006 or the beginning of 2007, will replace all the other dumps in the district of Vilnius.
Respublika, Verslo Zinios
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