Observer "Lietuva"
Lithuania Business News: Archive 2003-

WEEK 35.2008

Saturday, 30th of August

Increasing price of fuel
Prices for liquefied petroleum gas (LPG) and diesel fuel at the pump in Lithuania have held steady over the past week, but gasoline prices have moved up slightly.
The price of 95 gasoline, the most popular grade in the country, at Lukoil Baltija and Orlen Lietuva stations on Friday was LTL 3.81 per litre, LTL 0.01 higher than a week ago. Statoil Lietuva also increased the price by LTL 0.01, to LTL 3.84 per litre. Diesel fuel prices remained unchanged at LTL 4.02 per litre at Statoil's stations and at LTL 3.99 at Lukoil and Orlen stations. The price of LPG at all the chains was LTL 2.10 per litre on Friday, unchanged from a week ago.
Kauno Diena, Respublika

New head of Interlinks
Antanas Malikenas, one of State Property Fund's (SPF) executives, will head Interlinks, the international links subsidiary of Lithuania's national investor company Leo LT, effective from Monday, Sept. 1.Malikenas, 44, will replace acting Interlinks CEO Saulius Specius, Leo LT board member and executive in charge of strategic projects. "I hope that Lithuania will have a direct power link with Sweden", Malikenas claimed. Malikenas, who has extensive record of work in the banking sector, has worked for SPF for almost eight years.

New methodology for counting upper limits of gas provision cost
Pricing commission confirmed methodology for counting of upper limits of gas provision costs, which will allow determining reasonable profit scopes for gas providers. According to the new methodology, with basic gas import price at LTL 1,100 for 1,000 cubic meters, providers will be able to earn approximately 3 percent. Similar methods are used in other countries of the European Union. Last year in October, gas import price was LTL 529,34 for 1,000 cubic meters, while now it exceeds LTL 1,000. As the price nearly doubled, the profit of gas providers, counting according to the new methodology, would double as well.
Respublika, Lietuvos Rytas

Friday, 29th of August

Ikea plans to invest in Lithuania
The representatives of Ikea have discussed the plans of Swedish furniture trader to invest in Lithuania with Prime Minister Gediminas Kirkilas. "The key problem is the shortage of timber," Mantas Nocius, Kirkilas' adviser, told the reporters after the meeting. The large number of suppliers burdened the purchase of timber from Lithuania’s state forest enterprises, Ikea representatives said. In their view, large-scale buyers would prefer to buy all timber supplied by state forest enterprises from a single large vendor, the government press service said in a statement. Kirkilas agreed it would be rational to consider possibilities to enlarge the sales by state forest enterprises. Ikea plans to invest LTL 450-700 million in Lithuania and create added value up to LTL 300 million per year. As estimated by the company, about 1,000 jobs would be created in Lithuania and the national budget would get some LTL 50 million in revenues per year.
Kauno diena, Verslo Zinios

Record-braking decrease of consumer confidence
Lithuania's consumer confidence index fell to -27 points in August from -24 in July, the Statistics Department reported on Thursday. The index in August was at its lowest level since the end of 2001, it said. Over the year, indicator of consumer confidence decreased by 32 percent. The decline was due to expectations of rising unemployment (the number of people expecting increase in unemployment rose from 9 percent to 52 percent) and growing pessimism among the population over the prospect of saving any money in the coming year.
Lietuvos Rytas, Respublika

Growth of GDP
Lithuania's gross domestic product grew by 6,1 percent in the first half of this year from a year ago, revised figures from the Statistics Department showed on Thursday. This is slightly down from a preliminary estimate of 6,2 percent. The estimate was revised based on the latest data for the second quarter, the statistics office said. According to the revised data, the economy expanded by 5,3 percent in the second quarter year-on-year to LTL 28,234 billion, down from an earlier estimate of 5,5 percent growth to LTL 28,393 billion. The strongest growth in the second quarter was recorded in industry and energy (up 6,3 percent), construction (up 5,9 percent), wholesale and retail trade and transport and communications services (up 5,8 percent), and financial intermediation and real estate services (up 5,6 percent). Respublika, Verslo Zinios

Thursday, 28th of August

Expert recommendations on nuclear power plant building
A new nuclear power plant with the maximum capacity up to 3,400 MW may be built in Lithuania, Finland's and Lithuania's experts have said in a report on Environmental Impact Assessment (EIA) of prospective facility. Such a capacity should be acceptable for Poland, which demanded an at least 1,000-1,200 MW share of new plant's capacity in exchange for partnership last year. "The established maximum capacity of 3,400 MW would be acceptable in terms of environment protection," Thomas Bonn, a representative of Finland's Poyry Energy, said at the public presentation of EIA on Wednesday. According to the report, which was released publicly for the first time on Wednesday, the capacity of the smallest and the largest units could reach 600 MW and 1,700 MW, respectively, and the facility may operate 1-5 reactors, the number of which would depend on technologies and total electricity generation capacity.
Lietuvos Rytas, Verslo Zinios

Lithuania is developing business relationships with Kazakhstan
Kazakhstan is one of the most quickly developing countries; there are many Lithuanian investments to it. However, Raimondas Martinavicius, commercial attaché in Kazakhstan, says that Lithuanians, who are used to Scandinavian business model, should remember that it is Asian country. He said that everything takes longer, as system is more bureaucratic and there is a lack of qualified labourers. Meanwhile meeting of cooperation and sales committees took place in Palanga last Tuesday, in which it was decided that both countries have potential of cooperation in sales, energetic and transportation sectors. Vytas Navickas, Minister of Economics, claims that economic cooperation is very intense between the two countries.
Kauno Diena, Lietuvos Zinios, Respublika

Number of vacancies declined
The total number of job vacancies in Lithuania reached 23,300 at the end of June, down 4,8 percent versus the year-earlier figure, the Statistics Department reported on Wednesday citing the results of vacancies survey. Compared with previous quarter, the number of job vacancies declined by 10,6 percent. The largest number of job vacancies was in the industrial sector (6,000 vacancies or 25,6 percent of the total number), public administration and defence and compulsory social insurance (4,500 or 19,1 percent each) and trade (2,600 or 11,2 percent) as of the end of June. The number of vacancies was the smallest in agriculture, hunting, forestry and fishery sector (1,4 percent of the total number), hotels and restaurants (1,9 percent). Respublika, Verslo Zinios

Wednesday, 27th of August

Most of Lithuanians are unwilling to make savings
The number of people who either cannot or do not want to save money increases n Lithuania. Results of poll, ordered by insurance company Aviva, showed that 42 percent of all respondent preferred to spent money rather than save them. Meanwhile in the whole world, people who live by this day make only 28 percent. Asta Ungulaitiene, chief executive with Aviva, says that it might appear as if people, who earn the least, tend to spent the most, as the 61 percent of people who received LTL 1,500 a month prefers spending. However, these people cannot save due to lack of money. Also, poll showed that over three years, the number of Lithuanians, who think that materially they have all they need, increased as well from 15 percent in 2006 to 20 percent this year.
Republika, Lietuvos Rytas

Increasing monthly gross pay
The average monthly gross pay in Lithuania rose by 22,5 percent in the second quarter of this year from a year earlier to reach LTL 2,237 (EUR 648.4), and net salaries and wages increased by 25,2 percent to LTL 1,713 on average, the Statistics Department reported on Tuesday. The growth rate in the public sector was 12,8 percent and in the private sector, it was 11 percent. The average gross salary in the public sector rose by 23,8 percent to LTL 2,287 and in the private sector it rose by 21,7 percent to LTL 2,208. The average net salary increased by 26,5 percent to LTL 1,750 and by 24,4 percent to LTL 1,692, respectively. In the second quarter compared with the first quarter, the average monthly gross pay in the entire economy increased by 4 percent and the net salary was up by 3,8 percent. The growth rates in the public sector were 5 percent and 4,7 percent, and in the private sector, they were 3,4 percent and 3,2 percent, respectively.
Verslo Zinios, Respublika

Prime Minister promises to pay part of heating bills
Prime Minister Gediminas Kirkilas Repeated, that government is planning to cover part of cost of heating, which is due to become more expensive in autumn. According to Kirkilas, part of funds will be take from State Treasury, and will be distributed not only for socially-deprived people. “It is not doubted that it will be necessary to help people to survive growth of prices of heating, and not only for socially-deprived. All European Union countries do it, and so we are going to so it according to capacities of our budget.” From this autumn, heating price in Lithuania will grow by more than 40 percent.
Kauno Diena, Verslo Zinios, Lietuvos Zinios

Tuesday, 26th of August

Owners of Mazeikiu Nafta opens discussions with Iraqi officials
Poland's oil concern PKN Orlen, the owner of Lithuania's oil refinery Mazeikiu Nafta (Mazeikiai Oil), opened first discussions with Iraqi officials on activities in Iraq's crude sector last week. Iraqi oil minister Hussein Al-Shahristani visited Poland last Thursday and met with representatives of Poland's oil companies. Early in August, PKN Orlen said it was looking for a strategic partner that could support the concern in developing the oil field business. The Polish company then said it would first target the Persian Gulf region.
Kauno diena

Record insurance payout
A record accidental death insurance payout of EUR 400,000 will be paid to the family of well-known plastic surgeon Egle Knepiene, a customer of Latvians-owned Lithuania's commercial bank Parex, who drowned in Egypt in April. Insurance market experts claim that the accidental death insurance payout is the largest ever in Lithuania, Parex bank has said in a statement. The management of insurance company International SOS, a partner of Parex bank, adopted a decision on the size of payout after four months of discussions. The American Express Platinum card issued by Parex bank to Knepiene provided the coverage both to its owner and her co-travellers.
Kauno Diena, Verslo Zinios

Lithuanian government preparing for economic pressure from abroad
As Lithuania's government makes plans to fortify protection of Lithuania's economy, it officially acknowledges contentious activity of foreign reconnaissance with regards to strategic companies as one of the most important threats. The program for strengthening economic security, prepared by the Ministry of Economy and due for government approval Wednesday, revealed that Lithuania does not warrant necessary physical protection for important companies, also with a possibility for an information leak. Moreover, the program mentions potential devaluation of the litas, should the country be struck by a financial crisis.
Kauno Diena, Lietuvos Rytas, Respublika

Monday, 25th of August

Discussion about referendum over closure of Ignalina Nuclear Power Plant
Any statements that Lithuania is or is not holding talks on the modification of term for the closure of Ignalina Nuclear Power Plant (INPP) are not correct, government's nuclear negotiator Aleksandras Abisala claims. The advisory referendum on the fate of INPP, which would take place simultaneously with parliamentary elections, would be extremely significant, he claimed. He also pointed out that the opinion of the European Commission was just a response to the questions most frequently asked about INPP. The support for the extension of lifespan of Ignalina Nuclear Power Plant (INPP), which Lithuania's population might express at a referendum, would have no effects on the Treaty of Accession of Lithuania and its protocols, and the country might face the risk of financial sanctions if breaching its obligations on the shutdown of the nuclear facility, the European Commission warned in its opinion published on the website of the EC Representation in Lithuania on Friday.
Verslo Zinios, Respublika

Ukio Bankas Is Ahead in Vilnius Stock Exchange
The Vilnius Stock Exchange (VSE) closed on an upper note on Friday, while the investors mostly targeted Ukio Bankas, which was the sole stock to cross the LTL 1 million shares turnover threshold during the session. The OMX Vilnius index rose 1.93 percent, to 428.98 points, while the OMX Baltic Benchmark gained 1.2 percent, to end at 501.84 points, and the OMX Baltic 10 index of ten most liquid Baltic stocks added 1.74 percent, to close at 209.87 points .On the Main List, Ukio Bankas, with a turnover worth LTL 1.038 million, rose 2.38 percent, to LTL 3.01, while Apranga, the clothes retailer, soared 5.36 percent, to LTL 6.68, with the trades worth LTL 605,100, and Teo LT, the dominant landline operator, firmed 0.51 percent, to LTL 1.99, with LTL 478,400 worth of stocks changing hands. Siauliu Bankas, with a turnover worth LTL 288,200, rose 3.13 percent, to LTL 1.98, while Sanitas, the generics producer, gained 2.92 percent, to close at LTL 31.4, with LTL 243,300 worth of stocks changing hands, and RST, the power grid operator, rose 1.3 percent, to LTL 3.9, with the trades worth LTL 175,500.
Verslo Zinio

Illegal employment in Lithuania increases
More and more often illegal foreigners are caught, who work in Lithuania. During the first half of the year, there were 8,5 times more of them than at the same time last year. However, employers only know the real numbers. According to data of institutions, who look after work, overall 2,411 cases of illegal forms of employment were registered, 604 people, who worked illegally, 414 cases when business was performed without special licenses, and 1193 cases when companies were not registered. Them most illegal workers are in building (30 percent), agricultural (14 percent) and sales (11 percent) sectors.

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