||Lithuania Business News: Archive 2003-2006
Saturday, 25th of November
A total of 1.5 million passengers went through Lithuanian airports during the ten months, up 24.6 percent year-on-year. The largest number of passengers flew to and from the United Kingdom, 275,600 or 18 percent. Further down the list were Denmark, 185,000 or 12.1 percent, Germany, 181,200 or 11.9 percent, and Ireland, 107,900 or 7.1 percent.
Mazeikiu Nafta adds four new members to its board
Four new members have been elected to the board of Mazeikiu Nafta, the sole Baltic oil refining and transportation complex being acquired by the Polish oil concern PKN Orlen. New members include Daniel Feldman, manager of Canada-registered international energy corporation Big Sky Energy Corp, Dariusz Formel, executive director of business organization department at PKN Orlen, Krystian Pater, PKN Orlen executive director for refining, and Paul Nelson English, Mazeikiu Nafta's CEO.
New members replaced four board members, including Mikhail Elfimov, Tomas Gizas, Vladislavas Paulius and Yury Kalner, all Jukos' representatives, who resigned on November 9.
The board comprising seven members also includes three government representatives. Kauno Diena, Lietuvos Zinios
Finance Ministry projecting slowdown of Lithuania's economic development
Lithuania will retain fast pace of economic development in mid-term, however, the growth will slow down in coming three years, the country's Finance Ministry projects.
The rise in GDP may reach 7.8 percent in 2006, while in 2007 the growth would slow down to 6.3 percent, in 2008 - to 5.3 percent, and in 2009 - to 4.5 percent. Previously the ministry only published its growth projections for 2006 and 2007. In 2006-2008 the inflation would be affected by soaring energy costs (the prices of imported gas will surge more than twofold by 2008, compared with the baseline of 2005), commitments to the EU to raise excise duties, compensation of residential deposits and real estate, as well as the rise in average wages. According to the ministry projections, the rise in the prices of natural gas would contribute some 0.9 percentage points to the inflation rate of 2006, while in 2007 the contribution would be some 1.7 percentage points (1.3 points owing to the rise in heating tariffs and 0.4 points resulting on the rise in the prices of gas used by households).
Friday, 24th of November
Finland's Finnfoam may pick Lithuania for new plant
Finnish insulation board manufacturer Finnfoam is planning to build a plant in one of the Baltic countries, possibly Lithuania. The company intends to begin construction next spring and complete the project in about a year's time. Finnfoam Chairman Jorma Nieminen was quoted as saying that the plant, which would enable the company to expand into central Europe, would most probably be built in Latvia or Lithuania.
Finnfoam currently has two representatives working in the Baltic countries.
Lithuanian insurance market up 35 percent
The Lithuanian insurance market soared by 35 percent in the first ten months of this year from a year earlier to reach LTL 1.146 billion. The non-life insurance market rose by 31.3 percent to LTL 830 million, accounting for 72.4 percent of the total premiums, while the life insurance market surged by 45 percent to LTL 316 million.
3.512 million insurance agreements were signed over the ten months of 2006, a rise of 17.1 percent since the respective period a year ago. 42.7 thousand insurance agreements were signed in the life insurance market. 31.2 thousand of them were investment life insurance agreements.
Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios
Kempinski hotel to open in Vilnius in early 2008
The AAA Kempinski Hotel Vilnius is expected to open its doors in the first quarter of 2008, the operator of the hotel, the AAA Group, said. It was announced earlier that the Kempinski luxury hotel in Vilnius was scheduled to open in the first half of 2007 and that AAA would invest over LTL 110 million in the building and its renovation.
Thursday, 23rd of November
Swiss AP Anlage & Privatebank entering Lithuania's market
Swiss-registered AP Anlage & Privatebank aims to enter Lithuania's market. The board of the Bank of Lithuania will on Thursday take a decision on a permission to head the representative office to be established by the bank in Vilnius.
Lithuania's banking market currently accommodates nine commercial banks, branches of two foreign banks and representative offices of three foreign banks. Further 124 banks registered in the EU Member States have obtained a permission to operate on Lithuania's market without setting up an office.
Earlier this week local media reported that Coutts bank, the third largest Swiss private banking institution, was considering the options for the expansion of private banking services in Lithuania. Moreover, Liechtenstein bank Alpinum may also opt to enter Lithuania's market.
Smoking restrictions in Lithuania boost takeout coffee sales
Takeout coffee, a new service available at Lithuanian cafes, is gaining popularity thanks to restrictions on smoking in public places serving food or drinks. Cili Kava cafes in Vilnius have seen takeout coffee sales almost double in a year.
Takeout coffee now accounts for around one-fifth of the cafes' total coffee sales, compared with one-tenth a year earlier, said Cilija Marketing Director Mindaugas Gumauskas
Starting May, restaurants, cafes and other public places where food is served must have separate smoking rooms. A full ban on smoking in public catering places will be introduced on January 1, 2007.
Lietuvos Zinios, Verslo Zinios
DnB Nord expects Lithuanian economy to slow in the fourth quarter
DnB Nord Bankas forecasts that Lithuania's economic growth, which slowed in the third quarter after rapid expansion in the first half of this year and the second half of last year, will remain steady or ease further in the fourth quarter. Rimantas Rudzkis, the chief analyst at DnB Nord Bankas, attributed the slowdown of economic growth to weaker export growth and the receding boom in the loan and real estate markets.
"The growth in the number of employed persons is likely to come to an end as well. The outlook for foreign direct investment flows is not encouraging either," Rudzkis said on Wednesday while presenting the bank's latest Economic Survey of Lithuania.
DnB Nord Bankas did not change its forecast of a 6.5 percent GDP growth for 2006, published at the start of the year. While admitting that this forecast might be somewhat too conservative, Rudzkis said that economic growth was unlikely to exceed 7 percent.
Lietuvos Zinios, Verslo Zinios
Wednesday, 22nd of November
Delano restaurant chain posts losses of LTL 251,210
Lithuanian self-service restaurant chain operator Delano posted almost LTL 1.762 million in losses for the full year 2005, up from losses of LTL 251,210 the previous year. Delano's sales increased by 7 percent to nearly LTL 37.989 million last year, from LTL 35.641 million in 2004, according to the company's 2005 financial report.
The restaurant operator said it incurred significant staff training, marketing and other expenses due to the opening of new outlets in 2005.
Up to 60 percent of Lithuanian urban population to have digital set-top boxes in 2012
Up to 60 percent of people living in Lithuanian cities and up to 40 percent of the rural population will have purchased set-top boxes to receive digital television broadcasts by 2012, when the country plans to start switching off analogue television, Balticum TV forecasts. However, the goal of digitalizing 50 percent of households over six years will hardly be achieved unless the authorities begin to subsidize the purchase of such devices, Balticum TV said in a statement.
"Budget funds must be earmarked to encourage users to go digital. Half of the Lithuanian population now has more than one TV set. In the switchover to digital content, a set-top box will be required for each TV set," said Balticum TV CEO Virginijus Jurgelevicius.
Ukio Bank to take EUR 38.5 million syndicated loan
Denmark's HSH Nordbank and Austria's Raiffaisen Zentralbank Osterreich are to extend a EUR 38.5 million syndicated loan to Ukio Bankas, the fast growing Lithuanian commercial bank. Some EUR 24.5 million part of syndicated loan would be provided for a year's term, while the remaining part would be extended for a year and a half.
Respublika, Lietuvos Rytas
Tuesday, 21st of November
Assets of Lithuania's state worth over LTL 35.1 billion
The assets of Lithuania's state, excluding the value of state land and mineral resources, exceeded LTL 35.1 billion as of late 2005. Non-financial assets owned by the state, excluding the land, explored mineral resources, museum valuables, made up LTL 19.378 billion as of late 2005, a rise of 5.8 percent or LTL 1 billion versus the year-earlier figure.
Financial assets, i.e. cash and deposits, securities, shares, other amounts receivable, loans, - rose by 3.6 percent or LTL 540.2 million over the year, to reach LTL 15.75 billion. The financial liabilities of the state and public institutions totalled LTL 17.5 billion as of late December. Other public liabilities made up LTL 2.477 billion.
Lietuvos Zinios, Lietuvos Rytas
Polish plant of Sanitas finally gets green light to start up ampoule shop
Jelfa, the Polish pharmaceutical company controlled by Lithuania's generics maker Sanitas, will shortly resume the production at its ampoule shop, the operations of which were suspended more than a week ago after the discovery of faulty anti-allergy and anti-asthma medicine Corhydron produced by the shop.
The Polish Pharmaceutical Inspection finally agreed to resume the operations of the ampule shop. Saulius Jurgelenas, Sanitas' CEO, confirmed that the company had been notified about the official decision of the inspection.
"Some technical arrangements shall be done on the line, thus the operations of the ampoule shop will be resumed during upcoming 24 hours. Perhaps the night shift could already work at the shop on Tuesday," Jurgelenas said.
Lietuvos Zinios, Lietuvos Rytas
Lithuania may scrap quotas on snail collection
Lithuania may remove restrictions on the number of edible snails that can be collected, the Environment Ministry, which now sets such quotas on an annual basis, said. New rules for the use of edible snail resources are expected to be approved in the near future, it said.
Selemonas Paltanavicius, head of the Biological Diversity Division at the Environment Ministry, said that the use of snail resources would be limited by setting time and size restrictions for snail collection and purchase.
Lithuanian snail processing companies, including Hesona, Arcia, Camargo, Balzuva ir Ko and Gudukas, were allowed to collect a total of 780 tons of snails this year. Snails can be collected in May and June. Unfavourable weather conditions prevented some of the companies from fully using the quota. Most snails collected in Lithuania are exported to foreign markets because there is no local demand.
Monday, 20th of November
Lithuania and Poland to sign electricity grid company deal within several weeks
Lithuanian and Polish officials did not sign founding documents of a new energy company to implement the project of an electricity grid between the two neighbouring countries but plan the signing procedure within the coming several weeks.
"The Polish side wants a more thorough examination of the shareholders' agreement and sign the documents as soon as possible - within the coming several weeks," Aurelija Trakseliene, spokeswoman for Lietuvos Energija, said.
The original plan was that the founding documentation would be signed by top executives of Lietuvos Energija and Polskie Sieci Elektroenergetyczne, in Warsaw on Saturday with participation of Lithuanian and Polish prime ministers, Gediminas Kirkilas and Jaroslaw Kaczynski.
However, the signing entry was excluded from the agenda of Kirkilas' visit to Poland due to the aspiration of the Polish side to take a more thorough look at the papers.
According to preliminary calculations, the merger of Lithuanian and Polish energy systems would cost about EUR 304 million.
SEB Vilniaus Bankas to boost share capital by LTL 880 million
Shareholders of SEB Vilniaus Bankas, Lithuania's largest bank by assets, have decided to increase the bank's share capital from reserves by LTL 880 million to LTL 1.035 billion and raise the nominal value of one share from LTL 10 to LTL 67. Since the share capital will be increased from reserves, the equity value and the market value of the share will not change.
SEB Vilniaus Bankas currently has a share capital of LTL 154.414 million. It was last increased by LTL 4.414 million at the end of 1999.
New economy-class hotel Martialis opened in Vilnius
Company Sporto Viesbutis has opened a new economy class hotel Martialis in Vilnius. The new 3-star hotel was settled in the reconstructed premises of Sportas hotel, Jolanta Baceviciene, Martialis' director, said. The hotel aims to achieve the sales of LTL 2.5 million and the occupancy rate of at least 50 percent in 2007.
"We have decided to open an economy class hotel after a thorough analysis of market needs in the capital, which has revealed the largest demand and growth outlook in this segment of Vilnius market," Baceviciene said.
She noted a growing trend that groups of tourists arriving to Vilnius by bus often opted for economy class hotels.
"Several groups are often willing to stay at the same hotel simultaneously. Martialis has 114 rooms and three conference halls," she says.
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