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Lithuania Business News: Archive 2003-2006

WEEK 50.2006

Saturday, 16th of December

Achema starts up new ammonia plant
Achema, Lithuania's fertilizer and chemicals manufacturer, part of Achema Group, has launched production at the ammonia shop, the largest and most expensive facility developed under the investment program of the company.
"In technological terms, this is an absolutely autonomous shop producing raw stuff for nitrogen fertilizers, a plant in a plant, so to speak," Bronislovas Lubys, Achema Group president, said.
The output of ammonia would double, to 1.1 million tons per year, after the new shop reaches its design capacities. Investments into the new shop totalled LTL 300 million. In line with the draft produced by Ukraine's institute Chimtechnology, some installations and machines were assembled from parts made available by shut plants in Russia. Other installations were manufactured in the Czech Republic, the Netherlands, France and the US.
A year ago Achema launched its second investment program, which envisages the investments of LTL 0.5 billion by 2009.
Lietuvos Zinios

Lietuvos Gelezinkeliai to purchase two double-deck trains
Lietuvos Gelezinkeliai, the state-run railway operator, will acquire two double-deck trains - the first in Lithuania's railway history - from CKD Vagonka, a unit of Czech concern Skoda, for LTL 62.15 million.
All electric trains currently operated by Lietuvos Gelezinkeliai are older than 30 years.
Double-deck trains will be the first in the Baltic countries as well. The new trains are expected to take up the route Vilnius-Kaunas late in 2008. The trip from the capital to the second largest Lithuania's city should take approximately 50 minutes.
Respublika

Sale of Mazeikiu Nafta sealed officially in Vilnius
The sale of Mazeikiu Nafta, the sole Baltic oil refining and transportation complex, to the Polish oil concern PKN Orlen was closed at an official ceremony in Vilnius on Friday. The transaction lifted a "deadly threat" of a competing concern "setting up" in Mazeikiai, Igor Chalupec, new chairman of the Lithuanian oil complex, said at the ceremony.
"This transaction will see the creation of the largest Eastern European fuel concern, which has a potential for further expansion. We have escaped a deadly threat of a competing concern setting up in Mazeikiai and have created a model of energy security for other Polish companies, disclosed the possibilities they have for expansion," Chalupec pointed out.
Respublika, Lietuvos Zinios, Lietuvos Rytas, Kauno Diena

Friday, 15th of December

PKN Orlen, Yukos International clinch deal on controlling interest in Mazeiku Nafta
The Dutch-registered Yukos International UK and Polish oil concern PKN Orlen have concluded a deal on the purchase and sale of 53.7 percent of Mazeikiu Nafta. A total of 53.7 percent of the sole Baltic oil refining and transportation complex, changed hands on the Vilnius Stock Exchange (VSE) via a block trade, the largest ever in VSE history, on Thursday at approximately 1 p.m. On Friday PKN Orlen should acquire further 30.66 percent of the Lithuanian oil complex from Lithuania's government.
"The procedures and the steps of closing the deal are going on as scheduled. We have not encountered any hurdles that would prompt us to make any adjustments," Economy Minister Vytas Navickas said.
The funds for the shares held by Yukos International UK should be transferred on Friday, December 15, at approximately 1 p.m., and the money due for the government's shares - at approximately 3 p.m. on the same day.
The settlement between PKN Orlen and Yukos International UK is the last condition required for the Polish concern to close the deal with the government.
The 53.7 percent stake in Mazeikiu Nafta was sold for LTL 3.883 billion or approximately LTL 10.22 per share with a face value of LTL 1.
Lietuvos Zinios, Lietuvos Rytas, Respublika, Kauno Diena, Verslo Zinios

Lithuania may expect over EUR 1.263 billion in support from EU funds in 2007
Lithuania may obtain over EUR 1.263 billion in support from the EU funds should it use up all options set out in the EU 2007 budget. The next year EU budget, passed by the European Parliament earlier on Thursday, offers Lithuania and other EU newcomers better chances to use the support extended by the EU Cohesion Fund and structural funds.
"Such a financial injection, if invested prudently, may give Lithuania an impressive impetus - the country only has to choose the direction," Dalia Grybauskaite, the EU Commissioner for Financial Programming and Budget, said in a statement.
The 2007 budget was just the start of new Financial Perspective, she noted. Later the support would grow further, with the total amount Lithuania might obtain in 2007-2013 being EUR 10.7 billion or almost 6.5 percent of gross national income (GNI). Lietuvos Zinios, Kauno Diena, Respublika, Lietuvos Rytas, Verslo Zinios

Further LTL 136.3 million to flow into Lithuanian pension funds
The Lithuanian State Social Insurance Fund Board (Sodra) transferred approximately LTL 136.3 million to the second-pillar pension funds on Thursday, some 6.6 percent or LTL 8.4 million more than it channelled in September. The money represents contributions by 685,400 people who chose to join private pension plans in 2003-2005. As of October 16 data, additional 99,900 people have joined the scheme this year.
Lietuvos Rytas

Thursday, 14th of December

FDI flow in Lithuania up 10 percent
Foreign direct investment flow in Lithuania reached LTL 2.5 billion in the first ten months of this year, an increase of 10.5 percent from a year earlier. Taking into account direct investment by domestic companies abroad, net FDI inflow amounted to LTL 129.1 million in October and totalled LTL 1.57 billion in the ten-month period.
Kauno Diena

Lithuanian government decides where to invest money from Mazeikiu refinery sale
The Lithuanian government has made up its mind about where it will invest USD 852 million it will receive for its 30.66 percent stake in the Mazeikiu Nafta refinery.
"Two weeks ago, we took the decision where to put the money, in what paper, so that to prevent losses from currency fluctuations. I cannot disclose any details because it is a commercial secret. We will do all we can to ensure that we suffer no loss," Prime Minister Gediminas Kirkilas said.
He said that, under the law, two-thirds of the proceeds should go to compensate for lost ruble savings by late 2008.
Finance Minister Zigmantas Balcytis said that the money would be deposited in an account at the Bank of Lithuania for a month after the sale is completed at an annual interest rate of at least 5 percent. That should earn around LTL 9 million in interest during the month, while in January, the US dollar's value against the litas is expected to rise.
Lietuvos Zinios, Verslo Zinios

The best exporters were awarded
Lithuania’s export prizes were granted to the heads of the companies Audejas, Lifosa, Trivilita, Utenos Trikotazas, Western Shipyard as well as to Saulius Gudeliauskas, editor of magazine and internet website Made in Lithuania this year. Edidija Vaicekauskiene, director of meat processor Nematekas, received the Businessperson of the Year Award. The aim of the contest is to encourage exports of Lithuanian goods.
Lietuvos Zinios

Wednesday, 13th of December

Behrens Corporate Finance steps on Lithuania's market
Iceland's investment bank Behrens Corporate Finance has set up an office in Vilnius, which will focus on the representation and consulting of Nordic customers over the purchase of companies active on Lithuania's market.
"We represent strategic investors that pursue long-term business visions and seek to set up on a new market for long," Domas Kacinskas, a partner of Lithuania's unit of Behrens Corporate Finance, said in a statement.
Behrens Corporate Finance, established in Iceland back in 2003, currently operates offices in Rejkjavik (Iceland), Riga (Latvia) and Vilnius.
Lietuvos Zinios, Verslo Zinios

Alita sets up office in Latvia
Alita, the management-controlled spirits producer, has established a representative office in Latvia. Vytautas Junevicius, Alita CEO, said that the company needed an office in Latvia as it pursued closer cooperation with partners in the neighbouring country and sought to analyze the market situation.
Lietuvos Rytas

HICP inflation at 0.8 percent
Lithuania's average annual inflation rate, as measured by the EU Harmonized Index of Consumer Prices (HICP), stood at 3.7 percent in November. Consumer prices contracted by 0.8 percent in November from October. The 12-month inflation rate, compared with November 2005, was 4.4 percent.
The HICP-measured average annual inflation rate is 0.1 percentage point higher than that measured by the national consumer price index, while the monthly and year-on-year inflation rates are the same.
Verslo Zinios, Respublika

Tuesday, 12th of December

Almost one-fifth of Lithuanian population live in poverty
Some 615,000 residents of Lithuania, or 18 percent of the country's population, lived in relative poverty in 2005. Most of those living in poverty were persons living alone and maintaining children (45.6 percent) as well as parents with three or more children (39.3 percent), Statistics Department Director General Algirdas Semeta said, citing preliminary data.
Some 8.9 percent of working persons, 58.9 percent of unemployed people and 10.1 percent of pensioners lived in relative poverty.
He noted that there was a 6-fold difference between people earning least and those with highest incomes in Lithuania, LTL 223 and more than LTL 1.35 thousand respectively.
A survey suggests that poverty in Lithuania is transferred from generation to generation.
One family's incomes in Lithuania in 2004 stood at LTL 1,287. Some LTL 835 are needed to satisfy usual needs of a solitary person, a family with three children would need LTL 380 per person per month.
Kauno Diena, Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios, Respublika

Limarko Shipping strikes deal with banana trader Excelban
Limarko Shipping, Lithuania's operator of reefer fleet, has concluded a one-year cooperation deal with the Germany's Excelban, the leading banana trader.
The deal will guarantee modern M/Vs Uranus and Pluto, which were acquired in January, running at maximum capacity throughout 2007. A long-term contract will secure high profit margin of these ships and guarantee stable revenues of the company. Under the agreement with Excelban, the M/Vs of Limarko Shipping would ship bananas originating from Equador to North, Baltic, Mediterranian and Black Sea ports.
Respublika, Lietuvos Zinios

New plant of Sanitas to come on line one year behind original schedule
Sanitas, generics producer, aims to open new Kaunas plant early in 2008, a year later compared with the original schedule, since the company has ruled to equip the new facility with a disposable glass syringes production line.
"We seek to follow trends and manufacture the product that is ever gaining in popularity in Western Europe - disposable glass prefilled syringes," Saulius Jurgelenas, Sanitas CEO, said.
The project value of new Sanitas plant exceeds LTL 40 million, including LTL 16.2 million extended in structural assistance of the EU.
Lietuvos Zinios, Verslo Zinios

Monday, 11th of December

Exports rise 23.1 percent, imports up 26 percent
Lithuanian exports grew by 23.1 percent to LTL 32.47 billion in the first ten months of 2006 from a year earlier. Imports rose by 26 percent to LTL 43.6 billion. The foreign trade deficit for the ten months widened by 35.3 percent year-on-year to LTL 11.131 billion, according to preliminary data based on customs declarations and Intrastat reports. In October alone, exports rose by 5.8 percent from a year earlier, while imports soared by 9.7 percent.
Verslo Zinios, Respublika

Assets of SEB Vilniaus Bankas surge by one-third
The assets of SEB Vilniaus Bankas soared by 33 percent over the first eleven months of 2006, to exceed LTL 20 billion as of early December. The assets of the banking group doubled in two years time. The loan portfolio of the bank soared by 39.1 percent, year-on-year, to LTL 12.3 billion, while the total amount of deposits rose to LTL 8.99 billion by the end of September.
Verslo Zinios

Hansabankas' analysts issue hold recommendation on stocks of Alita
Hansabank Markets, the financial markets division of Hansabankas, has issued a "hold" recommendation on the shares of Alita, putting the actual share value of the Lithuanian sparkling wine producer at LTL 4.1. In the opinion of Hansabank Markets analysts, the profit margin of Alita exceeds the respective figures of the majority of alcohol producers of the region. However, the company may fail to retain the margin in future on the back of growing competition and operational expenses.
Verslo Zinios

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