||Lithuania Business News: Archive 2003-2006
Saturday, 9th of September
EC will not delay conclusions on the sale of Mazeikiu Nafta
The European Commission (EC) will make no delays and will state its conclusions on the sale of Mazeikiu Nafta (Mazeikiai Oil) to PKN Orlen in a month after the Polish oil concern submits the official request for the purchase of the sole Baltic oil refining and transportation complex, European Commission President Jose Manuel Barroso said to Lithuania's Prime Minister Gediminas Kirkilas in Brussels.
The Lithuanian oil complex posted LTL 371.297 million in consolidated net profit for the first half of 2006, a decline of 19.59 percent versus the year-earlier figure of LTL 461.77 million.
The projected full-year net profit, however, has recently been revised higher, to LTL 507.8 million, from previously forecast LTL 336.5 million.
Lietuvos Zinios, Lietuvos Rytas, Respublika, Kauno Diena
Litexpo completed construction of multifunctional pavilion
Litexpo, the state-run Lithuania's exhibition centre, has completed a new multifunctional pavilion, which has eaten up LTL 28 million in investments.
With the new pavilion, which has been granted LTL 8 million in EU assistance, completed, Litexpo has become the leader of Baltic exhibition organization market and has turned into a modern international congress and conference centre.
The area of new building, which has been merged with the fourth exhibition pavilion, totals 8,900 square meters. The new pavilion accommodates an exhibition hall that could be transformed into a 1,800 seat conference hall easily.
General Electric enters Lithuania
The American business giant General Electric has launched business of transport rent for companies in Lithuania. TIP Trailer Service, a company controlled by General Electrics, controls the biggest depot of cargo and semi-trailer vehicles in Europe.
Jesper Almindo, CEO of TIP Trailer Service, says that the company has launched activities in Lithuania in order to strengthen its positions in the Baltic countries and the Northern Europes region. It has been operating in Estonia for eight years now. He says the next step of TIP Trailer Services will be to Russia.
Mr. Almindo does not doubt that more companies of the corporation will enter the Lithuanian market as soon as the bank of General Electric will be established in Lithuania.
Friday, 8th of September
Lithuanian factoring market grows
The Lithuanian factoring market posted LTL 5.65 billion general turnover last year and is to grow by another 20 percent this year (to LTL 6.78 billion), experts of Nordea Finance forecast. According to them, growth of the factoring market will be preconditioned by changes of potential clients needs, investments in production development and EU support.
Nordea Finance launched factoring services at the start of this year. Based on the data of the Lithuanian Leasing Association, at the end of June the limits of new contracts signed by the company amounted to LTL 73.59 million, while the limits of valid factoring contracts stood at LTL 74.43 million. Nordea Finance plans to occupy 15 percent of the Lithuanian factoring market over the coming several years.
Verslo Zinios, Lietuvos Rytas
Audimas has got ambitious project
A Kaunas-based sportswear producer AB Audimas plans to open a new production department in Lithuania and to launch production abroad in order to avoid employees shortage.
The company employs 1000 people at the moment and plans to hire 100 workers this year and next year respectively.
Audimas has prepared a business development project and planned to invest some LTL 17 million in the sportswear production technologies and a design centre. The company counted on the support from the EU structural funds, however, its application for support was rejected. Rimvydas Povilaitis, board chairman of AB Audimas, says some parts of the project have been reduced, however, the company has not renounced the business plan or the idea to establish a textile industry group.
Construction of Baltic Logistic City has begun
Construction of the biggest logistics city in the Baltic countries Baltic Logistic City was begun in Kaunas on September 7. It is planned to invest LTL 83 million in the cargo storage and administration complex over the coming two years. The first building of the Baltic Logistic City should be constructed by July 2007.
The new logistics complex is to be located near the Via Baltica highway.
Kauno Diena, Respublika
Thursday, 7th of September
Insurers return from investments shrinks
Insurance companies operating in Lithuania do not earn profit from their direct activities, moreover, this year they have been let down by the securities market as well: return of insurers from investment activities is much lower than expected. Even though it is claimed that insurers losses will not affect clients directly, specialists of the Insurance Supervision Commission warn that investors patience might run out.
Insurance specialists remark that negative results cause suspicion about reliability of certain insurance companies. Darius Kamuntavicius, director general of If Draudimas, says there should be no suspicious about the biggest insurance companies because our shareholders are clearly determined to continue working. Meanwhile Giedrius Kazlauskas, director general of a broker company AON Lietuva, is convinced that reliability of some insurance companies has reduced.
Iki takes over competitor
A retail trade chain Iki is taking over 11 stores of the trade chain Pliusas controlled by Viciunai ir Ko, the rest of Pliusas stores (17) will be rented.
Aidas Mackevicius, director general of Palink, says the geographic location of Pliusas stores meets the development plans of Iki, while the store format is similar to that of Iki trade centres therefore it will not be difficult to reorganise the newly acquired trade centres. He adds that the new purchase will should guarantee good trade results in near future.
Verslo Zinios, Lietuvos Rytas, Lietuvos Zinios, Respublika
Alita to set up an office in Latvia
Alita, Lithuanian alcoholic beverage producer, aims to set up a representative office in Latvia. "Latvia is a fast growing market for our products. We are setting up a representative office since we seek to establish better cooperation with partners and perceive the situation on the market on site," Vytautas Junevicius, Alita CEO, says.
Alita's alcoholic drink exports soared by 65 percent in the first seven months of this year from a year earlier to LTL 2.42 million. The strongest growth was in exports to Latvia, which, along with Estonia, is Alita's biggest export market.
Alita posted LTL 4.556 million in consolidated net profits for the first half of this year, a rise of 47 percent year-on-year. Consolidated sales were up 14 percent to LTL 58.437 million.
Verslo Zinios, Lietuvos Rytas, Respublika
Wednesday, 6th of September
Lithuanian power plant rejects EBRD loan
Lietuvos Elektrine (Lithuanian Power Plant), which aims to complete the first stage of modernization program by the end of 2008, has refused to take the EUR 15 million loan from the European Bank for Reconstruction and Development (EBRD).
"We have rejected that loan since we have sufficient cash flows and sufficient financing," said Rolandas Jankauskas, Lietuvos Elektrine's CFO.
Earlier the power plant projected that the loan from EBRD, if taken, would be repaid after the power plant obtained a long-term EUR 49 million loan from Lithuania's banks. The syndicated 15-year loan was extended by four Lithuania's commercial banks last fall.
The power plant had used a minor part of that loan by far, Jankauskas said.
In 2007, with the projects of the second stage of upgrade program and their financing set forth, Lietuvos Elektrine would negotiate a new loan with the banks.
AI boilers will be produced in Ukraine
Axis Industries (AI), Lithuania's industry and energy project developer that is a part of Rubicon Group, has clinched a contract with Ukraine's Ukrchimenergo concerning the production of bio-fuel boilers.
Ukrchimenergo will produce mid-capacity bio-fuel boilers for the Lithuanian company. The boilers will be designed by Axis Industries.
The Ukraine-made boilers generating 10-25 tons of steam per hour would be supplied to Eastern European markets.
At present, production of AI is marketed in Latvia, Estonia, Ukraine, Russia, Belarus, Slovakia, Sweden and Germany.
Verslo Zinios, Lietuvos Rytas, Lietuvos Zinios
Project in Africa
Informacines Technologijos (Information Technologies), the company creating and installing big software systems, is to implement a EUR 4 million contract in South Africa during 2006-2007. The company will install an insurance business management system The Insurance Application in the second biggest South African insurance company Mutual & Federal.
Respublika, Lietuvos Rytas
Tuesday, 5th of September
Aggressive policy continued
The cheap flight company Ryanair continues using aggressive marketing policies. Even though the European Commission has started fighting against flight companies offering free tickets, the Irish company declared that it would grant another 4 million tickets for free this month. 50,000 tickets will be allocated to Lithuanian passengers flying to or from Kaunas. The goal of this campaign is to win back passengers who renounced flights to London last month because of terrorism threat.
Profit of Mazeikiu Nafta shrinks
Mazeikiu Nafta (Mazeikiai Oil), the sole Baltic oil refining and transportation complex in the process of being taken over by Poland's oil concern PKN Orlen, posted LTL 371.297 million in revised consolidated net profit for the first half of 2006, a decline of 19.59 percent versus the revised year-earlier figure of LTL 461.77 million.
The representatives of the Lithuanian oil complex attributed the decline to the growing costs of raw crude purchase and the loss of crude supply from the current key shareholder, the embattled Russia's oil concern Yukos.
Kauno Diena, Respublika, Lietuvos Zinios
Klaipedos Baldai posts smaller profit
Klaipedos Baldai, one of Lithuania's leading furniture manufacturers controlled by multi-business group SBA, posted LTL 1.202 million in net profit for the first half of 2006, a plunge of 2.7 times versus the year-earlier figure of LTL 3.258 million.
Eimuntas Jankauskas, director of Klaipedos Baldais, says the company expects to improve the profitability figure in the second half of the year.
Lietuvos Zinios, Verslo Zinios
Monday, 4th of September
Half-year revenues of transport, communication and service companies rise
Based on preliminary data, revenues of Lithuanias transport, communication and service companies for the first half of this year (VAT excluded) amounted to LTL 13.654 billion, a 24.4 percent rise since the relevant period last year.
Revenues of transport companies surged by 24.4 percent, to LTL 5.756 billion over the given period. Revenues of post and e-communication companies increased by 12.3 percent, to LTL 1.589 billion, while revenues of service companies soared by 27.8 percent and stood at LTL 6.310 billion, the Statistics Department reports.
New factory of Sanitas
The Lithuanias biggest pharmaceutical plant Sanitas had used LTL 3.107 million for construction of a new factory in Kaunas by the end of June, or nearly 1/5 of the sum allocated from the European Unions structural funds. Sanitas plans to use the rest of the sum in 2006-2007.
The new factory project of Sanitas is estimated at more than LTL 40 million. The factory construction works should be completed in the first half of 2007.
Kauno Diena, Verslo Zinios
Roofing producers installs new production line
Producer of the polymeric bitumen roofing UAB Gargzdu Mida is installing a new production line and is looking for the new export markets, as the companys potential is much bigger than Lithuanias demand.
The company plans to start using a new German Reiser roller roofing cover production line and to employ 50 new employees. Gargzdu Mida produces an average of 11 million m2 roofing per year. This year, it plans to produce 13 million m2 of roofing.
In the first half of this year, the turnover of the company stood at LTL 26.3 million, a slight drop since the first half of 2005. The projected revenues for 2006 amount to LTL 72 million.
Back to Baltic Business Monitor