||Lithuania Business News: Archive 2003-2006
Saturday, 30th of September
Lithuania's GDP growth revised to 7.6 percent
Lithuania's gross domestic product grew by 7.6 percent in 2005 compared with the previous year, according to revised estimates. The previous GDP growth estimate for 2005 was 7.5 percent. According to non-final data, the country's GDP totaled LTL 71.2 billion last year and GDP per capita was LTL 20,854. The value added of construction works grew at the rapidest pace in the first quarter of 2006 (18.2 percent) as well as manufacturing (15.2 percent) and real estate and other business (10.3 percent).
Retail sales grow 14.1 percent in the first eight months
Lithuanian retail sales grew by 14.1 percent in the first eight months of this year from a year earlier to reach LTL 16.778 billion. Food retailers boosted their aggregate turnover for the reporting period by 6.5 percent, while non-food retailers, excluding motor sales, posted a 9 percent rise. In both groups, the best results were achieved by companies employing more than 50 people, 12 percent and 28.8 percent respectively. The strongest growth rate, 35.4 percent, was recorded by textile, clothing and footwear retailers.
The aggregate turnover of restaurants, bars and other catering establishments increased by 3.3 percent year-on-year to LTL 521.4 million. For companies employing 50 and more people, the growth rate was 26.8 percent.
Illegal GM rice found in VP Market chain
VP Market, the largest grocery chain in the Baltics, has imported a batch of genetically modified rice not approved in the EU. Part of the rice has already been placed on the market, the Lithuanian State Food and Veterinary Service (SFVS) said. VP Market was inspected following an alert notification through the EU's rapid alert system.
The SFVS established that VP Market had imported 1,890 kilograms of Bosto Paraboiled long grain rice and Bosto Wilde Rice.
Friday, 29th of September
Lithuanian residents spent LTL 1.292 billion on trips
Lithuanian residents spent a total of LTL 1.292 billion on travel related expenses in the first half of this year. Spending on domestic travel rose by 26.4 percent from a year earlier to LTL 107.4 million, while spending on travel abroad went up by 16.3 percent to LTL 1.184 billion. Some 872,000 residents took domestic trips with at least one overnight stay in the six months, up 10.3 percent year-on-year. The number of one-day visitors grew by 0.7 percent to 4.06 million, according to a survey of 12,200 people.
Some 631,700 Lithuanian tourists travelled abroad in January-June, a rise of 5.7 percent year-on-year. The number of trips with at least one overnight stay went up by 2.9 percent to 805,000. In the second quarter, Lithuanians spent LTL 109 per trip on domestic travel and LTL 1,400 on travel abroad. Most of the foreign trips in the second quarter were to Latvia (17.2 percent), Russia (12.4 percent), Poland (12.3 percent), Germany (12.0 percent) and Belarus (11.1 percent).
VP Market opens 13th store in Bulgaria
VP Market, the largest grocery chain in the Baltics, opened its 13th Bulgarian store in the country's second-biggest city of Plovdiv on Thursday. The new T-Market store covers an area of 625 m2. The group now has nine stores in Sofia, two in Plovdiv, and one in Pernik and Vraca each.
It currently operates a total of 353 stores in the three Baltic countries, Romania and Bulgaria, under the names of Maxima, Saulute, T-Market and Albinuta.
VP Market posted consolidated sales of EUR 835.4 million for the first half of this year, up 18 percent from sales of EUR 707.3 million a year earlier. It targets a 20 percent growth in annual sales this year, from EUR 1.502 billion last year.
Shopping abroad is not popular among Lithuanians
Lithuania's residents lag behind the majority of other EU Member States in terms of shopping abroad with only some 15 percent of population making use of cross-border shopping in latest year, the latest EU consumer survey commissioned by the EC has shown. Lithuania only surpasses Spain (11 percent), Portugal (11 percent) and Greece (7 percent) in the ranking.
Lithuania's cross-border shoppers spend up to EUR 100 for their purchases.
Lietuvos Zinios, Lietuvos Rytas
Thursday, 28th of September
SEB Vilniaus Bankas to present investment notes
SEB Vilniaus Bankas, the largest bank in Lithuania, intends to launch investment notes, a new investment instrument that will offer an opportunity to profit not only when share prices rise, but also when they fall.
The placement of investment notes is expected to start on October 2 and close on October 17, subject to approval from the Securities Commission.
"This is a worldwide novelty, which was introduced by SEB in Sweden this past summer. Based on the return-to-risk ratio, this new investment instrument fills the niche between equities and equity-linked bonds," Vykintas Misiunas, director of the bank's Financial Markets Department, claimed. The bank guarantees that the investment will earn a profit unless the value of the index falls below the established threshold, which is around 50 percent for this offering, at least once over the period, Misiunas said.
BMV to expand to Vilnius, Kaunas as well as Latvia and Estonia
Baltic Multiplex Ventures (BMV), which now operates two Cinamon movie theaters in Lithuania, is considering opening new complexes in Kaunas and Vilnius and is planning to expand into Estonia and Latvia.
"In such cities as Kaunas and, the more so, Vilnius, the optimal number of movie theaters is three to five, so the market for quality cinema services in those cities has still room for growth," BMV Executive Director Arpad Abonyi declared on Wednesday.
He said the company was considering building a leisure center in Kaunas, which, among other entertainment services, would house a Cinamon multiplex with nine screens.
The company gave no details about its planned movie theater in Vilnius.
Lietuvos Rytas, Kauno Diena
Baltic Logistic System Vilnius is to unify its brands
A parcel delivery service company UAB Baltic Logistic System Vilnius (BLSV) is to change its name to DPD Lietuva in October 2006 and plans to renounce Bizpak brand completely by the end of the coming year.
Vytautas Kudzys, CEO of BLSV, says the company has had too many brands, which caused too much confusion. We will leave one brand, DPD, for the sake of clarity and simpler communication, he says.
Having renounced Bizpak brand, BLSV will change not only the name but also the structure: it will become an international company.
DPD chain is controlled by GeoPost, a subsidiary of the French state post Le Post. Its president Paul Marie Chavanne is glad that the rates of BLSV operation in the Baltic countries are the highest in the European Union.
BLSV controlled 35 percent of the parcel delivery market in Lithuania in terms of revenues last year.
Wednesday, 27th of September
PM denies PKN Orlens talks with Russias Lukoil
On Tuesday the Prime Minister Gediminas Kirkilas denied media reports that Poland's PKN Orlen is in talks with Russia's Lukoil to sell it a stake in the Lithuanian oil refinery Mazeikiu Nafta (Mazeikiai Oil), saying that the Polish group has long been working with Russian companies.
Kirkilas said that the deal with PKN Orlen on Mazeikiu Nafta was proceeding as planned. He met with PKN board chairman and president Igor Chalupec on Tuesday.
The Lithuanian oil refinery has not been receiving crude for a week already therefore it operates at half capacity and has taken advantage of this situation in order to conduct some repair works.
Kauno Diena, Lietuvos Rytas, Respublika
Nemuno Vaistines to merge with Mauda
Kaunas-based Nemuno Vaistines (Nemunas Drugstores), the operator of one of the biggest Lithuanias drugstore chains Camelia, is to merge with the wholesale pharmaceutical company Mauda and its subsidiaries.
The executive director of Camelia chain Mindaugas Antanaitis says the reorganisation process is being launched and should be completed by the end of the coming year. He says it is hoped that the merger will enable Camelia drugstores to cut prices of medicaments even more.
Last year the turnover of Camelia drugstore chain amounted to LTL 129.27 million, a 49.1 percent rise year-on-year. The turnover of Mauda stood at LTL 79.6 million, or LTL 19.6 million more than in 2004.
Kauno Diena, Lietuvos Rytas, Verslo Zinios
FlyMe scraps LAL purchase
Sweden's low-cost carrier FlyMe Europe has decided to scrap the purchase of Lietuvos Avialinijos (Lithuanian Airlines, or LAL), the largest Lithuania's carrier, which is currently controlled by local financial investors.
Having assessed the due diligence results, the board of FlyMe Europe had turned down the plans to gradually acquire the Lithuanian carrier, the Swedish carrier said in a statement, adding, however, that the cooperation between two companies should continue.
Meanwhile on Tuesday the head of LAL declared that the owners of the company are not going to sell its shares to FlyMe Europe therefore they have cancelled the negotiations.
Lietuvos Rytas, Respublika, Verslo Zinios
Tuesday, 26th of September
Retail price of bread increased
The retail prices of bread soared by one-fourth in Lithuania in twelve-months to mid-September, the Agriculture Information and Rural Business Development Centre reports.
The average retail price for brown bread surged by 25.2 percent, to LTL 2.88, from LTL 2.3 per kilo a year earlier. Meanwhile, the average retail price of wheat bread made up LTL 2.87 per kilo in mid-September, a rise of 21.6 percent year-on-year.
Respublika, Lietuvos Zinios, Kauno Diena, Lietuvos Rytas, Verslo Zinios
CPI purchases land on Vilnius outskirts
A real estate investment fund managed by Citigroup Property Investors (CPI), the real estate investment branch of Citigroup, has purchased a land package on the outskirts of Vilnius, suitable for residential development, from the Lithuanian investment company ZIA Valda in a deal worth over LTL 50 million.
"We think there is still a shortage of quality, affordable accommodation in Vilnius. We look forward to working with local authorities and contractors to ensure quality housing located in an attractive, highly-accessible location of Vilnius. We are committed to the Lithuanian market and hope to do more here in the future," Roger Orf, head of CPI Europe, said.
Lietuvos Zinios, Respublika, Verslo Zinios
Credit habits of Lithuanians
More than a fifth of Lithuanians have taken bank credits, while a tenth of countrys residents allot 10 percent of their income for credit payment, a poll conducted by a polling and market research company RAIT reveals. Majority of credit (housing loan, consumer credit, etc.) recipients are of the age 25-34. They also allocate the biggest part of their income for credit payment, compared to other age groups.
Kauno Diena, Lietuvos Zinios, Lietuvos Rytas
E.ON plans in Lithuania and the Baltics
The German energy giant E.ON has taken interest in the energy projects of the Baltic countries and Lithuania.
According to the well-informed sources, E.ON would like to participate in the construction of a new nuclear power plant planned by the three Baltic countries. The Germans are also interested in the project of a new combined cycle power plant in Elektrenai, production of which would be able to compete with nuclear power. Lars Frithiof, head of E.ON Nordic, presented the companys plans to Lithuanias Prime Minister Gediminas Kirkilas during a visit in Lithuania.
Monday, 25th of September
Novaturas boosts sales
Novaturas, the biggest tour operator in the Baltics, said its sales in Lithuania for the first eight months of this year rose by 18 percent from a year earlier to LTL 91.6 million.
The company said it was expecting very strong results for its ongoing summer season.
Novaturas has sold 47,000 summer travel packages already, 14.6 percent more than in the same season last year.
Novaturas also has operators in Latvia and Estonia.
The company's annual sales in Lithuania jumped by 46.5 percent to LTL 108.01 million last year. The group's total sales in the three Baltic countries soared by 77 percent to LTL 185.103 million.
Profit of Vilniaus Baldai shrinks
Vilniaus Baldai (Vilnius Furniture), one of Lithuania's leading furniture manufacturers, reported a pre-tax profit of LTL 566,000 for the first eight months of this year, down from LTL 2.023 million a year earlier.
In August, the company posted a loss of LTL 46,000, versus a pre-tax profit of LTL 510, litas in the same month last year.
Vilniaus Baldai chief finance executive Vygantas Didziulis said that August was the company's second unprofitable month this year after April. "We are currently working on a new range of products for Ikea, so there are more faulty products," he said.
The Vilnius-based manufacturer signed an 18-month contract with the Swedish furniture group Ikea, its main buyer, in June, with the possibility to extend the contract for another three years.
Lietuvos Zinios, Verslo Zinios
Lithuanian air carriers serve less clients
Lithuanian air carriers saw the total passenger numbers decline by 1.5 percent, year-on-year, to 471,600, in the first eight months of this year, the country's Statistics Department has reported.
The lion's share of passengers, 299,800 or 63.6 percent, took the regular flights, a decline of 16.6 percent versus the January-to-August period of 2005.
Domestic air carriers transported 3,100 tons of cargo and mail during the eight-month period, a plunge of 50.8 percent from the January-to-August period of 2005.
Back to Baltic Business Monitor