||Lithuania Business News: Archive 2003-
Saturday, 24th of November
Lithuanian insurance market grows
Lithuania's insurance market grew by 38.7 percent in the first ten months of this year from a year earlier, to reach LTL 1.589 billion the Insurance Supervisory Commission (DPK) reported on Thursday. 3.9 million of insurance contracts were signed during January-October; it is by 10.9 percent more that last year during the same period. The life insurance market was also rapidly growing during January and October; it increased by 71.8 percent from last year during the same period.
BTA Draudimas is fined
Lithuania's Insurance Supervisory Commission (DPK) has imposed a LTL 25,000 fine on Latvian-equity Lithuanian general insurance company BTA Draudimas (BTA Insurance) for not notifying the regulator about a large-scale transaction within the insurance group. "The company has carried out one transaction, involving the assignation of assets. Those assets were financial, not tangible. We have not been notified, however," Mindaugas Salcius, DPK chairman, said.
General government debt narrows
Lithuania's general government debt narrowed by LTL 353.1 million in the third quarter compared with the second quarter, to reach LTL 14.671 billion, accounting for 15.4 percent of this year's projected GDP, the Finance Ministry reported. The debt was equal to 15.8 percent of GDP envisaged for full 2007 at the end of the second quarter. Quarter-on-quarter, domestic debt increased by LTL 85 million, while foreign debt decreased by LTL 438.1 million. The face value of outstanding securities fell by LTL 210.3 million and outstanding loans declined by LTL 142.8 million.
Friday, 23rd of November
No hopes for Druzhba
Chairman of the Foreign Affairs Committee of Russian lower house of parliament - Duma - does not provide any hope that oil could reach Lithuania through the Druzhba pipeline any time soon. "Experimental works on pipeline metal are currently being effectuated in order to determine exploitation possibilities, so as to ensure technological and ecological security" says Kosachyov's letter to Lithuanian Chairman of Foreign Affairs Committee Justinas Karosas. The Russian official's letter says that almost 8 thousand defects were found in the pipeline Druzhba 1, through which oil flows to Lithuania and Latvia. As Kosachyov writes, "after eliminating the defects and making calculations, a decision will be made with regards to changing the pipeline or the possibility of increasing pressure in order to ensure exploitation of the pipeline". Kosachyov remarks that the real cause of the problem is technical and consequently, renewing oil supply to Lithuania will not be possible in the near future. Research on the pipeline's condition is being conducted by Russian national pipeline monopolist Transneft. It should also conduct repair works on Druzhba's branch-line that supplies oil to Lithuania and Latvia.
Optimism in Lithuania is decreasing
The income of residents, the profit of companies and the entire economy in the country is growing very fast; however, on the other hand, people's optimism is rapidly decreasing too. The analysts of DnB Nord bank claimed that the expectations of Lithuanian residents decreased due to the growing inflation. Growing prices are threatening the competitive ability of companies and the gap between rich and poor people is getting bigger ad bigger. Salaries grew by 21 percent during the first half year, while the output increased only by 14 percent. The analysts also notice that the production of Lithuania producers is rapidly getting expensive at the moment and this will cause inflation in future also. It will also become harder to export the production when it gets more expensive. Inflation level would also increase due to the growing excise duties and gas prices next year.
Lietuvos Rytas, Respublika, Lietuvos Zinios
Polish and Lithuanian friendship
There are more and more Polish citizens who enjoy buying different things in Lithuania. Polish residents are visiting Lithuanian restaurants and bars, as it is much cheaper to eat out in Lithuania than in Poland. Poles also enjoy a lot Lithuanian shopping centers and buy a lot of Lithuanian bread. While Lithuanians are also going to Poland to buy cheaper food products there such as poultry, sugar, sweets or even toilet paper. Many Lithuanians are going to the neighboring country to buy construction material as it much cheaper there. Lithuanian women are traveling to Warsaw of Gdansk to buy luxurious clothes. Such trend vitalizes the market of the both countries.
Thursday, 22nd of November
The Lithuanian government and Germany's E.ON have so far failed to reach an agreement over the final payment for the shares in Lietuvos Dujos (Lithuanian Gas) that the German group bought five years ago, officials said on Wednesday. Economy Minister Vytas Navickas met with Stephan Kamphues, one of the heads E.ON Ruhrgas International and board chairman of Lietuvos Dujos, in Vilnius on Wednesday. The Economy Ministry's position is that E.ON must pay an additional LTL 34 million which the Germans agreed to pay in 2002 provided that certain conditions were met. The money was deposited in a special bank account.
Ukio Bank signed an agreement
Lithuania's Ukio Bankas signed on Wednesday an agreement with 21 foreign banks on a one-year syndicated loan worth EUR 48 million. The loan syndicate is led by Germany's Bayerische Landesbank and HSH Nordbank HSH Nordbank, and includes banks from countries as close as Latvia (Trasta Komercbanka) and as far away as India (State Bank of India) and Egypt (National Bank of Egypt), Ukio Bankas said. Ukio Bankas posted a net profit of LTL 68.3 million for the first nine months of this year and is projecting a full-year net profit of LTL 82 million.
Respublika, Verslo Zinios
Two Lithuanian women among the successful businesspeople
The Financial News business publication has included two Lithuanian businesswomen - Aukse Jurkute and Amy Naujokas - into the annual FN100 list of top 100 European females working in the financial sector. Jurkute heads a department of one of the world's key financial companies Merrill Lynch, while Naujokas, a US citizen of Lithuanian descent, works as executive director of Barclays Stockbrokers, the Lithuanian Embassy to Great Britain said. The FN100 list is seen as an important indicator of professional acknowledgment.
Wednesday, 21st of November
The negotiations about the national investor project did not start
The Lithuanian government's talks with the privately-owned NDX Energija on the establishment of a national investor company for the construction of a new nuclear power plant did not start on Tuesday as planned. Economy Minister Vytas Navickas said this after a task group meeting on Monday. He told reporters that the start of talks with NDX Energija was being postponed because the Economy Ministry wanted to analyze a report by the National Audit Office before finalizing its negotiating position. The minister did not comment on the findings of the National Audit Office, saying that they were confidential. He only said that the office had not given any strict instructions as to what should be done and that the report did not question the valuation of the energy companies involved in the project. "I think that next week I will most probably be able to submit our draft negotiating position to the Cabinet for approval. Although slowly, we will be moving forward," Navickas said.
Verslo Zinios, Kauno Diena, Lietuvos Zinios, Lietuvos Rytas, Respublika
Vaiku Planeta launches e-shop
Vaiku Planeta (Children's Planet), a Vilnius-based company, has launched an online shop, at Babymarket.lt, offering goods for children and expecting mothers.
Vaiku Planeta said in a statement on Tuesday that it had invested over LTL 80,000 in the e-shop project. If the project is successful, the company will consider expanding its online retail business to the Latvian and Estonian markets. "We will seek to build customers' confidence and become the leading online retailer of products for children in Lithuania," said Lina Dementaviciene, the head of the Babymarket.lt project. Established in 2000, the Lithuanian-owned Vaiku Planeta is a wholesaler of products for children. It is also an official representative of Chicco, an Italian manufacturer of children's goods, in Lithuania.
Businessmen are fighting
Zilvinas Marcinkevicius, a top executive of Vilniaus Prekyba, has publicly accused Darius Mockus, the biggest shareholder of MG Baltic, another major Lithuanian business group, of having links with Russian secret services and of attempting to ruin the planned new nuclear power plant project. Marcinkevicius said on Monday evening that plans to disrupt the project had been forged at MG Baltic companies with the aim of blackmailing the state and making Vilniaus Prekyba a target of criticism. "I know that these plans were drawn up by Mockus, that is, at MG Baltic companies. This is a fact," Marcinkevicius said during a Lithuanian Television discussion program, TV Forumas. "Facts about Marcinkevicius' long-standing collaboration with Russian residents from security services and companies set up in Lithuania by those residents are known to me," he said. Mockus said by telephone that he could not comment on what he called a "lie." He added that he would consider "defending his honor" in court. Vilniaus Prekyba owns NDX Energija, the owner of the power distribution grid operator VST, which is one of the three companies that the government plans to merge to form a large company that would act as a "national investor" in the new nuclear power plant project.
Lietuvos Rytas, Lietuvos Zinios, Respublika, Kauno Diena
Tuesday, 20th of November
NDX Energija refuses to participate in the establishment of the national investor project
Private-equity NDX Energija, the owner of power grid operator VST, refuses to participate in the establishment of a national investment company on the framework of state-run power utility Lietuvos Energija (Lithuanian Energy). NDX Energija would declare its position on Tuesday, November 20, at the opening of respective talks with the government. In the opinion of NDX Energija, instead of using the framework of Lietuvos Energija, the national investment company should be set up via the establishment of a parent public company, which would operate Lietuvos Energija, power grid operator Rytu Skirstomieji Tinklai (RST) and VST as subsidiaries. The transformation of Lietuvos Energija into the national investment company would bring about the risk of that company, RST, VST and the new nuclear power plant falling into dependence on Russia's electricity system, NDX Energija said in a statement. The option proposed by NDX Energija would be less time-consuming, Darius Nedzinskas, NDX Enegrija chairman, said that the new parent company could be established much faster, compared with the establishment of the national investment company on the framework of Lietuvos Energija, which had quite a few shareholders and creditors.
Lietuvos Rytas, Respublika, Kauno Diena, Lietuvos Zinios, Verslo Zinios
Alternative market is launched
First North, an alternative stock market created by OMX, was launched in Lithuania on Monday, the Vilnius Stock Exchange (VSE) said. The VSE launched the alternative market after the country's Securities Commission approved its rules, a procedure that took more than half a year to complete. "This market will become fully operational after some companies offer their shares for trading," VSE Chairwoman Arminta Saladziene said in a statement. The alternative market will provide small and medium-sized companies that are not listed on the VSE with an easier access to the securities market. Also on Monday, First North started operating in Estonia. In Latvia, it was launched in June. The market also operates in Denmark, Sweden, Finland and Iceland.
Consumer prices should grow in Lithuania
Consumer prices should grow by 1 percent in Lithuania over November, the country's Statistics Department projects. The harmonized twelve-month inflation average would reach 5.5 percent, while the annual inflation should total 7.9 percent in November, Nomeda Bratcikoviene of the department's Econometric Research Unit said. "We are projecting a rise in food prices, as well as the increase of prices in the accommodation and utilities group," she said adding that the prices would also move higher in the transport and restaurant services groups. In October, the harmonized monthly inflation made up 1.5 percent, while the twelve-month inflation average was 5.2 percent, and the annual inflation totaled 7.6 percent.
Lietuvos Zinios, Respublika, Verslo Zinios
Monday, 19th of November
CEO of Dvarcioniu Keramika resigns
Juozas Raiselis, CEO and president of Dvarcioniu Keramika (Dvarcionys Ceramics), the only manufacturer of ceramic tiles in the Baltics, is set to resign and divest his stake in the company. Raiselis will sell the whole 17.97 percent stake to Opoczno, the Polish ceramic tiles maker and the largest single shareholder of the Lithuanian company, Dvarcioniu Keramika said in a statement. A respective agreement has already been signed, and the deal will be finalized pending the approval of the Competition Council. Opoczno currently owns 60.25 percent of Dvarcioniu Keramika. As reported earlier, Opoczno may transfer its tile companies in Lithuania and Poland to Cersanit, the largest single shareholder of Opoczno and the leader of Polish tile production industry. Michal Solowow, one of key shareholders of the Polish companies, has admitted that Opoczno and Cersanit might be merged. Respublika, Verslo Zinios
Raising Lithuanian's budget in 2008
Parliamentary Budget and Finance Committee has proposed to raise Lithuania's 2008 budget by additional LTL 300, which would be channelled to boost some assignations as proposed by some MPs. The amount proposed comprises 0.93 percent of national budget expenditures. The government might get the amount via the cutting of public debt administration costs, the committee said. Jonas Lionginas, the committee's chair, noted a significant increase in the number of submitted proposals concerning additional financing. All in all, MPs, parliamentary committees and other institutions lodged 555 proposals with the total amount specified therein reaching LTL 3.3 billion. The government shall tackle the proposals of the committee by December 4. Verslo Zinios
Apranga Group reports numbers
Apranga Group, the leading Baltic clothing retailer, reported LTL 16.611 million net profit for the first nine months of 2007, up 24.1 percent versus the year-earlier figure of LTL 13.383 million. The net profit of the head company alone soared by 80.9 percent, year-on-year, to LTL 13.684 million, Apranga said in its nine-month report. The turnover of Apranga group rose by 50.9 percent in the nine-month period, to LTL 306.5 million. Earlier the group projected the pre-tax earnings of LTL 31 million on a turnover of LTL 415 million for full 2007.
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