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Lithuania Business News: Archive 2003-2006

WEEK 42.2006

Saturday, 21st of October

Giesecke & Devrient to print new litas notes for Lithuania
Germany's Giesecke & Devrient on Friday signed a contract with the Bank of Lithuania to print new 20-litas notes of the 2007 issue and 200-litas notes of the 1997 issue.
Giesecke & Devrient, which earlier printed 50, 200 and 500-litas notes that are currently in circulation, is to print the new banknotes by next spring.
"The stocks of banknotes of some denominations are running low and need to be replenished. The design of the new 20-litas note will be the same as that of the current note, but it will be more secure. The design and security features of the 200-litas note will not change," said the Bank of Lithuania's governor, Reinoldijus Sarkinas.
Currently, there are over 70 million litas notes of different denominations and almost 700 million centas coins of different denominations in circulation. The total weight of banknotes is around 70 tons and that of coins is approximately 1,300 tons.
Lietuvos Rytas, Respublika, Lietuvos Zinios

Apranga seeks to become leader on Estonia's market in coming years
Apranga, Lithuania's leading clothing retailer with operations in all three Baltic countries, seeks to become the leader on Estonia's clothes retail market in coming years. The retailer controlled by MG Baltic concern has opened two luxury shops, which ate up the investments of some LTL 5.2 million in Tallinn on Friday.
"We will only be satisfied if we are the leaders on all our markets. We have become the leaders in Latvia in three years and a half. Apranga will seek to also become the leader on Estonia's market in coming two or three years," said Rimantas Perveneckas, Apranga CEO.
One of two new stores - the 590 m2 Emporio Armani store set up under franchising arrangements with Giorgio Armani. Another store with the area of 320 square meters will trade in D&G, GF Ferre, La Perla, Just Cavalli, Versace Jeans and other luxury brands.
Lietuvos Zinios

Ryanair set to launch flights from Kaunas to Frankfurt
Irish budget airline Ryanair is launching a new route between Lithuania's second-biggest city of Kaunas and Frankfurt, in Germany, next Wednesday. Travellers flying to Frankfurt will land at Hahn Airport. The airline will travel on the route four times a week.
Ryanair began services to and out of Lithuania last year. It now offers flights from Kaunas to Stockholm, Dublin, London and Liverpool.
Kauno Diena, Lietuvos Zinios

Friday, 20th of October

Possible selloff of RST power grid to be decided in December
The decision on privatization of Rytu Skirstomieji Tinklai (RST), the state-run operator of eastern part of Lithuania's power grids, is likely to be taken by the end of the year.
The Ministry of Economy has concluded an agreement with local company Verslo Raktas, which will study the necessity of selloff.
The possible list of bidders for RST might include Germany's E.ON Ruhrgas, Estonia's Eesti Energia, Lithuania's companies Achema Group, MG Baltic, Hermis Capital and NDX Energija controlled by the owners of Vilniaus Prekyba. Moreover, Polish power grid company PSE, Finland's Fortum, Russia's Gazprom and RAO UES, Spain's Iberdrola and a Turkish energy utility may also vie for one of two Lithuania's power grid operators.
Lietuvos Zinios, Lietuvos Rytas

Grigiskes will not reach targeted sales
Lithuania's leading hardboard and toilet paper manufacturer Grigiskes posted LTL 4.974 million in consolidated pretax profits for the first nine months of this year, as sales rose by 16.1 percent from a year earlier to LTL 88.01 million. The company plans to reach LTL 118 million turnover and earn LTL 7.8 million pre tax net profit in 2006. The producer is not likely to reach the targeted annual sales due to delayed operation of a new paper production machine and higher prices of raw materials as well as gas.
Verslo Zinios

Lithuanian public broadcaster LRT is detrimental
Public broadcaster Lithuanian Radio and Television (LRT) posted a net loss of LTL 1.51 million for 2005, compared with a net profit of LTL 1.24 million the previous year. LRT's revenues, not including state subsidies, reached LTL 19.8 million last year, down 5 percent from LTL 20.9 million in 2004. 2005 was the first year that LRT had to pay profit taxes, following certain amendments to the Law on Profit Tax. Excluding the tax paid on the 2004 profit, its losses for 2005 would be LTL 926,000. The public broadcaster's budget, including revenues from services and state funds, totalled LTL 59.1 million last year, down 0.7 percent from LTL 59.5 million the previous year.
LRT had assets worth LTL 74.5 million at the end of 2005, a rise of 9 percent from a year earlier.
Verslo Zinios

Thursday, 19th of October

Iki takes over 11 stores from Viciunai group
Palink, the operator of the second-largest Lithuania's supermarket chain Iki, has taken over a chain of 11 stores Pliusas from Viciunai group, the leading Baltic frozen fish products maker. Iki would reorganize the stores based in Kaunas, Vilnius, Plunge, Rietavas and Raseiniai into 9 Iki stores and 2 discount outlets Leader Price.
The first reorganized store would be opened in November. The refurbishing of all outlets would be completed by mid-2007. Former employees of Pliusas chain would join the team of Iki.
Since January Iki has already opened 18 new Leader Price stores and 7 Iki outlets.
Iki posted sales of LTL 1.194 billion, including VAT, in Lithuania and Latvia for the first nine months of 2006, a rise of 23.9 percent from the year-earlier figure.
Including the recently taken over stores, the Iki chain currently covers 187 retail outlets in Lithuania and Latvia, and employs a workforce of about 7,000.
Lietuvos Rytas, Respublika

Net profit of Parex down 12 percent
Lithuanian bank Parex, which is owned by the Latvian financial group Parex, posted a net profit of LTL 5.3 million for the first nine months of this year, a decline of 12 percent versus the year-earlier figure. .
"We are implementing active expansion program, which is evidenced by growing loan and deposit portfolios, but which is affecting the profit results," Alma Vaitkunskiene, Parex chairwoman, said.
The loan portfolio of the bank soared by 65 percent, to LTL 462 million, while the assets increased by 61 percent, to exceed LTL 777 million.

Kaunas sports complex granted national status
The Lithuanian government on Wednesday granted a national status to a sports and entertainment complex in the country's second-largest city Kaunas, which France's Bouygues Batiment International is planning to build. This will allow applying for LTL 116 million in EU financing for the project.
However, the national status does not guarantee that the project will receive EU funds. The Lithuanian Business Support Agency has recently turned down a project for the reconstruction of the Girstutis Sports and Leisure Complex in Kaunas, which also has this status.
The municipality of Kaunas opened negotiations with Bouygues Batiment International for the construction of a sports and entertainment complex on the Nemunas River island in May.
Kauno Diena, Respublika

Wednesday, 18th of October

Lithuania home to most major Baltic IT companies
Lithuania is home to over a half - 11 of 20 largest Baltic IT companies in terms of interim revenues on IT services. The top twenty of Baltic IT companies include four Estonian companies as well as four companies based in Latvia. Moreover, the ranking shows Columbuc IT Partner, an IT company active in all three Baltic countries.
Lithuania's Sonex Group ranks the first in terms of six-month revenues on IT services, which the consultancy put at LTL 37.5 million.
Lietuvos Rytas

Real wages rise 6.8 percent in 2005
Real wages in the Lithuanian economy, including sole proprietorships, rose by 6.8 percent last year. Real wages in the public sector increased by 7.1 percent, while wages in the private sector were up 7.2 percent. Average monthly gross earnings in the economy reached LTL 1,276 in 2005, a rise of 11 percent from the previous year. Gross earnings in the public sector increased by 11.2 percent to LTL 1,414, while earnings in the private sector jumped by 11.6 percent to LTL 1,194.
Lietuvos Rytas, Respublika

Alytaus Tekstile trims losses
Lithuania's financially-troubled cotton textile manufacturer Alytaus Tekstile posted losses of LTL 1 million for the first nine months of this year, down from losses of LTL 6.484 million a year earlier. Sales for January-September fell by 0.8 percent year-on-year to LTL 51.2 million. The textile producer revised its financial forecasts for the full year 2006 in late July and is now projecting losses of LTL 4.3 million, compared with its earlier target of a 2.3-million-litas profit. Annual sales are projected at LTL 68.1 million.
Verslo Zinios, Respublika

Tuesday, 17th of October

Lithuania's October CPI seen up 0.6 percent
The Lithuanian Statistics Department forecasts a 0.6 percent monthly inflation rate for October, as rising energy prices are believed to have driven up prices for many other goods and services.
"We forecast an increase in prices in the housing group due to the start of the heating season. Seasonal factors are believed to have pushed up clothing and footwear prices. We also forecast a slight rise in healthcare prices," Nomeda Bratcikoviene of the department's Econometric Research Unit, said.
Lietuvos Zinios, Respublika

Fire losses of Mazeikiu Nafta seen at LTL 131 million
Mazeikiu Nafta, the Lithuanian oil complex in the process of being acquired by the Polish oil concern PKN Orlen, suffered up to LTL 131 million in losses through the fire outbreak last Thursday, which may cut the 2006 net profit of the company by approximately one-fifth or LTL 105 million, to LTL 402.8 million. The company projects that it would take some 6-to-9 months to restore the usual and optimal capacities of 27,400 tons per day. The minimum losses suffered due to the accident might reach some LTL 62 million. The refining process at the refinery is continued, with the capacities currently running at 15,000 tons per day.
Mazeikiu Nafta has obtained property insurance and coverage for losses on the suspension of operations on the international insurance market. The insurance broker of the oil complex is AON Limited (London), while 46.2 percent of insurance risks are undertaken by three companies - Liberty International Underwriters, AIG Europe and SCOR UK Company. The property has been insured at replacement value.
Kauno Diena, Lietuvos Zinios, Respublika, Verslo Zinios

Lithuanian, Polish PMs to sign agreement on power link venture in November
Lithuanian and Polish prime ministers intend to sign in November an agreement on the establishment of a new energy company for the implementation of a project to connect the two countries' power grids. Lithuanian Economy Minister Vytas Navickas said this during a meeting with the Swedish ambassador to Lithuania, Malin Karre, on Monday.
In late September, Lithuanian and Polish economy ministers signed a letter of intent to connect the countries' energy systems and to cooperate in developing their energy industries.
According to preliminary estimates, a connection between the power grids would cost about a billion litas. Lithuania expects the power link construction to begin next year and be completed in 2011.
Lietuvos Zinios

Monday, 16th of October

Mazeikiu Nafta may face huge losses
The losses of Mazeikiu Nafta incurred through the outbreak of fire at the Mazeikiai refinery of the Lithuanian oil complex last Thursday may reach some LTL 150 million. The construction of HFO distillation unit ravaged by fire would cost some LTL 80 million. Moreover, the company would lose some LTL 20-70 million owing to a forced decline in the output of refined products. The property ravaged by fire and the resulting production losses would be compensated, the insurance experts project.
Lietuvos Zinios

EU subsidies to Lithuania's food producers surge 41 percent
The amount of subsidies allocated by the EU to Lithuania's processing companies for the exports of foodstuffs, soared 41.3 percent, year-on-year, to LTL 179.6 million in the first nine months of 2006. Subsidies to sugar plants, the main beneficiaries, rose by 35 percent, to LTL 90.6 million, from LTL 67.1 million in January-September 2005. Subsidies for the exports of milk and its products grew by 9.6 percent, to LTL 51.9 million, meat and meat products - 29 percent, to LTL 28.7 million, and grain - by 18 times, to LTL 7.2 million.
Lietuvos Zinios

Arvi Kalakutai boosts sales
Marijampole-based company Arvi Kalakutai posted the sales of LTL 23.7 million over the three quarters of this year, a rise of 54.4 percent since the same period in 2005. The turkey sales in the Lithuanian market grew 68.3 percent, while exports soared 20.6 percent in the respective period. Audrius Banys, director of Arvi Kalakutai, says that the sales in Lithuanian market show a significant raise of turkey popularity among the consumers.
Arvi Kalakutai is the first and the only specialised turkey growing, slaughter and processing company in the Baltics.
Verslo Zinios, Respublika

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