Observer "Lietuva"

WEEK 44.2005

Saturday, 5th of November

Unemployment in Lithuania down to 3.9 percent
With temporary labour emigration from Lithuania showing no signs of abatement, the jobless rate in Lithuania declined by further 0.2 percentage points from September, to hit 3.9 percent in October. Compared with the year-earlier figure, the unemployment rate in the country plunged by 2.1 points. The number of officially registered unemployed people was 82,200 as of Nov. 1 of this year, the Labour Exchange has reported. Compared with previous month, the number of registered unemployed declined by 3.9 percent or 3,400 jobless persons, while the annual plunge was 34.8 percent or 43,900 unemployed people. Regional labour exchange offices registered 19,300 vacancies in October, a drop of 4.7 percent from the month-earlier figure. The jobless rate was 6.9 percent in Lithuania in 2004.
Lietuvos Rytas, Lietuvos Zinios, Respublika

European Commission praises Lithuania
With less than a year to go until the decision to accept some of the EU newcomers into the euro zone is potentially made, Lithuania, Estonia, Slovakia and Slovenia have achieved the greatest progress in making practical preparations to introduce the single EU currency.
However, Estonia and Lithuania, which aim at introducing the euro as of the start of 2007, have to accelerate the preparations for the introduction and to settle the unease in the population that the introduction of the euro might lead to an increase in the prices in some of the sectors, the European Commission says in its second report on practical preparedness for euro introduction in the new member states.
Kauno Diena

Rautakirja to reorganise press distribution businesses in Lithuania
The Finnish company Rautakirja has announced than it intends to separate its magazine and newspaper distribution business from its kiosk business. The firm also confirmed that it is buying Lietuvos Spauda. The Finnish group is acting on the request of the Lithuanian Competition Council to divide the two businesses. The authority therefore requested Rautakirja to transform the press distribution business into two separate companies.
Lietuvos Rytas, Respublika

Friday, 4th of November

H&M tops list of Lithuania's Utenos Trikotazas customers
Sweden's Hennes and Mauritz (H&M), the owner of the largest global chain of clothing stores, has topped the list of customers of Utenos Trikotazas, the largest Lithuania's knitwear producer controlled by SBA concern. The sales of Utenos Trikotazas to H&M comprised 16 percent of total nine-month sales or over LTL 21 million.
"The customer portfolio of Utenos Trikotazas shows over 10 buyers, each of which accounts for 3-12 percent of total turnover. In the company's opinion, its order portfolio is well-diversified and safe as the producer would not face any greater problems with the withdrawal of any of its customers," Gintare Mierkiene, SBA marketing and PR director, said.
Earlier this year, Utenos Trikotazas was approached by well-known UK chains Marks & Spencer and Next. The Lithuanian knitwear producer channels over 90 percent of its output for exports, mostly to the EU markets. The Utena-based knitwear producer, which has been fighting competition with cheap Asian products successfully this year, reported LTL 10.313 million in net earnings for the first nine months of 2005, a decline of 5.4 percent from the year-earlier figure, and exceeded the full-year net profit target.
Lietuvos Rytas

Achema lifts sales to EUR 197 million
Lithuanian nitrogen fertilizer and chemical product manufacturer Achema said its sales for the nine months soared almost 50 percent to LTL 685 million, up from LTL 454 million in the same period last year. Achema CEO Jonas Sirvydis attributed the strong growth to increased export prices and volumes. The company's export revenue reached LTL 573.8 million in the nine months of this year, up 54 percent from LTL 372.6 million a year earlier. Domestic sales went up by 21.3 percent to LTL 93 million, up from LTL 76.7 million a year ago. The company posted a pretax profit of LTL 23 million for the first half of this year, a fourfold increase from LTL 5.7 million a year earlier. First-half sales surged by 52.8 percent to LTL 451.5 million, of which exports accounted for 82.2 percent.
Lietuvos Zinios

Ekranas asks for anti-dumping measures
Ekranas, the only manufacturer of television picture tubes in the Baltic States, has submitted one more complaint to the European Commission (EC) about rivals from Latin America and Southeast Asia dumping products on the European market. The complaint dated October 24 was submitted against manufacturers of colour picture tubes from Brazil, China, Malaysia, Mexico, South Korea, and Thailand, the operational report of Ekranas indicates. In June 2005, Ekranas complained to EC about the unfair competition of manufacturers of 14-inch picture tubes from India and South Korea. The anti-dumping cases present the only opportunity for loss-making Ekranas to survive. In the first three quarters of this year, the plant carried a loss of LTL 60.7 million.
Lietuvos Zinios

Thursday, 3rd of November

All VP Market stores will renamed into Maxima
VP Market, the Baltics leading operator of retail stores, has aired plans to reorganise all supermarkets of the company in Lithuania into Maxima brand stores. The group has said that it will spend LTL 10 million for this project. VP Market is now operating supermarkets under the brand names of Minima, Mini Maxima and Media. The reorganisation should be completed until next spring. It said that more than 30 supermarkets have been reorganised by this time. The decision to convert all supermarkets of the company into Maxima brand stores came as a result of market research.
VP Market has 195 outlets in the domestic market, also 95 supermarkets in Latvia, 22 supermarkets in Estonia, 8 outlets in Romania, and 8 outlets in Bulgaria.
Kauno Diena, Lietuvos Zinios, Lietuvos Rytas, Respublika, Verslo Zinios

Lukoil Baltija reached LTL 1 billion in sales
Lukoil Baltija, the leading gasoline trader active in the Baltic countries and neighbouring Belarus, reported LTL 1.055 billion in sales for the first nine months of 2005, a rise of 20.3 percent from the year-earlier figure of LTL 877 million. The company is projecting its full-year sales to reach LTL 1.4 billion in 2005, representing some 14 percent rise from the 2004 figure of LTL 1.23 billion. Lukoil Baltija operates the largest Lithuania's chain of filling stations that covers the network of 114 outlets. Respublika, Lietuvos Rytas

Lithuania lags behind Latvia and Estonia in terms of FDI
Lithuania stands behind the other two Baltic States by the flow foreign direct investments. In the second quarter of this year, the ratio of foreign direct investments to gross domestic product in Lithuania was eight times lower than it was in Latvia and 133 times lower than it was in Estonia. In this period, foreign direct investments accounted for 0.3 percent of GDP in Lithuania, 2.4 percent in Latvia, and 39.8 percent in Estonia. Although Lithuania is larger than her two neighbours, it lags behind by the absolute figure of this type of investment. In the second quarter, the flow of direct foreign investment in Lithuania was EUR 14.6 million, whereas it amounted to EUR 1.086 billion in Estonia and EUR 74.1 million in Latvia.
Kauno Diena

Wednesday, 2nd of November

More refrigerators
Snaige, the only producer of household refrigerators in the Baltic States, which has plants in Alytus and Kaliningrad, said its consolidated net earnings made up LTL 25.7 million in the first nine months of the year, a drop of 4.5 percent year on year. However, the income of the manufacture went up 22.1 percent from LTL 228.8 million to LTL 279.4 million. The consolidated profit sum decreased because of the price hike for raw materials and bigger than previous year duty fee in the Ukraine. According to earlier reports, Snaige expected its sales to form LTL 441 million and pre-tax profits to stand at LTL 26.4 million in 2005.
Lietuvos Zinios

Lower profit of milk processors
Zemaitijos Pienas, number three dairy group in Lithuania by sales, reported a LTL 3.2 million pre-audited net profit in January-September of 2005, 2.8 times lower sum compared to nine months in 2004. The consolidated income of the group grew 7.8 percent in the three quarters this year, to make up LTL 279.3 million. The company posted a LTL 11.19 million net profit last year, while income amounted to LTL 338.974 million.
Lietuvos Zinios

Profit of power grid
VST, the operator of the western part of the Lithuanian national power grid, reported a net profit of LTL 21.9 million for the first nine months of 2005. In the third quarter alone, the net earnings accounted under the International Accounting Standards (IAS) made up LTL 7 million. The unaudited net earnings of VST came in at LTL 1.288 million in the January-to-September period of 2004, yet the results are not comparable owing to the switch to IAS from 2005.
Lietuvos Zinios

Monday, 31st of October

Geonafta plans to operate in Kazakhstan
With Lithuania's oil wells running dry, Geonafta, the leading domestic oil producer, is entering the oil production market in Kazakhstan. Naftainvest, a Kazakh subsidiary of Geonafta, has submitted a bid to participate in a tender on oil surveillance and production in the Aktyubinsk Region, Western Kazakhstan. The surveillance area as set out in the tender dossier covers over 3,000 square kilometres. According to expert estimations, the area may have up to 2 million tons in oil reserves. Last year the company concluded a contract with a Kalmyk company, which offered Geonafta and opportunity to operate oil-drilling works at the licensed area of Ketchenerovsky. Moreover, earlier Geonafta revealed its intentions to launch oil drilling in Hungary, yet later it shun from both these projects due to high risks.
Lietuvos Zinios

Construction prices go up
Construction prices in Lithuania rose by 1.3 percent in September from August and were up 7.5 percent compared with the same period a year ago, the Statistics Department said. In September versus August, wages and overhead costs increased by 2.8 percent, and prices for construction materials and products were up 0.3 percent. The per-hour cost of construction equipment operation grew by 1.3 percent. Respublika

Sales of Senukai increase
Senuku Prekybos Centras, the largest retailer of construction materials and household supplies in the Baltic States, generated income of LTL 732 million in January-September 2005, an increase of 18.6 percent year-on-year.

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