||Lithuania Business News: Archive 2003-
Saturday, 3rd of November
Karige shuts down
The shareholders of the company Karige decided to stop all the activities of the company from January 2, 2008. Karige plans to fulfil all its responsibilities to its partners until then. The oldest furniture company in Kaunas, Karige, decided to shut down, as it could not work normally after the tragedy, which took place in 2005. Four employees of Karige died after the old building of the company collapsed then. Ricardas Kiaurakis, head of SBA Group, which controls Karige, said that the activity of Karige lately was loss making and it was one of the reason to close it.
New foreign ties
The Government wishes to activate its business relations with Kyrgyz and Tadzikistan. The Ministers Cabinet addressed the President on Wednesday for permits to negotiate and prepare bilateral agreements for investments with these two countries. It is planned that the person responsible for this activity will be Andrius Namavicius, director of Legal and International Contracts Department in the Ministry of Foreign Affairs.
Electric bridge with Sweden
The heads of Lithuanian and Sweden electric companies will sign the cooperation agreement at the beginning of the next week. The heads of Lietuvos Energija (Lithuanian Energy) and Swedish company Svenska Kraftnat will sign the agreement in Stockholm; another Swedish company Sweco International will accomplish the possibilities study for the electric networks project between the two countries under the agreement. Firstly, Sweco International will make market analysis, then analyze projects financing and economic conditions. It is planned to implement the project until 2015. Rymantas Juozapaitis, CEO of Lietuvos Energija, claims that the electric bridge between the two countries might cost about EUR 550 million.
Friday, 2nd of November
Lithuania is more competitive
Lithuania moved up slightly to rank 38th among 131 nations in the latest Global Competitiveness Index rankings by the World Economic Forum (WEF).
The country ranked 39th in last year's index. This year, it is in 36th place among the nations that were ranked in 2006. The United States tops the overall ranking in the Global Competitiveness Report 2007-2008. Switzerland is in second position, followed by Denmark in third place. Zimbabwe, Burundi and Chad are considered the least competitive countries in the world. Among the new EU member states, Estonia has the highest ranking at number 27, followed by the Czech Republic in 33rd place. Slovenia is one place behind Lithuania at number 39, followed by Slovakia at 41, Latvia at 45 and Hungary at 47. Poland ranks 51st in this year's index.
Plans about new nuclear power plant
Lithuania's state should get a 60 percent of national investment company, which will be set up for the construction of new nuclear power plant. According to unofficial sources, Rytu Skirstomieji Tinklai (RST), the power grid operator, should get a 20 percent stake in the new company, while Lietuvos Energija (Lithuanian Energy), the power utility, is seen getting a 41 percent interest. The state is the majority owner of both RST and Lietuvos Energija. NDX Energija, a private equity company that owns VST, the other power grid operator, should get a 39 stake in the national investment company. International audit and consulting company KPMG Baltics, which submitted its evaluations of RST, VST and Lietuvos Energija to the ministry of economy last Wednesday, has put the value of VST at LTL 2.9 billion RST LTL 2.179 billion, and Lietuvos Energija LTL 3.108 billion.
Sugar beets are not profitable any more
Growing of sugar beets used to be a very profitable business for Lithuanian farmers for many years; however, soon the situation might change in this sphere. The farmers in Lithuania claim that currently, it is more profitable to grow grain or rape. There are two regions in the country Aukstaitija and Suvalkija which grow sugar beets. The two sugar refineries in Kedainiai and Panevezys, which are controlled by Danisco Sugar, buy sugar beets from the farmers in Aukstaitija region; while the sugar refinery Arvi Cukrus covers Suvalkija region. The number of sugar beets growers have strongly decreased in these regions due to the fact that the farmers are paid less for their harvest. The new reform imposed by the EU intends to make the payments for farmers even smaller in the coming years, as the sugar reserve excess in the global markets is very big.
Wednesday, 31st of October
Central government debt narrows
The Lithuanian central government sector's debt narrowed by LTL 201.4 million in September from August to reach LTL 13 billion the Finance Ministry reported on Tuesday. The debt in September accounted for 14.6 percent of this year's projected GDP, it said.
Hanner presents profit
Hanner, one of Lithuania's biggest property developers, has said that its consolidated pre-tax profits for the first nine months of this year soared by 62.1 percent from a year earlier to LTL 38.1 million. Consolidated sales for January through September jumped by 37.7 percent year-on-year to LTL 152.7 million, based on preliminary data released by the company on Tuesday.
Achema reports sales
Achema, Lithuania's nitrogen fertilizer and chemicals producer controlled by Achema Group, reported LTL 1.03 billion in sales for the first nine months of this year, a surge of 62 percent versus the year-earlier figure of LTL 636 million. The company's exports surged by 78 percent, to LTL 800 million. "The launch of new ammonia production unit late in 2006 had a significant effect on the results of the reporting period. Guaranteed full self-supply of ammonia boosted the output of all types of fertilizers," Jonas Sirvydis, Achema CEO, said in a statement. Western European markets, including France, Benelux countries, Germany, UK, Scandinavia and Poland, accounted for some 80 percent of company's sales. The US, meanwhile, accounted for more than 10 percent of Achema's fertilizer exports.
Tuesday, 30th of October
Lithuanias retail sales grew
Lithuania's retail sales grew by 19.5 percent in the first nine months of this year from a year earlier to reach LTL 23.324 billion the Statistics Department reported on Monday. Food retailers boosted their aggregate turnover for the reporting period by 8.1 percent, while non-food retailers, excluding the automotive sector, recorded an 18.9 percent rise in sales. Textile, clothing and footwear retailers posted the sharpest rise in sales, at 37.2 percent. The aggregate turnover of restaurants, bars and other catering establishments increased by 0.8 percent to LTL 647.3 million.
Respublika, Kauno Diena
Poland does not give up
Poland insists that its demand for one-third of electricity output of new Lithuania's nuclear plant, which Vilnius has promised to meet, should be included in the agreement on the setting up of a bilateral power bridge company. Notwithstanding recent pledges of Poland's President that the agreement would be signed late in October, observers doubt that the document would be signed in the nearest time. "Nothing specific has been heard about the signing of agreement. We are trying to discuss that again. However, the Poles insist that they will only sign the agreement if they get a 1,000-1,200 MW share of output of new nuclear power plant," Rymantas Juozaitis, CEO of Lithuania's power utility Lietuvos Energija (Lithuanian Energy), said. Talks with Polish power grid company Polska Grupa Energetyczna (former Polskie Sieci Elektroenergetyczne) were ongoing, he added. He doubted, however, that the Poles would sign the agreement until instructed to do so by top authorities of the country. "We have been negotiating this agreement with Poland for 12 years. Let us wait a bit longer - the process is not stalled, we have made it quite high-level and we hope that it is not abandoned," a high-ranking diplomat who wished to remain anonymous said.
airBaltic introduces prepaid flight cheques
airbaltic, the largest air carrier in the Baltics, has introduced prepaid flight cheques, a new ticket purchase option for its customers. Starting from Tuesday, anyone who buys a flight cheque at Maxima stores for a fixed price may exchange it into a desired flight ticket after registering at airbaltic's website. "This is a novelty in the Baltic countries and Northern Europe," Tadas Vizgirda, head of airbaltic's Lithuanian office, said during a news conference on Monday. Among the advantages of the cheque he mentioned convenient purchase and low price LTL 149, airport fees inclusive. The cheque will work as a one-way ticket. airbaltic aims to sell 25,000 cheques in Lithuania alone and 65,000 across the Baltic countries.
Verslo Zinios, Kauno Diena
Monday, 29th of October
Lithuania's Gross Domestic Product (GDP) rose by 9.1 percent in January-September, the country's Statistics Department reported on Friday. In the third quarter alone, GDP expanded by 10.8 percent versus July-September 2006, to LTL 26.473 billion. The growth of Lithuania's economy was largely propelled by the added value created by agricultural, construction, wholesale and retail, real estate, rent and other businesses, as well as transport, warehousing and communications companies, the department said. GDP per capita made up LTL 20,702 in January-September and LTL 7,846 in the third quarter alone.
New logistics scheme
Three companies in Klaipeda Vivarta ir Ko, Memelio Vartai and Termoliuksas began working according the new logistics scheme, which was offered by their representative German company Hormann. The new scheme decreased the expenditures of the companies and created the chain of companies encouragement. Virgilijus Galdikas, director of Vivarta ir Ko, says that previously the necessary equipment from Hormann, meant for the Lithuania market, was obtained by the company itself, now the production is delivered to the company. The production is always delivered on time, while the new logistics scheme allows easier cooperation with buyers in remote regions too.
Snaige is not longer up for sale
Snaige, the only household refrigerator manufacturer in the Baltics, is no longer up for sale as its search for a buyer has been unsuccessful. "The talks are over. Snaige is not up for sale. We did not agree on a price and a strategy for further development of Snaige," said the company's CEO, Mindaugas Sestokas. Snaige started its search for a buyer last spring and received offers from several potential investors, including Slovenia's Gorenje. Kristian Hansen, Gorenje's managing director for the Scandinavian and Baltic countries, confirmed that the Slovenians were not buying the Lithuanian refrigerator manufacturer.
Back to Baltic Business Monitor