Lithuania Business News: Archive 2003-
Saturday, 4th of July
Government will cut wages
The wages of politicians and public officers in Lithuania will be cut by 5-24.5 percent from September. The measures adopted by the government on Friday still need the approval of the parliament. The wages for all public services employees should be trimmed by 5 percent, while the remuneration for the highest-paid officials should be reduced additionally by up to 7.5 percent, depending on the category of the public service. In total, the wages of the highest-paid public service employees will be reduced by 24.5 percent. However, the government has not dared to reduce pensions. Rimantas Dagys, the minister of Social Security and Labour, has stated that he has a plan how to avoid reduction of pensions.
Lietuvos Rytas, Respublika
Begins regular flights
Lithuania's new air carrier Star1 Airlines, part of Star Team Group, launches direct flights between Vilnius and London - on its first regular route - on Friday. The first company's flight from Vilnius to London is scheduled at 5 pm. More than a half of tickets had been sold. The carrier now operates a 148-seat Boeing 737-700 Next-Generation aircraft. Martynas Laivys, the head of Star1 Airlines, claims that the company will attempt to renew Lithuania’s connection with European countries. The company is going to introduce new flights directions at the end of summer.
Respublika, Lietuvos Rytas
Succeeded to avoid taxes
Inspectors of taxes have tried to make world producers of medicine pay more taxes in Lithuania but have not managed to do it. Most international pharmaceutical companies indicate that they only advertise medicine in Lithuania; however, State Tax Inspectorate is convinced that they actually distribute medicine. Therefore, these companies should pay more taxes. At the moment State Tax Inspectorate is suing Astra-Zeneca Lietuva and a subsidiary of Pfizer Luxembourg Sarl. The companies do not acknowledge that they sell medicine in Lithuania.
Friday, 3rd of July
Valio does not build a factory in Lithuania
Finland's Valio has denied Lithuanian media reports that it plans to participate in a project to build a cooperative milk processing plant near Panevezys, in the north central part of the country, which would require around 100 million litas (EUR 29 mln) in total investment. "No such decision has been taken, but if favorable market conditions emerge, the company does not rule out expanding in Lithuania and strengthening its position here," Laima Padegimiene, the head of Valio's representative office, said in a press release on Thursday. She said that Valio last year achieved a 26 percent rise in sales in Lithuania and sees growth prospects for the market. The media have recently reported that local farmers, angry about low milk purchase prices, are planning to build a new plant close to Panevezys together with a strategic investor, most probably Finland's Valio.
Cargos and revenues decreased
Lithuania's Klaipedos Nafta (Klaipeda Oil), the state-run oil products terminal, handled 3.744 million tons of petroleum products in the first six months of this year, down 15.5 percent versus the year-earlier figure. Six-month revenues declined by 13.4 percent, year-on-year, to LTL 55.7 million. In June alone, the handling at the terminal shrank by 10.7 percent, to 662,600 tons, from 742,200 tons in June 2008. The revenues made up LTL 9.4 million, down 4.1 percent from the year-earlier figure of LTL 9.8 million, the company said in a statement.
Unemployment rate rose
Lithuania's unemployment rate reached 9.3 percent in early July, up 0.3 percentage point from 9 percent a month ago, the Labor Exchange reported on Thursday. The number of registered unemployed persons stood at 199,200 on Jul. 1, accounting for 9.3 percent of the working age population, it said. Some 26,500 jobless people applied to the Labor Exchange offices in June, almost 1,300 more compared with May. About 11,300 found a job via the exchange last month. More than 10,400 job vacancies were registered last month, virtually unchanged from May.
Lietuvos rytas, Verslo Zinios
Thursday, 2nd of July
SODRA’s saving plan is prolonged until 2016
The Lithuanian government on Wednesday agreed to lend LTL 715 million to the financially-troubled State Social Insurance Fund (Sodra) to help it pay pensions and other social benefits for the third quarter. The government will provide the loan from the state's borrowed funds. Sodra Director Mindaugas Mikaila said earlier this week that the money would be disbursed in three parts: LTL 315 million in July and LTL 200 million in August and September each. "These funds will suffice for the third quarter. If the situation does not change, more money will have to be borrowed to continue [social] payments," he said. Sodra's board predicts that the fund's deficit this year may reach LTL 2.314 billion. The loan will follow a 420-million-litas financial injection from the government in April.
The government started discussion about salaries with lies
Lithuanian Prime Minister Andrius Kubilius admitted on Wednesday that, without having consulted trade unions, the government had reduced the basic salary to LTL 115 from LTL 128 and the basic hourly pay rate to LTL 0.68 from LTL 0.76 in order to "prompt a healthy discussion". "This is a set of proposals by which we have started discussions about what decisions are needed. We will discuss this with trade unions on Wednesday, and if we find other solutions, we will change the decisions that have already been taken," Kubilius told reporters. Ridas Jasiulionis, an aide to the prime minister, said that the respective resolution had been adopted on Jun. 17 and should take effect on August 1. The parliament's approval is not required for cutting the basic salary, he said. The basic salary is used in the calculation of salaries for the lowest-paid public sector employees, including teachers, social workers, librarians and cultural workers. Trade unions on Thursday plan to begin a hunger protest against the basic salary cut.
Lietuvos Rytas, Verslo Zinios
Plane caught a bird
Ireland's budget carrier Ryanair delayed a flight from Kaunas to London for half a day due to technical snags on Tuesday. The aircraft with 172 passengers on board, initially scheduled to depart at 10:20 pm on Tuesday, is now expected to take off on Wednesday at 12:05 pm, the Kaunas Airport reported. A bird got sucked into the aircraft's engine during landing at Kaunas Airport, Kestutis Auryla, head of Civil Aviation Administration (CAA), said. The company was now waiting for Ryanair experts to arrive from London who would decide whether the aircraft was safe to continue operations. "No damage has been sustained. It was just a minor disorder in the functioning of the engine. Passengers will be taken to London with this or another airplane," Auryla said. The delay in Ryanair flight from Lithuania due to technical snags is already the second this year. Last Wednesday the company postponed its direct flight from Kaunas to Dublin as the crew noticed prior to the take-off that the sealing of one of the emergency exit doors was damaged.
Verslo Zinios, Lietuvos Rytas
Wednesday, 1st of July
Bought more and sold more
Lithuania's exports grew by 28.5 percent in 2008 compared with 2007 to reach LTL 5.511 billion, while its imports rose by 18.7 percent to LTL 73.006 billion revised data from the Statistics Department showed on Tuesday. The country's foreign trade deficit last year narrowed by 4.5 percent to LTL 17.495 billion, according to final data from customs declarations and Intrastat reports. Excluding mineral products, the country's exports increased by 11.8 percent and imports were up by 1 percent. The export of Lithuanian-origin goods alone rose by 31.6 percent; excluding mineral products, the increase was 5.8 percent. Russia remained Lithuania's biggest export partner in 2008, accounting for 16 percent of all exports, followed by Latvia with 11.6 percent, Germany with 7.2 percent and Poland with 5.8 percent. Russia also topped the import rankings, with 29.9 percent of all imports, followed by Germany with 11.8 percent, Poland with 10 percent and Latvia with 5.2 percent.
Verslo Zinios, Lietuvos Rytas
The deficit reached 4 percent of GDP
The Lithuanian central government's deficit totaled LTL 4.075 billion in the first five months of this year, accounting for 4 percent of this year's projected gross domestic product (GDP), the Finance Ministry reported on Tuesday. In May alone the deficit reached LTL 978.8 million, or 1 percent of the projected GDP, it said. The sector's revenues for May totaled LTL 2.089 billion. Expenditures amounted to LTL 3.001 billion, and transactions in non-financial assets to LTL 67.4 million. Revenues on taxes and social contributions made up 44.3 percent and 47.9 percent, respectively, of the total revenue figure, while social benefits comprised 50.5 percent of total expenditures. In January-May, the revenues made up LTL 11.223 billion, expenditures LTL 14.585 billion, and transactions in non-financial assets LTL 712.9 million.
Verslo Zinios, Lietuvos Rytas, Respublika
Lithuania's economic sentiment index rose
Lithuania's economic sentiment index rose by 3 percentage points to minus 30 in June, up from minus 33 percent in May, the Statistics Department reported on Tuesday. In year-on-year terms, the composite indicator plunged by 31 points this month, it said. The industrial confidence index edged up by 1 point in June from May and confidence in the construction and retail sectors rose by 2 points. Confidence in the services sector increased by 4 points and confidence among consumers went up by 6 points. Year-on-year, confidence in the construction sector dropped by 64 points and confidence in the retail sector by 38 points. Industrial and consumer confidence indexes fell by 21 points each, and confidence in the services sector was down by 45 points.
Tuesday, 30th of June
The expectations of Lithuanian residents are improving
Lithuania's consumer confidence index rose to -42 points in June, up 6 percentage points from the May level of -48 points, the Statistics Department reported on Monday. Compared with June 2008, the index plummeted by 21 points, it said.
Verslo Zinios, Lietuvos Rytas
The number of Verslo Zinios
The Lithuanian government on Monday borrowed another LTL 20 million on the domestic market. It sold LTL 20 million worth of Treasury bills at an average yield of 9.401 percent via an auction. The lowest yield bid was 9.2 percent and the highest yield accepted was 9.7 percent. Competitive bids worth LTL 42.639 million and non-competitive bids worth LTL 6.108 million were placed for the auction. This T-bill issue matures on April 15, 2010.
McDonald's, the operator of the world's largest fast-food chain, will open its seventh McDonald's restaurant in Lithuania and a McCafe coffee shop, the first in the country, in Siauliai in June. The outlets will be opened at the Akropolis mall on Jul. 8. The company would not disclose the amount of investments, McDonald's representative Aleksandras Juodakis said. "We are continuing the expansion of our restaurant chain in Lithuania and the Baltic region after a long break. This year for us is also a year of renewal - we are much focused on our existing McDonald's restaurants in Lithuania," Melo Hili, Managing Director of Baltic McDonalds, said.
Monday, 29th of June
Sales are dropping
Lithuania's retail sales plunged by 29.5 percent in the first five months of this year from a year earlier to LTL 10.89 billion, the Statistics Department reported on Friday. Retail sales for May fell by 28.7 percent year-on-year, at comparative prices, and were down by 3 percent versus April, according to preliminary data. Food and beverage service providers saw their aggregate turnover for the five months drop by 19.1 percent year-on-year to LTL 377.9 million. Retail trade companies, including the automotive sector, recorded a 3 percent decline to nearly LTL 2.24 billion.
Ignalina Power Plant resumes its work
Lithuania's Ignalina Nuclear Power Plant (INPP) is due to restart power generation on Friday after an approximately 20-day maintenance period and is expected to reach the maximum capacity of 1,300 MW next Tuesday, on June 30, and to operate without any interruptions until the end of the year. The State Nuclear Power Safety Inspectorate (VATESI) issued permission for the switching on of the second unit of INPP earlier on Friday. The facility aims to start up the installations at about 4 pm. "Everything goes as scheduled - I hope that the facility will be connected to the grid on Saturday evening or Sunday night, and it should reach the maximum capacity of 1,300 MW next Tuesday," Viktor Shevaldin, INPP CEO, said. INPP completed maintenance earlier this week ahead of the schedule. The sole operating unit of the facility switched off automatically on June 6 due to a malfunction of electronic security system. Electricity to Lithuania was supplied by domestic producers, Scandinavia, Estonia, Latvia and Russia during INPP repairs. INPP produces about 80-90 percent of electricity consumed in Lithuania per year.
Hope for closer relationships
The Lithuanian government will consider its neighbor Belarus' offer to supply power, a utility the Baltic state will be in need of after decommissioning its Ignalina Nuclear Power Plant (INPP) in the end of 2009, Prime Minister Andrius Kubilius said at the close of his Belarus visit. Kubilius on Friday evening met with Prime Minister of Belarus Sergei Sidorsky, who told him the country has a surplus of energy, noting room to provide supply to Lithuania. "Belarus says it has a surplus of electrical energy, and, if agreed upon, they could supply some energy to Lithuanian consumers as well. We have the proposal and we know it is in our best interest to consider it," Kubilius said. "When considering the strategic directions for our energy market after Ignalina nuclear plant closure we see an obvious prospect, i.e. that Lithuania's energy market will have room for free trade, and those, who think they can make a profitable sale, will be welcome to do so," the Lithuanian prime minister spoke. Kubilius during the Belarus visit also received confirmation of the country's plans to build a nuclear plant, he said, however saying this wasn't discussed in any more detail.
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