||Lithuania Business News: Archive 2003-
Saturday, 27th of January
flyLAL Group excluded from tender to buy Malev
flyLAL group, the operator of the largest Lithuanian air carrier, has lost the chance to buy Hungary's airline Malev after the country's privatization authority APV invited the other bidder, Russia's Airbridge, for final talks in the privatization.
Airbridge, which is associated with Russian businessman Boris Abramovich, has said that it has won the bidding and expects to sign a deal on the purchase of a 99.95 percent in Malev in the near future.
APV decided to cancel talks with flyLAL Group after the Lithuanian company failed to make the necessary amendments to its bid and to provide the necessary financial guarantees. flyLAL Group bid a lower price for Malev than Airbridge, but has made it clear recently that its quick financial injection in the loss-making Hungarian air carrier would be higher than that planned by Airbridge.
Lietuvos Zinios, Lietuvos Rytas
Net profit of Lithuania's Parex bank falls
Lithuanian bank Parex, which is owned by the Latvian financial group Parex, posted a net profit of LTL 4.433 million for the full year 2006, down 37.6 percent from LTL 7.1 million the previous earlier.
"The bank's financial results are in line with the targets set at the start of the year," Parex Chairwoman Alma Vaitkunskiene said.
Lietuvos Zinios, Respublika
Feeling of bankruptcy in Alytaus Tekstile
With the Lithuanian government expected to decide on the future of Alytaus Tekstile next week, the Vilnius Stock Exchange has placed the financially troubled cotton textile manufacturer Alytaus Tekstile on a "watch" status.
Economy Minister Vytas Navickas said on Friday that the government should make up its mind on the future of the state-controlled company in the coming week, adding that initiating a bankruptcy procedure could be an option.
It was announced earlier in the day that Deputy Economy Minister Vytautas Nauduzas was resigning as chairman of the management board at Alytaus Tekstile. He was appointed to this post just over a month ago.
The company's new managing director, Valdas Araminas, also submitted his resignation but later withdrew it.
Respublika, Lietuvos Zinios
Friday, 26th of January
Lithuania's alcohol market grows 7 percent in 2006
The sales of alcoholic beverages in Lithuania rose by 6.9 percent, year-on-year, to 404.2 million litres last year, while the rise of sales in value was even more impressive, at 10.1 percent, to LTL 4.5 billion. By 2011 the annual sales of alcoholic beverages in Lithuania will reach LTL 6.1 billion, to exceed the 2006 figure by 35.6 percent, the market research specialist Euromonitor International has projected based on the latest research data available.
In 2011 the alcoholic beverage consumption per capita is expected to reach 150 litres, a rise of 26 percent versus the 2006 figure of 119 litres.
The continuous rise in income and a decline in prices pressured down by harsh competition were the key factors to prompt the intensive development of Lithuania's alcoholic beverage market. The prices of spirits in Lithuania were among the lowest in the EU.
Vodka, cider and whiskey will remain the leading categories in terms of sales growth in Lithuania.
Lietuvos Zinios, Verslo Zinios, Respublika
Lukoil unleashing competitive fight with Mazeikiu Nafta in Latvia, Estonia
Russia's oil giant Lukoil has opened the supply of 95 grade gasoline to Latvia and Estonia unleashing the competitive fight with Mazeikiu Nafta, the Lithuanian oil complex recently acquired by the Polish oil concern PKN Orlen, on those markets.
"The assurance of alternative supply of 95 grade gasoline is an important contributor to the development of Baltic economy and energy stability. We seek to ensure that millions of consumers are not left without the most popular grade in case of any disruption of gasoline supply," Ivan Paleichik, Lukoil Baltija CEO, said.
Mazeikiu Nafta currently accounted for the lion's share of most popular grade gasoline sold on the Baltic market.
Lukoil Baltija currently operates the most popular Lithuania's chain of 116 gas stations. Lukoil runs 5,800 gas stations in 17 countries in Europe, Asia and North America.
Lietuvos Rytas, Verslo Zinios, Lietuvos Zinios, Respublika
Lithuanian farm product prices jump 20 percent in 2006
Agricultural product prices in Lithuania rose by 19.9 percent on average last year. Plant product prices soared by 36 percent in December from a year earlier, while animal and animal product prices declined by 1 one percent. The average price of rye surged by 87 percent over the year, of triticale, a wheat-rye hybrid, by 70.6 percent, of onions by 59.9 percent, of oat by 59.4 percent, of wheat by 52.9 percent, of fodder barley by 48.5 percent, of potatoes by 43.3 percent, of rapeseeds by 29.4 percent, by cucumbers by 27.2 percent, and of carrots by 25.7 percent. Prices of eggs and milk soared by 5.2 percent and 2.2 percent respectively.
Verslo Zinios, Respublika
Thursday, 25th of January
Lithuanian insurance market up 39 percent
The Lithuanian insurance market grew by 38.7 percent over 2006, to reach LTL 1.448 billion. The non-life insurance market increased by 31,9 percent year-on-year to LTL 995.417 million, accounting for 68.7 percent of all premiums written. The life insurance market soared by 56.5 percent to LTL 452.58 million.
A total of 4.16 million insurance contracts were concluded last year, up 18.3 percent year-on-year. The number of contracts concluded on life insurance market rose by 7.2 percent, to 58,400, including 43,300 investment type life insurance contracts.
Non-life insurance market was dominated by compulsory motor third-party liability insurance, comprehensive car insurance and property insurance as those three insurance types accounted for 82 percent of total non-life insurance market in 2006.
Lietuvos Draudimas held a 34 percent share of the domestic non-life insurance market last year with LTL 338.662 million in premiums written. The Ergo group of companies held a 14.4 percent market share, down from 14.8 percent a year ago, as the amount of non-life insurance premiums written by the companies soared by 28.1 percent, year-on-year, to LTL 143.375 million. PZU Lietuva wrote LTL 126.879 million in non-life insurance premiums in 2006, as its share on the market declined to 12.7 percent, from 14.5 percent a year ago.
Lietuvos Rytas, Kauno Diena
Maxima raises sales to LTL 6.27 million
Maxima LT, the largest retailer in the Baltics, said its sales in Lithuania, Latvia, Estonia, Romania and Bulgaria reached LTL 6.27 billion last year, a rise of 20.8 percent from sales of LTL 5.188 billion the previous year. The company said in a statement that it targets a 20 percent growth in annual sales and plans to open about 90 new stores this year.
Maxima LT CEO Gintaras Marcinkevicius said that the 2006 growth in sales was in line with expectations and was due primarily to the company's decision to bring all of its stores in the Baltic countries under one name, Maxima, as well as to the chain's active expansion.
Maxima LT currently operates 202 stores in Lithuania, 111 in Latvia, 33 in Estonia, 16 in Bulgaria and nine in Romania. This year, it plans to open 37 new stores in Lithuania, 21 in Latvia, 17 in Estonia and 12 in Bulgaria.
Lietuvos Rytas, Respublika, Verslo Zinios, Lietuvos Zinios
Hanner launches construction of multiuse complex in Riga
Hanner, the leading Lithuania's real estate developer, has launched preparatory works for the construction of multiuse complex in Riga. The project, which will eat up over LTL 370 million in investments, is by far the largest company's project in Latvia. The company aims to arrange approximately 900 apartments in seven residential buildings, each up to 17 storeys, in four years. Moreover, Hanner will construct two more buildings due to include some 15,000 m2 of office space and a 10,000 m2 mall, and arrange a parking lot for over 1,000 cars.
Wednesday, 24th of January
Norfa sells 22 stores
The owners of Lithuania's third-largest retail chain, Norfos Mazmena, have sold part of their real property to Norway's investment company Verdispar for EUR 49 million.
"We plan to sell the remaining commercial property in the near future," Norfos Mazmena Chairman Dainius Dundulis said.
Verdispar has purchased the buildings of 22 Norfa stores with a total area of 35,500 m2. The buildings had been owned by Rivona, a logistics, international haulage and real property lease company that is controlled by the owners of Norfos Mazmena.
Norfa will continue to operate its stores in the building under long-term lease agreements with the new owners.
Norfos Mazmena currently has 110 Norfa stores in Lithuania.
The Norfa Group posted consolidated sales of LTL 1.168 billion for the first nine months of 2006, up 28.8 percent year-on-year.
Lietuvos Rytas, Respublika, Verslo Zinios
DnB Nord Bankas boosts net profit
DnB Nord Bankas said its net profit soared by 30.6 percent to LTL 56.22 million in 2006, exceeding its profit target for the year. DnB Nord Bankas CEO Werner Schilli said the bank managed to achieve the best financial result in its history thanks to an increasing customer base and rapid growth in the business volume and loans, as well as continuous efforts to improve its operating efficiency.
"The year 2006 was of special importance for us: we joined international DnB Nord banking family, we consolidated our position in key market segments, we won recognition as the country's Best Debt House and received a rating upgrade," Schilli said.
DnB Nord Bankas had projected a net profit of LTL 55 million for 2006.
The bank's assets increased by 46.4 percent to LTL 7.51 billion last year. Its total loan portfolio grew by 55.2 percent to LTL 5.82 billion. Loans to corporate customers went up by 46.4 percent to LTL 3.3 billion, and loans to individual customers by LTL 68.4 percent to 2.52 billion.
Respublika, Verslo Zinios
Salaries of Lithuanians and Poles might differ in Mazeikiu Nafta
There is a possibility that Lithuanian employees of Mazeikiu Nafta refinery operated by Polish concern PKN Orlen could have received lower salaries than their colleagues from Poland because they have been hired by different employers.
"The assumption that there were two different employers - Mazeikiu Nafta and its hired contractor, the Polish company - is not denied. Therefore, it is possible that this is why the salaries of their employees were different," Valdas Dambrava, a public relations specialist of Office of Equal Opportunities Ombudsperson, said.
The office initiated the investigation of possible discrimination of employees in Mazeikiu Nafta in mid-December based on press releases. Later, in early January, the Institute of Law and Tolerance placed a pledge to the office.
Virginija Vilimiene, chairwoman of Mazeikiu Nafta trade union committee, said that Lithuanians received far less for the same job are paid much less than Poles, for instance, a Lithuanian welder gets LTL 16 per hour, while his Polish colleague receives EUR 16.
Lietuvos Zinios, Respublika
Tuesday, 23rd of January
Government may wrap up ruble savings compensation in February
The Lithuanian Finance Ministry proposes to transfer on January 31 the remaining LTL 182 million to the third group of people eligible to compensation for their lost ruble savings and to start paying out LTL 954 million to the fourth and last group of depositors no later than March 7.
"We have abandoned the earlier idea of paying out the money to the fourth group of depositors in equal parts on a quarterly basis. What we propose now is to pay the money at once, but that will depend on technical capabilities. It may take more than one day to transfer the whole sum," said Rolandas Kajokas, an aide to the finance minister.
There are around 110,000 people left in the third group of depositors. In the fourth group, there are over 500,000 people. The maximum amount of compensation per person is LTL 6,000.
In total, LTL .136 billion is to be paid out this year. Most of it, LTL 989 million, comes from the sale of the oil refinery Mazeikiu Nafta, and the remaining LTL 147 million from the state budget.
Lietuvos Zinios, Lietuvos Rytas, Respublika, Verslo Zinios
Changes in fast food market
Vilnius-based company Fast Foods, which brings one of the biggest worlds pizza chains Pizza Hut and fast food restaurant chain Kentucky Fried Chicken (KFC) to the Baltic States, has ambitious plans in the Baltic fast food restaurant market. The first Pizza Hut and KFC will be opened in Akropolis in Kaunas. Fast Food will control the restaurants under the franchise.
Cilija restaurants will be the biggest rivals to Pizza Hut in Lithuania. Meanwhile McDonalds will be the competitor to KFC chain.
Lietuvos Rytas, Lietuvos Zinios, Verslo Zinios
SEB Vilniaus Bankas boosts profit
Lithuania's largest bank SEB Vilniaus Bankas reported LTL 285.5 million in preliminary net profits for the full year 2006, up from LTL 106.8 million the previous year.
Consolidated net profits of the SEB Vilniaus Bankas Group almost doubled last year to LTL 288.2 million from LTL 149.1 million.
Monday, 22nd of January
Lithuanians most likely to buy their car second-hand
As much as 95 percent of Lithuania's driving population tends to buy a used car instead of a new one, a Eurobarometer survey has shown. Lithuania has the highest percentage in the EU of drivers who drive a car older than five years. The survey has found that Spain has the largest percentage of drivers who buy their car as new (77 percent), followed closely by Greece (75 percent) and Luxembourg (74 percent), while the lowest percentage is in Lithuania (4 percent) and Latvia (11 percent).
Kauno Diena, Respublika, Verslo Zinios
Five companies entered into NATO ICB Bidders' List
Further five Lithuania's companies - YIT Technika, Umega, Elintos Matavimo Sistemos, Siauliu Titanas and Omniteksas - have been entered into NATO International Competitive Bidding (ICB) Bidders List.
The NATO ICB Bidders List currently includes 36 Lithuania's companies, including nine IT companies, eight construction and repairs companies, six electronics producers, three security services providers, two textile companies and eight companies representing other areas of activities.
Further eight companies have obtained Declarations of Eligibility, which, however, are only valid for a particular tender.
PM once again pledges to cut income tax
Lithuania's government is determined to cut the income tax, Prime Minister Gediminas Kirkilas has reiterated. The scale of reduction would be decided by mid-2007, he said at the meeting with Alytus entrepreneurs on Friday.
The raising of wages envisaged in the Economic migration management strategy was one of the key preconditions for the reduction of emigration, the government press service reported Kirkilas as saying.
On top of that, Kirkilas noted that the regions should have greater autonomy whenever considering the projects requiring the EU assistance.
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