||Lithuania Business News: Archive 2003-2006
Saturday, 11th of November
Lithuania's government concerned over Polish authorities' move to suspend production at Jelfa
Lithuania's government is concerned over the decision of Polish Chief Pharmaceutical Inspector to suspend the production at Jelfa, the pharmaceutical plant controlled by Lithuania's generics producer Sanitas, and is awaiting the explanations of Polish authorities over the current circumstances.
"We are extremely concerned over the situation and are trying to set all things clear via diplomatic channels. The Lithuanian embassy in Poland has been instructed appropriately. Now we are awaiting responses from relevant Polish authorities," Gediminas Kirkilas, Lithuania's Prime Minister, said.
Polish Chief Pharmaceutical Inspector announced his decision to suspend the production at Jelfa on Thursday evening as the scandal over faulty medicine produced by Jelfa last year gained momentum. Some Polish policy makers have already declared that Sanitas has been covering unnamed Russia's companies and their interests. They also doubt whether the decision to sell Jelfa to the Lithuanian company has been right.
"We have not questioned the demands of Polish Chief Pharmaceutical Inspector and implemented all of them, we have suspended the production. However, we think that this measure is incorrect and groundless, and we ask to have it removed immediately," Saulius Jurgelenas, Sanitas' CEO, said.
Indignant with attempts to turn the incident political on the eve of Polish municipal elections due this weekend, Jelfa's trade unions staged a protest on Friday.
Lietuvos Rytas, Kauno Diena, Lietuvos Zinios
Ragutis ordered to withdraw Estonian-made juice drink
Lithuanian brewery Ragutis, which is owned by Finland's Olvi, has been ordered to withdraw from the market an Estonian-made orange and nectarine juice drink that is not safe for consumption, the Kaunas State Food and Veterinary Service said. Ragutis, which distributes the product in Lithuania, has 20 days to appeal against the decision, it said. The juice drink, manufactured by Estonia's Tartu Olletehas and sold in 1.5-liter plastic bottles, was found to contain an excess amount of benzoic acid. Lietuvos Zinios, Kauno Diena, Respublika
Plastic bag business in airports
The tightened rules for hand luggage have appeared too costly for Lithuanian airports, which have decided to sell plastic bags used for carry-on luggage containing liquid. Since last Monday, airplane passengers whose carry-on luggage contains any amount of liquid are required to be placed in see-through plastic bags. The regulations took effect at all airports of the EU. However, Lithuania is the only country that sells the plastic bags instead of offering them to passengers free of charge. Passengers departing from the Palanga airport are already requested to pay for the plastic bags. Administrations of Kaunas and Vilnius airports plan to sell plastic bags as well. Lietuvos Rytas
Friday, 10th of November
LAL changes name
Lietuvos Avialinijos (Lithuanian Airlines or LAL), the largest Lithuania's carrier, aims to change the trade name into flyLAL-Lithuanian Airlines. Until now the company used flyLAL as its trademark.
"The company seeks to retain a reference to Lithuania in its name. This is a good way to promote our country and reflect the carrier's wish to expand Lithuania's aviation business," Arunas Griskenas, Lietuvos Avialinijos CEO, said in a statement.
LAL aims to complete the procedures required for the change of company's name coming week.
Lietuvos Zinios, Respublika, Lietuvos Rytas
Lithuanian refinery CEO keeps job, 4 board members resign
The management board of Lithuania's Mazeikiu Nafta refinery on Thursday did not held a vote of no-confidence in the chief executive officer, Paul Nelson English, as three members representing the government were not present at the meeting. Four members representing Yukos tendered their resignations to the board.
"We saw no need to discuss the CEO's dismissal. I think it would be good if the supervisory board appointed new members of the management board. I expect that Yukos International will take the appropriate measures to replace the four board members with new members," Saulius Specius, an aide to the Lithuanian prime minister, said.
Lietuvos Zinios, Kauno Diena, Lietuvos Rytas, Respublika, Verslo Zinios
RST power grid mulls joining new N-plant project
While investors are waiting for the government's decision on whether it will privatize the power distribution grid operator Rytu Skirstomieji Tinklai (RST), the idea has been floated that the company could take part in a project to build a new nuclear power plant in Lithuania.
"A feasibility study (for the RST privatization) is currently underway and should be completed in December. It will contain proposals for the future of the company. These include, by the way, a proposal that RST could be Lithuania's contribution to a new atomic power plant," Prime Minister Gediminas Kirkilas said.
Saulius Specius, an aide to the prime minister, said that RST, as a state-owned company, could join the project as a shareholder, along with the state-run power transmission company Lietuvos Energija, and thus enhance Lithuania's financial contribution.
"This is one of the ideas how to enhance our participation in this project, since both Latvenergo and Eesti Estonia are integrated companies and have distribution operations. That makes their financial position stronger," he said.
Lietuvos Energija CEO Rymantas Juozaitis said that RST's possible participation in the project was being considered, but final decisions would be made by the government.
Lietuvos Rytas, Lietuvos Zinios
Thursday, 9th of November
Rest in rural farmsteads
64 percent of Lithuanians go to rural tourism farmsteads to have a rest, 47 percent - to celebrate holidays and 11 percent to participate in seminars, the poll of RAIT has revealed. Older people with higher income, more often women than men, prefer holidaymaking in countryside farmsteads. Young people with lower education and smaller income usually come to rural farmsteads to celebrate holidays.
Lietuvos Rytas, Lietuvos Zinios
Polish plant of Sanitas likely to avoid losses on faulty medicine
Jelfa, the Polish pharmaceutical plant controlled by Lithuania's generics maker Sanitas, should avoid losses on a mistake made while producing Corhydron, the anti-allergy and anti-asthma drug, which is currently being recalled from the market. Meanwhile, Sanitas, which spent over LTL 550 million for the purchase of Jelfa, plunged LTL 7.51 percent, to LTL 14.4 on the Vilnius Stock Exchange in the wake of the report about the recall.
"Laboratory tests of this drug revealed a fault in one of ten samples. The medicine was manufactured in July 2005 and the major part of that batch has already been consumed successfully. According to our data, only 2.5 packages of this medicine are left on the market," Saulius Jurgelenas, Sanitas' CEO, said.
The medicine recall procedure was launched on October 31, Jurgelenas said.
The laboratory tests had revealed traces of Chlorsucillin, a potentially life-threatening product used in surgery, in the tested batch of Corhydron ampoules.
Lietuvos Rytas, Verslo Zinios, Respublika
Lithuania opposes EU's proposed tax increase on alcohol
Lithuania did not support the European Commission's proposal to increase the minimum excise duty rates on alcoholic drinks at the Ecofin meeting in Brussels on Tuesday. EU finance ministers failed to agree on the proposal and will try again to achieve a compromise on the minimum tax rates at their next meeting in late November. The proposal called for a 31 percent increase in the minimum excise duty rates on ethyl alcohol and alcoholic beverages.
If the Commission's plan were approved, the excise duty on beer in Lithuania would rise by around 20.6 percent, or LTL 0.04 per half a litre of beer.
Wednesday, 8th of November
EC clears PKN Orlen's acquisition of Mazeikiu Nafta
The European Commission on Tuesday gave the green light for the Polish oil group PKN Orlen to acquire up to 100 percent of shares in Mazeikiu Nafta refinery.
"The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the Lithuanian oil refinery Mazeikiu Nafta by the Polish petroleum company PKN Orlen. The Commission concluded that the operation would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it," the EU's executive body said.
The Commission said it had analyzed the impact of the transaction on the EEA market and on the narrower Central and Eastern European market and concluded that "irrespective of the geographic size of the market, the combined market shares of the parties would not be sufficient to significantly impede effective competition".
Both companies only have downstream oil activities, including crude oil refining, marketing and distribution, and neither of them is active in upstream oil activities, such as the exploration, development, production, shipping or sale of crude oil, it noted.
The companies' activities overlap on the market for sales of diesel, gasoline and liquefied petroleum gas.
Kauno Diena, Respublika, Lietuvos Rytas, Verslo Zinios, Lietuvos Zinios
Lithuanian beer market grows
The Lithuanian beer market grew by 5.7 percent to 231.21 million litres in the first ten months of this year from a year earlier. Svyturys-Utenos Alus posted a 6.1 percent growth in beer sales for January-October to 111.86 million litres. Its market share widened to 48.38 percent. Kalnapilio-Tauro Grupe raised its market share to 25.16 percent, as beer sales for the ten months jumped by 11.2 percent to 58.17 million litres.
Lietuvos Zinios, Lietuvos Rytas
Lithuanian unemployment down to 3.2 percent in October
Lithuania's unemployment rate edged down by 0.1 percentage point in October versus September, to 3.2 percent. The number of officially registered unemployed people was 68,200 as of November 1, a decline of 14,000 or 17 percent compared with the year earlier. The highest unemployment rates were in the districts of Akmene (8 percent), Lazdijai (6.9 percent) and Druskininkai (6.6 percent), while the lowest were in the districts of Elektrenai (0.8 percent) and Trakai (0.9 percent), as well as Kretinga (1.5 percent). Among major cities, the unemployment level ranged from 2.2 percent in Siauliai and Kaunas to 5.3 percent in Panevezys.
Lietuvos Zinios, Respublika, Verslo Zinios
Tuesday, 7th of November
PKN Orlen seeking for fast completion of deal over Mazeikiu Nafta
PKN Orlen has assured Lithuania's government that the Polish oil concern would seek to complete the purchase of Mazeikiu Nafta as soon as possible after the European Commission (EC) issues its permission for the deal to proceed. Moreover, PKN Orlen would not review the negotiated price of the transaction, Lithuania's Economy Minister Vytas Navickas said after the Monday's meeting with PKN Orlen president Igor Chalupiec.
Chalupiec voiced his expectations that the permission of the EC would be obtained on November 7 or several days later, and the deal would be finalized by the end of the year. He assured that the concern would seek for fast completion of transactions with both Yukos International UK and the Lithuanian government.
"We should obtain a report with the conclusions of our experts on the causes of recent fire at Mazeikiu Nafta - this report would be added to other documents to be submitted to the banks funding the transaction. I hope that the conclusions are satisfactory and the funding agreements are signed as soon as possible," Chalupiec said.
Kauno Diena, Lietuvos Zinios, Verslo Zinios, Lietuvos Rytas
SEB Vilniaus Bankas to boost share capital by LTL 880 million
SEB Vilniaus Bankas plans to increase its share capital from reserves by LTL 880 million, raising the nominal value of one share from LTL10 to LTL 67. SEB Vilniaus Bankas said its shareholders would vote on the capital increase proposal at the general meeting on November 16.
The bank currently has a share capital of LTL 154.414 million. The bank is 98.99 percent owned by the North European financial services group SEB.
Pirated software traced down in Lithuania
Lithuanian law and order authorities detected LTL 320,000 worth of unlicensed software during 18 raids in the first half of 2006.
"In most cases unlicensed software is installed by the salespersons of software and hardware vendors who are thus trying to curry favour with the customers. However, such actions harm the company itself and its reputation," said Edita Ivanauskiene, a lawyer with the lawyers' firm Pranckevicius Ir Partneriai.
Monday, 6th of November
Lithuanian bank card market grows 13 percent this year
The total number of payment cards issued by Lithuanian banks reached 3.5 million as of October 1, a rise of 13 percent compared with the start of the year. The aggregate turnover of cards grew by 28.5 percent year-on-year to LTL 18 billion.
Credit cards accounted for only 6.3 percent of the total number of payment cards as of early October, an increase of 5.9 percent from the start of the year.
Hansabankas held a 34.1 percent share of the payment card market. SEB Vilniaus Bankas was second with a 31.7 percent market share. Snoras remained in third position with a 20.7 percent of the market, and DnB Nord was fourth with an 8.4 percent market share.
Bank of Lithuania forecasts strong GDP growth, rising inflation
The Bank of Lithuania forecasts that the country's GDP growth will reach 8 percent this year but will decelerate to 6.7 percent next year. Growth in exports is forecast to reach 17 percent this year but slow down to 8.6 percent next year. Import growth is expected to decelerate as well, from 15.1 percent in 2006 to 6.7 percent in 2007. The country's foreign trade deficit is projected to reach 8.7 percent of GDP this year and narrow to 6 percent next year. The current and capital account deficit should decrease from 7.1 percent of GDP to 4.6 percent, respectively. The unemployment rate is expected to stand at 5.7 percent this year and fall to 4.9 percent next year.
Vilniaus Baldai boosts sales
Lithuanian furniture manufacturer Vilniaus Baldai posted sales of LTL 91.064 million for the first ten months of this year, up from LTL 89.259 million a year earlier. Sales for October fell by 10 percent to LTL 9.76 million compared to LTL 10.84 million since October 2005.
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