Observer "Lietuva"

WEEK 38.2005

Saturday, 24th of September

Achema to invest additional LTL 0.5 billion
Achema, a producer of fertilisers and chemical products from Jonava, has launched the second stage of its investment program, during which the company intends to invest LTL 500 million by the end of 2008. When this investment program is completed, the production of Achema, which is a part of the concern Achemos Grupe, will grow two-fold. The investment program is financed by commercial banks Nordea, SEB Vilniaus Bankas, NORD/LB and Kredyt Bank.
In 2005, Achema expects to generate income of about LTL 825 million. The sales estimate of the firm stands at LTL 1.3 billion in 2009.
Respublika, Lietuvos Zinios

Agricultural production prices grew
Purchase prices for agricultural products in Lithuania went up 18.4 percent year on year in August 2005. The increase resulted mainly from growing prices for plant and animal products, 26.4 and 9.5 percent respectively, the Statistics Department reported on Friday. In the preceding twelve months, the prices for crops and plants dropped 11.6 and 7.5 percent correspondingly; meanwhile prices for potatoes, other vegetables and fruit grew 93, 10.1, and 5.1 percent respectively. According to the report, an increase in cattle prices constituted 34.8 percent, but prices for pigs went down 1 percent. The prices for fowls went down 4.8 percent. At the same time, prices for milk and eggs increased 9.8 and 1.1 percent correspondingly.
Lietuvod Zinios

Stumbras to spin biofuel plant off
Stumbras, a Kaunas-based Lithuanian distillery, whose holder is the domestic concern MG Baltic, has revealed plans to spin a biofuel plant off from the company. Biofuture will have an authorised capital of LTL 119 million; Stumbras will accordingly reduce its capital to LTL 39.7 million. Investments in the biofuel plant in Silute reached more than LTL 10 million in 2003-2004. The company this year projected an ethanol output of 8,000 tons.
Lietuvos Rytas

Friday, 23rd of September

Estonians invest into metal industry in Lithuania
Estonian concern BLRT Grupp has announced that it has met all obligations undertaken in the privatisation of Vakaru Laivu Gamykla (VLG), a business group in Lithuania. The overseas investor has indicated that it injected LTL 80 million in VLG during the past three years. On Thursday, VLG presented its subsidiary Vakaru Metalgama, investments in which have added to some LTL 26 million. Vakaru Metalgama is a specialised metal manufacturing company that focuses on cutting, cleaning and priming of metal sheets. The annual output capacity of this plant is 100,000 tons.
In the first seven months of 2005, his enterprise posted an income of LTL 5.3 million. The producer handles deliveries to Russia, Estonia, Latvia, and inside Lithuania. The group of Vakaru Laivu Gamykla consists of twenty companies that employ a total of 1,400 workers. Its six-month combined sales in 2005 grew 47 percent year-on-year to LTL 65.3 million.
Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios

Member of EC applauds Lithuania
Dalia Grybauskaite, member of the European Commission in charge of the European Union's budget and finance, has praised Lithuania's administrative capabilities to apply EU support. The member of the European Commission, who presented a statement on the EU's 2004 budget on Thursday, said that its administrative capabilities had allowed Lithuania more support than planned. In 2004, Lithuania paid a total of EUR 119 million into the EU's budget and received EUR 487 million from the budget, which is EUR 368 million euros. In aggregate, the ten new member states of the EU have received 2.9 billion euros more than they had contributed to the EU's budget.
However, the commissioner is worried about the delay in achieving an agreement on the 2007-2017 EU financial prospects that provide for limits of spending in the EU's budget.
"They should have agreed on the financial prospects yesterday. Now every passing day brings additional risk that the EU's newcomers may not receive material financial injections on time, which may result in grievous consequences for the economy of those states," Grybauskaite said.
Lietuvos Zinios, Respublika, Lietuvos Rytas, Kauno Diena, Verslo Zinios

Ryanair kicks off operations in Lithuania
A Boeing 373 800 of the Irish low-cost airline Ryanair on Thursday evening will carry to Kaunas the first 189 passengers from London. Twenty-five minutes later, the aircraft will take off from Kaunas to return to London. From now on, it will be a regular daily flight. A single ticket will cost EUR 40.
Karl Hogstadius, the vice-director of Ryanair for the Nordic and Baltic regions, says that more than 17,000 tickets have been booked for this route in next two months. This low-fare airline hopes to fly 100,000 passengers during a year. The pricing of the company is based on the time of booking - the sooner customers book tickets the less they pay. During certain campaigns, passengers will pay nothing except an airport fee.
In the future, Ryanair has plans to extend its geography of flights from Kaunas to three more routes between Lithuania and other European countries.
Respublika, Lietuvos Zinios, Kauno Diena

Thursday, 22nd of September

Belgians evaluated Kalnapilis
Four beer brands produced by Kalnapilio-Tauro Grupe, one of the leading Lithuanian breweries, won Superior Taste Awards of the Brussels-based International Taste & Quality Institute in an annual competition.
The brewery was awarded for Kalnapilis Original, Kalnapilis Grand, Kalnapilis Black and Kalnapilis 7:30 brands.
"These awards mean additional criteria for most residents of Western European states as they choose a product, and an important rationale for producers searching for new markets and trade partners," Valdas Tekorius, the head of Kalnapilio-Tauro Grupe, said.
Lietuvos Rytas

Sales of Rokiskio Suris increase
Rokiskio Suris, Lithuania's largest dairy group, reported sales of LTL 282,144 million for the first eight months of 2005, a rise of 1.8 percent from the year-earlier figure of LTL 277.112 million. The Rokiskis-based dairy group exports some 65 percent of its output, mostly to the European Union (EU) countries and Russia. Several days ago the company concluded a contract with Italy's Anguili, which will supply Lithuania-made cheese to the shopping centres in Italy.
Lietuvos Rytas

Snoras acquired Latvijas Krajbanka
Lithuanian fourth largest commercial bank Snoras has bought 83.01 percent of the stock of Latvijas Krajbanka, a commercial bank in Latvia, in a move to expand beyond the saturated domestic market. After this deal, Snoras will be the only Lithuanian commercial bank owning a subsidiary in Latvia. Latvijas Krajbanka, with a large network of service units, is the oldest bank in the country.
"There is a confidentiality arrangement about the price. We are buying a stake that gives us full control of the bank”, Raimondas Baranauskas, the chairman of Snoras, said to ELTA.
The capitalisation of the Latvian commercial bank now amounts to more than LTL 215 million. The market value of Snoras stands at almost LTL 920 million.
The Lithuanian buyer announced that it would not change the name of Latvijas Krajbanka.
Respublika, Lietuvos Rytas, Lietuvos Zinios, Verslo Zinios

Wednesday, 21st of September

Companies were more profitable
The aggregate pretax profits of Lithuanian companies reached LTL 1.8 billion in the second quarter of this year, rising by one-third from the same period a year ago. Profits in the construction and communications sectors almost doubled, while profits in the hotel and restaurant sector nearly trebled. The energy sector ended the second quarter in the red, but the losses were ten times lower than a year earlier. The combined second-quarter revenues of Lithuanian companies rose by 17 percent year-on-year to LTL 29 billion. Revenues in the services sector grew at a faster rate than those of the manufacturing sector and comprised more than 57 percent of the total. The percentage of profitable companies increased to 68 percent, compared with 58 percent in the first quarter of last year and 66 percent in the second quarter of last year.
Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios

LAL trademark is flyLAL
Lietuvos Avialinijos (LAL), the Lithuanian Airlines, which has been lately sold to a domestic owner, will keep its old name but will carry operations under flyLAL trademark. At a news conference Tuesday, heads of LAL also reported that it reorganised flight service operations and a ticket sale office into two separate companies. LAL Investiciju Valdymas will control the stock of both firms, called Baltic Ground Services and Bilietu Platinimo Centras respectively.
The airline will aim at the low-cost sector and continue to focus on cooperation with other air companies and the firms dealing with charter flights. LAL, which launched charter flights from Latvia and Estonia this year, intends to start regular flights from Riga and Tallinn in the summer of 2006.
"Our goal is to modernize the company and expand the operations in the neighbouring regions," Vaidas Barakauskas, one of the main shareholders of LAL Investiciju Valdymas, said.
In the preceding year, LAL suffered a loss of LTL 9.04 million due to booming fuel prices, intensive expansion and revaluation of assets.
Respublika, Lietuvos Rytas

Lithuanian Railways to boost tariffs
Lietuvos Gelezinkeliai, the state-run railway operator, has announced the raising of cargo conveyance tariffs through Lithuania's territory in the direction of Kaliningrad and Klaipeda from mid-October. Experts warn, however, that such a measure might be detrimental to the competitiveness of the port of Klaipeda, which might find itself the loser in the competitive battle with other Baltic Sea ports.
The conveyance of cargo in the direction of Klaipeda alone brought in the losses of LTL 11 million for the company last year.
Latvia's railways operator raised its respective rate by 20 percent, while the operator in Belarus boosted the rate by 12 percent and, for some types of cargo, as much as twice.
Verslo Zinios

Tuesday, 20th of September

Partners from abroad are trumps of Lukoil
The US oil giant ConocoPhillips and its Russian partner Lukoil have confirmed their interest in buying a 53.7 percent stake in Mazeikiu Nafta, the only crude refinery in the Baltics, from Yukos, the crippled Russian oil company. The investors are also interested in the possibility of buying additional shares in Mazeikiu Nafta from the Lithuanian government. ConocoPhillips was not holding any talks with Yukos yet.
Andrei Gaidamaka, deputy vice-president for strategic development at Lukoil, which is currently the biggest supplier of crude to Mazeikiu Nafta, said that they wanted to find out during the meeting what stake in the refinery the government was planning to sell.
The government currently holds a 40.66 percent stake in Mazeikiu Nafta.
The government itself considers purchasing Yukos' stake in Mazeikiu Nafta and then selling it along with some of the shares it owns now.
Lietuvos Zinios, Kauno Diena, Respublika, Lietuvos Rytas

Profit of Grigiskes
Grigiskes, Lithuania's leading hardboard and toilet paper producer, said its pretax profit for the first eight months of this year rose by 3.4 percent year-on-year to LTL 5.486 million as sales went up by 5.3 percent to LTL 67.047 million. Pretax earnings reached LTL 622,000 last month, a drop of 29 percent from the same period a year ago. The paper manufacturer is projecting a pretax profit of LTL 8.02 million on sales of LTL 109 million for the full year 2005.
Lietuvos Zinios

Kaunas-based distillery is the leader
Stumbras, the largest alcohol producer in Lithuania, reports that by vodka sales the company is the leading player in the markets of three Baltic States. According to ACNielsen, a market research company, Stumbras controlled 20 percent of the Baltic markets in January-August 2005. Vodka brands manufactured by the main rivals of the Lithuanian distillery in Latvia and Estonia - Latvijas Balzams and Liviko - each occupied 16 percent of the market.
"This year, the investment in the quality of the vodka alone amounted to about LTL 1.5 million. We intend to invest a similar sum next year, too," Ceslovas Matulevicius, the head of Stumbras, said.
Stumbras reported that, in terms of sales, Originali Lietuviska Degtine, the most popular vodka brand of the company, seized 12 percent of the Baltic market.
Lietuvos Zinios

Monday, 19th of September

Spurt of Satrija
Lithuanian garment producer Satrija, controlled by multi-business group SBA, reported LTL 26.123 million in sales for the first eight months of 2005, a rise of 15.6 percent from the year-earlier figure of LTL 22.594 million.
Aida Zigmantaviciene, Satrija CEO, said that the number of customers preferring the purchase of company's products made in accordance with customers' designs to the sewing services alone was on the rise.
Satrija is projecting the sales of approximately LTL 40 million for full 2005.
Verslo Zinios

Loan for water park
SEB Vilniaus Bankas, the leading domestic commercial bank, is lending LTL 37 million to Rubicon Group to build a new water amusement park in Vilnius. Rubicon Group is going to invest in the water park of 13,500 square metres a total of LTL 54 million. A complex of 15 water amusements and baths is to be constructed.
Lietuvos Rytas, Respublika

Lithuanian clothes will be sold via internet
Vilnius-based clothes producer Roze, which has installed a complex computer company management and stocktaking system, will be the first Lithuania’s garment company to provide B2B service and start wholesales of its production for big clients via internet. In the future, private clients will be able to purchase production of Roze for favourable price in an upgraded e-store, too. Business clients will be able to see garment collections and order them online, while suppliers will be able to present their proposals after seeing the collections and the used materials in internet.
Lietuvos Rytas

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