||Lithuania Business News: Archive 2003-2006
Saturday, 17th of June
Snaige to invest EUR 9 million in new-design fridges
Snaige, household refrigerator manufacturer, intends to invest a total of LTL 30.6 million in the production of new, technologically more advanced refrigerators as part of its 2004-2007 investment program.
Snaige CEO Mindaugas Sestokas said the company would resume production at its plant in Alytus, in southern Lithuania, on Monday after a two-week shutdown for installation of new state-of-the art electrical equipment and other reconstruction work in preparation for manufacturing of new refrigerators.
Snaige is planning to install a new refrigerator production line in October, with mass production slated to start in the first quarter next year.
Lietuvos Zinios, Lietuvos Rytas
Akmenes Cementas soars 52 percent
Akmenes Cementas, Lithuania's only cement manufacturer, posted LTL 48.8 million in sales for the first five months of 2006, a surge of 52 percent from the year-earlier figure of LTL 32.03 million.
"The reason of growth has been the same for several months - particularly strong rise in cement sales on domestic market," Arturas Zaremba, Akmenes Cementas CEO, said.
Sales of Anyksciu Vynas up
Lithuanian alcoholic drink producer Anyksciu Vynas posted a net profit of LTL 123,000 for the first five months of this year, on sales of around LTL 11.5 million. The company reported that its net profit for May reached LTL 226,000 as sales went up by 11 percent year-on-year to LTL 2.576 million. The drinks producer posted an annual net profit of LTL 2.426 million last year, returning to profit after a long period of losses.
Friday, 16th of June
Latvia's insurer Baltikums seeks to set up branch office in Lithuania
Latvia's insurer Baltikums aims to set up a branch office in Lithuania. The new branch, which obtained the approval of Lithuania's Insurance Supervisory Commission on Thursday, would render the services not offered by Baltikums Draudimas, the Lithuanian non-life insurer that is a part of Baltikums group.
"Latvia's company is coming to the market with its own portfolio of services that are being rendered successfully in Latvia and Estonia. These are the insurance of ships and other services," Erdvilas Alisauskas, Baltikums Draudimas deputy CEO, said.
He dismissed market rumours that Latvia's Baltikums sought to take over the portfolio and liabilities of Lithuania's Baltikums Draudimas. Baltikums Draudimas posted LTL 2.988 million in losses for full 2005, a surge of 4.1 times versus the year earlier losses of LTL 717,600.
Number of minimum wage earners in Lithuania falls to 17.3 percent
The percentage of the Lithuanian working population earning minimum monthly salaries or less reached 17.3 percent last October, down 2.7 percent from a year earlier. Almost half of the minimum salary earners had part time jobs. Among people with full-time jobs, the percentage of those earning more than LTL 1,000 monthly rose from 49.3 percent to 56.1 percent. The percentage was 66.6 percent for the public sector and 49 percent for the private sector.
Currently, the minimum monthly salary in Lithuania is LTL 550, with the exception of state politicians, judges, public officers, the military and civil servants, for whom the minimum monthly rate is LTL 430.
Respublika, Verslo Zinios
Private pension funds rake in additional LTL 121.227 million from social insurance fund
Sodra, Lithuanian state social insurance fund, has transferred LTL 121.227 million to private pension fund managers on Thursday. Compared with the March instalment, the amount rose by LTL 37.6 million. The amount transferred far exceeds previous amounts, as the contribution to funds was raised to 4.5 percent, from 3.5 percent of salary, early in 2006.
The private 2nd pillar pension funds run by Hansabankas and SEB Vilniaus Bankas obtained LTL 50.6 million and LTL 38.195 million, respectively. The funds transferred to DnB Nord made up LTL 7.819 million.
Thursday, 15th of June
McDonalds is not very popular in Lithuania
McDonalds celebrates the sixth anniversary of operation in Lithuania. During this period only six McDonald restaurants have been opened in the country. Lithuanians have not taken liking to the fast food. The most popular dishes offered by McDonald are French fries and Big Mac hamburgers sales of the latter product amounted to 334 thousand units last year.
Meanwhile the Lithuanian catering chain Cilija has opened 36 restaurants in nine years. Mindaugas Gumauskas, director of Cilija Marketing Department, says that Lithuanians choice is preconditioned by nourishment habits and understanding of food culture.
Stumbras plans investments
Lithuania's largest alcoholic beverage producer Stumbras is planning to invest some LTL 6 million (EUR 1.7 million) in production this year.
The CEO of Stumbras Ceslovas Matulevicius said they money would be spent by the end of June on the acquisition of new equipment.
The alcoholic drink producer, which is controlled by MG Baltic, one of Lithuania's largest business conglomerates, invested almost LTL 13 million in production last year.
Matulevicius said the company was successfully expanding in its priority export markets Poland, Latvia and Estonia.
Verslo Zinios, Kauno Diena, Lietuvos Rytas
LAL seeks for strategic partnership with Saab
Lietuvos Avialinijos (Lithuanian Airlines or LAL), the largest Lithuania's air carrier, has opted for strategic partnership with Sweden's Saab as it seeks to expand its flight geography.
"LAL is expanding its aircraft park and introduces new routes, making use of Saab services. We do not intend to search for any other planes on the market," Arunas Griskenas, CEO of LAL, said.
Saab appreciated long-standing cooperation with LAL, said Dag Waldenstrom, vice-president of Saab Aircraft Leasing.
The owners of the company that organizes flights under flyLAL brand continue negotiations with the Swedish company FlyMeEurope on sales of a 33 percent stake in LAL.
Wednesday, 14th of June
Plaza to buy 76 percent of Drobe
Lithuania's Plaza Corporation is buying a 76.35 percent stake in the local manufacturer of pure wool and wool blend fabrics Drobe. Plaza said on Tuesday that it had signed a respective agreement with the European Bank for Reconstruction and Development, the International Finance Corporation and the Finnish investment funds Finnventure Rahasto V and Finnventure Rahasto IV. The corporation expects to complete the acquisition by July 1.
Kauno Diena, Verslo Zinios
Airbaltic leases Moldovan aircraft for flights from Vilnius
Latvia's air carrier Airbaltic, offering no-frill flights from Riga and Vilnius, has leased a plane from Moldovan air company to cover the shortage of aircraft for flights from Vilnius. Airbaltic leased the Fokker 100 plane a fortnight ago, with the contract to be in effect for several months, said Alvydas Sumskas, deputy director of Civil Aviation Administration. He adds that the plan meets all requirements and airBaltic received approval from Latvian civil aviation watchdog to lease the aircraft.
Intellectual property piracy on decline in Lithuania
Some 17,000 unauthorized copies of music recordings, films, computer games and other intellectual property were taken out of the market in Lithuania during the first five months of this year, down from 37,000 a year earlier. The Lithuanian Criminal Police Bureau together with the Lithuanian Music Industry Association (LMIA) inspected 93 companies and market places in the five months, up from 77 in the same period last year.
"More companies were inspected, but fewer illegal copies of intellectual property were taken out (of the market). The decline in piracy in this country is due to several key factors," LMIA vice-president Vytas Simanavicius said.
He said the main reason was an increase in CD and DVD manufacturing, which has brought down prices of legal copies.
Tuesday, 13th of June
Geonafta continues oil exploration in Lithuania
Lithuanian oil producer Geonafta is planning to drill an exploratory well near Telsiai, in the northwestern part of the country, this autumn, but is putting on hold its plans to expand into Russia and Kazakhstan.
"Early this autumn, we intend to drill an exploratory well in the district of Telsiai, which will cost us LTL 3 million. If we are lucky, we can expect (to find) 0.4 million cubic meters of oil in this deposit," Geonafta production director Kestutis Ivanauskas said.
However, the company is shelving its plans to invest in oil production in Russia and Kazakhstan. "Our expansion plans in these countries have been put on hold due to a sharp increase in prices of facilities offered for sale at auctions, but we continue to watch the situation in the market," Ivanauskas said.
Lithuanian oil production has been on the decline in recent years. Last year, it fell by 28.5 percent to 216,600 tons.
Lietuvos Zinios, Lietuvos Rytas
Ekranas to lay off 3,700 employees
Lithuania's stricken TV tube manufacturer Ekranas plans to lay off 3,667 employees after June 15. The financially troubled company filed for bankruptcy in a court on April 7 and ceased production on April 11. It is planned that around LTL 16 million will be paid to Ekranas' employees out of the Guarantee Fund, or some LTL 4,000 per person.
Ekranas posted a loss of LTL 110.3 million for 2005, versus a net profit of LTL 1.29 million in 2004. Sales dropped by 27.3 percent to LTL 339.6 million last year. Lietuvos Rytas, Lietuvos Zinios, Verslo Zinios
Vilnius Airport launches construction of new terminal
The construction of a new passenger terminal at Vilnius International Airport was formally started on Monday. "The capital needs the new passenger terminal not only because of the Schengen Treaty requirements, but also because of a strong rise in passenger numbers, particularly after (the country) joined the European Union," Vilnius Airport CEO Mindaugas Ivanauskas said.
YIT Kausta, a Lithuanian building company controlled by Finland's YIT Construction, is expected to complete the construction of the 14,000-square-meter terminal by October 1, 2007. The new terminal will increase the airport's capacity to 3 million passengers per year.
Respublika, Lietuvos Rytas, Verslo Zinios
Monday, 12th of June
Lithuania's exports rise 28 percent, imports up 24.5 percent
Lithuanian exports grew by 28 percent to LTL 12.132 billion in the first four months of this year from a year earlier, while imports rose by 24.5 percent to LTL 15.655 billion.
The foreign trade deficit for the four months widened by 13.9 percent year-on-year to LTL 3.523 billion. In April, exports increased by 16 percent from a year earlier, while imports declined by 5.5 percent. Month-on-month, exports fell by 10.1 percent and imports were down 17 percent. The country's biggest export partner was Russia, accounting for 10.7 percent of total exports in January-April, followed by Latvia with 9.7 percent, Germany with 7.8 percent and the US with 6.7 percent. Russia also topped the import rankings with 23.9 percent of total imports. Other major import partners were Germany with 13.8 percent, Poland with 9.2 percent and Latvia with 4.4 percent.
Lietuvos Zinios, Verslo Zinios, Kauno Diena
Handling by Klasco down 1 percent
Klaipedos Juru Kroviniu Kompanija (Klaipeda Stevedoring Company, or Klasco), the largest operator in the Lithuanian port of Klaipeda controlled by Achema Group, handled 3.27 million tons of cargo in the first five months of 2006, a decline of 1.1 percent versus the year-earlier figure of 3.66 million tons. In May alone, the handling shrank by 4 percent, to 600,000 tons, from 690,000 tons in May 2005.
However, excluding the container terminal divested in late 2005, the handling made up 3.31 million tons in January-to-May period of 2005 and 625,000 tons in May 2005 alone. The company attributed the overall decline to thinner flow of Belarus fertilizers, which resulted on unfavourable Belarus policies and suspended manufacturing at some fertilizer plants.
Hansabankas sees sales, earnings of Apranga up by one-third in 2006
The sales and earnings of Apranga, Lithuania's leading clothing retailer controlled by MG Baltic concern, should grow by more than one-third in 2006, and the growth of these two indexes will remain fast in both 2007 and 2008, the analysts of Hansabankas, the second largest Lithuania's commercial bank by assets, have projected. In 2006 the sales of Apranga should soar by 34.6 percent, year-on-year, to LTL 228.898 million (hereinafter figures ex VAT). The net profit should grow by 35 percent, to reach LTL 12.937 million.
In 2007, the sales of Apranga should surge by 35 percent, to LTL 309.012 million, while the net profit would grow by 37 percent, to LTL 17.839 million.
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