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Lithuania Business News: Archive 2003-2006

WEEK 51.2006

Saturday, 23rd of December

PKN Orlen to offer LTL 10.25 to buy out remaining shares in Mazeikiu Nafta
Polish oil concern PKN Orlen will offer LTL 10.25 per share of Mazeikiu Nafta within the framework of an official tender offer to buy out the shares of the sole Baltic oil refining and transportation complex. The official tender offer will be implemented from January 2 till January 15. PKN Orlen also said in the official tender circular that it was considering the buyout of new shares in Mazeikiu Nafta that would be issued after the integration of Mazeikiai power plant into the oil complex.
Lietuvos Rytas, Respublika

Lithuanian insurance market up 37 percent in January-November
The Lithuanian insurance market grew by 37.3 percent in the first eleven months of this year from a year earlier to reach LTL 1.291 billion. The non-life insurance market increased by 32.1 percent year-on-year to LTL 918.093 million, accounting for 71.1 percent of all premiums written. The life insurance market soared by 51.9 percent to LTL 372.455 million.
A total of 3.826 million insurance contracts were concluded during the eleven-month period, up 16.7 percent year-on-year. Insurance companies paid out a total of LTL 430.036 million in claims in eleven months, 26.9 percent more than in the same period a year ago. Non-life insurance claims payouts increased by 28.5 percent to LTL 399.139 million, while life insurance claims payouts were up 9 percent to LTL 30.897 million.
Respublika

New store
Retail trade company VP Market opened a new store Maxima XX in Radviliskis on December 22. The company invested over LTL 10.5 million. This is the third and biggest store of VP Market in the town where two stores Maxima X operate at the moment.
Lietuvos Rytas

Friday, 22nd of December

Lithuanian companies boost pretax profits by 28 percent
Aggregate pretax profits of Lithuanian companies soared by 28 percent in the first nine months of this year from the year earlier to reach LTL 7 billion. The combined pretax profit in the energy sector surged by 1.9 times, services sector - 1.5 times, and construction, trade and transport sectors - 1.4 times in the reporting period. Corporate revenues on goods and services sold in the reporting period rose by 23 percent, to LTL 107 billion. The revenues in the business services and construction sectors soared by one-third, industry, transport, hotels and restaurants - by almost one-fourth.
Business services companies, post and telecommunications sector recorded the highest profitability rate, above 20 percent, followed by hotels and restaurants with 10 percent, construction and energy with 9 percent, industry with 5 percent and trade with 4 percent.
The average profitability stood at 6.6 percent in July-September, 0.9 points lower versus the year-earlier.
Kauno Diena, Respublika, Verslo Zinios

Hermis Capital launches aviation business
HC Airways, a subsidiary company being established by the Lithuanian investment house Hermis Capital, has already acquired an airplane designed to service businessmen and high-ranking officers. The plane was currently used for the needs of the company, Darius Janulevicius, Hermis Capital CEO, said. However, the aircraft would launch charter flights as soon as the company obtained an air carrier's certificate.
"In my opinion, the demand will be greater in Latvia, Poland and other neighbouring countries. Currently we have one plane Premier 1. If necessary, we will acquire more planes," Janulevicius said.
Lietuvos Rytas

Housing prices continue their rise in Lithuania
Despite slower growth of Lithuania's real estate market, the prices of housing in the country continue their rise. However, the purchase of apartments and own houses declined in Vilnius, the leader of national residential construction market.
Housing prices rose by 6.5 percent across Lithuania and by 7.1 percent in Vilnius in the third quarter of 2006 compared with the earlier quarter. Excluding Vilnius, the housing prices in the country soared by 12.9 percent in the reporting period.
The average housing area sold in July-to-September expanded by 6.9 percent, while in Vilnius the average shrank by 7.2 percent.
Kauno Diena, Lietuvos Zinios, Verslo Zinios

Thursday, 21st of December

Teva aims to invest over LTL 100 million in Lithuania for more effective competition with Sanitas
Teva, the largest global generics producer and the owner of Lithuania's biotechnology plant Sicor Biotech, aims to plough over LTL 100 million into the production of biotechnology medicines in Lithuania by 2010. Moreover, Teva aims to expand the range of generic medicines produced in the country, thus seeking to put more competitive pressure on Sanitas, the largest Lithuania's generics maker controlled by the investment house Invalda and well-known foreign investment funds.
"Compared with Teva, which aims to offer a wide range of generic medicines to Lithuania and other Baltic countries, Sanitas is a small company, which holds several percent of domestic medicines market. However, the efforts to be undertaken by Teva will have their effect since the company will offer a much wider range of generics," Vladas Algirdas Bumelis, CEO of Teva Baltic and Sicor Biotech, said.
Teva group would seek to boost the marketing of its products in Poland, the Czech Republic, Slovakia, as well as Russia, Belarus, Kazakhstan, other CIS members. Teva would not build a generics plant in Lithuania, as it would invest into the country's pharmaceutical biotechnology.
Lietuvos Zinios, Verslo Zinios

Lithuania to launch milk quota trading, leasing in 2007
Lithuania will launch trading and leasing of milk quotas in the next quota year running from April 1, 2007. Quotas may be traded at an auction to be held three times a year. The rules of the auction will be published in the nearest time. Quota lease will be agreed by producers, which shall register the deal with the local authority upon the completion of required application. The lease deal will be subject to certain restrictions, including the prohibition to terminate the deal in the middle of a quota year.
Lietuvos Zinios, Respublika, Verslo Zinios

Production of vodka
The production of vodka and liqueur as well as sparkling wine grew by 20.6 percent to 1.037 million decalitres and by 17 percent to 231.5 thousand decalitres respectively in Lithuania over the nine months of this year. Though production of vodka increased most of all this year, the exports of this production soars very insignificantly.
Lietuvos Rytas

Wednesday, 20th of December

PKN Orlen to invest USD 700-900 million into Lithuanian refinery
Polish oil concern PKN Orlen aims to plough USD 700-900 million in the just-acquired Mazeikiu Nafta, the sole Baltic oil refining and transportation complex, PKN Orlen CEO Igor Chalupec said in an interview.
The refinery, ravaged by fire in October, should achieve full production capacity during the next 6 to 9 months while its full integration with the PKN Orlen concern would take some 2-3 years, Chalupec said.
Asked about oil deliveries to the refinery Chalupec stressed that this was not the biggest problem. "There are scores of oil suppliers...while the diversification of directions of oil supplies is one of the goals," said Chalupec adding that the functioning of the refinery is possible without Russian oil.
The Orlen CEO said that the biggest receivers of Mazeikiu products are the American and Western Europe markets from which the company does not want to resign. Chalupec also confirmed earlier statements that now the concern will focus on acquiring oil fields.
Lietuvos Zinios, Kauno Diena, Lietuvos Rytas, Verslo Zinios

Ukio Bankas investment group failing to take over Croatia's aluminium plant
Lithuania's Ukio Banko Investicine Grupe, controlled by Ukio Bankas owner Vladimiras Romanovas, has failed to acquire Croatia's aluminium plant TLM. Croatia's Privatization Fund has rejected the bid of UBIG, the sole bidder in the tender, since the offer has been conditional and failed to meet the prescribed terms.
UBIG offered LTL 23 million for the 80 percent stake in TLM. The investment group also said it would retain all 1,400 jobs at the plant.
UBIG, which launched business back in 1998, owns Birac alumina refinery in Bosnia and Herzegovina. Currently the group is pursuing business in Lithuania, Russia, Ukraine, Bosnia and Herzegovina, Belarus, Tajikistan and Scotland.
Lietuvos Zinios, Lietuvos Rytas

City Service seeks to expand business in St Petersburg
City Service, a property maintenance and development subsidiary of Lithuania's Rubicon Group, aims to further expand business in St. Petersburg and claims to be the largest private company on the apartment building maintenance market in that city. The company says to maintain apartment buildings with the overall area of 1.5 million square meters in St. Petersburg. The total area of apartment buildings in that city currently stands at 60 million square meters. In 2007 City Service would expand the total apartment building area under maintenance in St. Petersburg to approximately 3 million square meters, and to further 5 million square meters in 2008, Zilvinas Lapinskas, City Service CEO, said in a statement.
City Service entered the St. Petersburg market late in summer as it acquired an apartment block maintenance company Repairs and Building Company in Russia's second city at an auction for LTL 660,000.
Lietuvos Zinios, Respublika

Tuesday, 19th of December

Lithuania's government distributing receipts on sale of Mazeikiu Nafta shares
Lithuania's government aims to channel LTL 700 million, or almost one-third of receipts on the sale of 30.66 percent stake in Mazeikiu Nafta, to the residential savings restoration program in 2007. Some LTL 481 million would be earmarked for various public investment schemes, while the remaining LTL 1.1 billion should be assigned for investments, according to latest projections.
The restoration of savings' scheme would benefit additional LTL 146 million from the state budget in 2007. Payments to depositors should be launched in February 2007, and the settlement process should be wrapped up by 2009.
In 2008 the remaining LTL 1.1 billion in receipts on the offloading of interest in Mazeikiu Nafta should be distributed in the following way: LTL 289 million should be assigned for final restoration of residential deposits, approximately LTL 280 million - for the funding of various government schemes, and the remainder should placed into the reserve, the officer noted.
The state still owes LTL 975.9 million for the last - the fourth group of depositors. Lietuvos Zinios, Lietuvos Rytas, Respublika, Verslo Zinios

Alytaus Tekstile appoints new CEO
Valdas Araminas, former CFO of Drobe, the Kaunas-based wool company controlled by Plaza corporation, has been appointed the chief executive office of financially-troubled cotton textile manufacturer Alytaus Tekstile.
Araminas, 48, worked for Drobe from 1981 till October, 2006. His record of work at the wool company includes the jobs of engineer/economist, chief economist, head of planning department, deputy CEO, supply and logistics director and CFO. In 1992 Araminas was appointed to the board of Drobe.
Respublika, Lietuvos Rytas, Verslo Zinios

Government sets up task group to work out peace agreement with Svenska
Lithuania's government has set up a task group authorized to negotiate a peace agreement with Sweden's Svenska Petroleum Exploration, which the Copenhagen arbitration has awarded almost USD 12.6 million in damages to be paid by the government and Lithuania's oil production company Geonafta. The group is headed by Paulius Koverovas, State Secretary at the Ministry of Justice. The task group also includes some lawyers of the State Property Fund (SPF), which represents the government in these proceedings.
The arbitration court awarded USD 12.579 million in damages to Svenska in late October 2003, some 40 percent of the amount of USD 31 million, which the Swedish company claimed initially. The London Court of Appeals and a German court have already upheld the arbitration ruling. The decisions by the courts of Germany and UK are not binding in Lithuania. A final decision on whether to enforce the arbitration award rests with the Lithuanian Court of Appeals.
Lietuvos Rytas, Verslo Zinios

Monday, 18th of December

VP Market opens first round-the-clock supermarket in Vilnius
One of Maxima supermarkets in Vilnius has switched to work round-the clock on Friday. "Lithuania currently lacks stores with a diversified merchandise mix that would work all night. Meanwhile, over a half of residents polled in the whole country and the capital in particular admitted they would favour a round-the-clock supermarket strongly," Viktorija Jakubauskaite, VP Market spokeswoman, said. VP Market currently has no plans to extend the working hours of its other stores.
Verslo Zinios

Hungary to hold talks with flyLAL in Malev sale
Hungary's state privatization agency APV has said that it will hold talks with Lithuania's flyLAL Group and two other foreign bidders on the sale of the national airline Malev. flyLAL Group, which is said to have bid the lowest price for the air carrier, EUR 120 million, will compete with Russia's AirBridge, which is supported by AirUnion, and Irish Aer Lingus. Gediminas Ziemelis, one of the heads of flyLAL Group, claims that Lithuanian proposal is the best to Hungary. According to him, connective flights from Vilnius to the US and European countries could be offered upon purchase of Malev.
Lietuvos Zinios

Alita has the biggest share of sparkling wine market
Alita controlled 79 percent of the Lithuania’s sparkling wine market in the January-to-September period. This is the biggest market share among Lithuanian sparking wine producers and importers. Alita exports production to Latvia, Great Britain, Ireland, Denmark, United Arab Emirates, Spain and the US. Alita posted LTL 15.825 million audit net profit last year. The company forecasts a profit decline of 17.9 percent to LTL 13 million this year.
Lietuvos Zinios

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