Lithuania Business News: Archive 2003-
Saturday, 22nd of August
Compared the prices
Prices in Vilnius are half as high as those in New York, while wages in the Lithuanian capital are five times lower, a study by the Swiss bank UBS has shown. Food products and services in Vilnius are cheaper than in Riga and Tallinn, according to the study. The purchasing power of a salary in Vilnius is almost three times lower than in New York. For example, workers in Vilnius have to work 29 minutes for a kilogram of bread, while workers in New York need to work 12 minutes.
Industry keeps slumping
Lithuania's industrial output and sales edged down by 0.2 percent in July versus June and fell by 15.7 percent compared with the same period a year ago. In January through July year-on-year, the country's industrial output dropped by 17 percent.
The price will not grow
Both Lithuanian power distribution grid operators, Rytu Skirstomieji Tinklai (RST) and Vakaru Skirstomieji Tinklai (VST), said that they would not increase electricity prices for households despite a rise in the value-added tax rate to 21 percent from 19 percent starting in September. Based on preliminary estimations, the expenses of the VST would grow around LTL 2 million this year due to the decision. Electricity prices for households fell by 2 Lithuanian cents to 35 cents per kilowatt-hour in July.
Lietuvos rytas, Lietuvos zinios
Friday, 21st of August
Klaipedos Nafta does not yield
Polish oil group PKN Orlen continues to seek control over Lithuania's state-run oil terminal Klaipedos Nafta (Klaipeda Oil), which is the main export hub for its Lithuanian crude oil refinery Mazeikiu Nafta (Mazeikiai Oil). However, the government does not intend to sell the profitable oil terminal, as it plans to set up a liquefied gas terminal on its grounds.
Energy Minister Arvydas Sekmokas said that the government had not changed its position on Klaipedos Nafta's privatization.
"Klaipedos Nafta will not be privatized. It is a state company and the management of the company will be under the state's control. We are very seriously considering an alternative gas supply; we are thinking about building a liquefied gas terminal," the minister said.
Respublika, Lietuvos Rytas, Verslo Zinios
UBIG to build houses
Ukio Banko Investicine Grupe (Ukio Bankas Investment Group, or UBIG) plans to build two residential quarters in Minsk on plots of land allocated to it by Belarus' authorities so that profits from the sale of apartments could cover the costs of a EUR 250 million sports and leisure complex in Belarus' capital. UBIG intends to build a total of 370,000 square meters of residential area in Minsk.
Investments from Belarus
Belarus' heavy-duty machinery manufacturer Amkodor has purchased industrial premises in the district of Kedainiai, in central Lithuania, and plans to assemble machines there. Amkodor plans to create around 50 new jobs in Lithuania in 2009 and to use it as a springboard for exports to EU countries.
Thursday, 20th of August
Additional LTL 41.98 million
The Ministry of Finance has announced that the Government has decided to distribute LTL 41.98 million for social support. This money will be allocated to social allowances and compensations and support for pupils. Special targeted grants of the state budget of 2009 for municipalities will be also redistributed. The money has been allocated because demand of social support recipients and finances is increasing.
Support in September
The European Investment Fund (EIF) expects that around EUR 579 million (about LTL 2 billion) in support money will reach Lithuania in September. The amount includes around LTL 800 million in EIF support funds for small and medium-sized business; five local commercial banks should start distributing the funds in September.
Lietuvos Rytas, Lietuvos Zinios
Will compensate interest rates
Education and Science Minister Gintaras Steponavicius claimed that university students in Lithuania who take litas-denominated tuition loans from commercial banks will not have to pay interest over 5 percent. He stated a relevant draft governmental resolution would be proposed next week. The Finance Ministry announced on Tuesday that the interest rate would range between 9.88 percent and 11.03 percent for litas-denominated loans and 3.37-3.87 percent for euro-denominated loans.
Wednesday, 19th of August
Company for Russians
Lithuania will continue to keep a close eye on the activities of Nukem Technologies, which Germany's Nukem is selling to Russia's Atomstroyexport, at the Ignalina Nuclear Power Plant (INPP), where it carries out some of the key decommissioning projects. Nukem Technologies, in a consortium with Gesellschaft fuer Nuklear-Service, another German company, is building a 190-million-euro spent nuclear fuel storage facility at the Ignalina plant, one of the key decommissioning projects, and is making preparations for a 123-million-euro project to build a solid radioactive waste treatment center.
Lietuvos Rytas, Respublika, Verslo Zinios
Market has declined
Lithuania's telecommunications market, as measured by revenues, shrank by 5.6 percent to LTL 1.445 billion in the first half of this year, down from LTL 1.531 billion in the same period last year. Mobile communications operators posted combined revenues of LTL 587 million for the six months, down 14.4 percent from LTL 686 million a year ago.
Prime Minister’s optimism
Lithuanian Prime Minister Andrius Kubilius believes that the country's economy has already hit the bottom or will do so soon. Kubilius has claimed that Lithuania's unbiased experts note a slowdown in the pace of economic contraction. According to data from the Lithuanian Statistics Department, the country's gross domestic product slumped by 22.4 percent in the second quarter of this year compared with a year ago.
Tuesday, 18th of August
Klaipeda is losing transit energy
Ports in the Baltic States tranship up to 150 million tons of shipments in a year, more than a half of which is Eastern transit. Last year results of these ports were similar but this year Klaipeda has lost the title of leader. This year Klaipeda port has lost transit shipments for the second time in eight years. Saint Petersburg has lost more than 7 million tons of shipments this year; therefore, Russia has started to defend its economic interest, looking at surrounding ports. 13 million tons of shipments were transhipped in Klaipeda port in the first half year, which was by 18 percent less than last year. The turnover in neighbour ports is increasing or stable this year.
Government borrowed LTL 120 million more
The Lithuanian Finance Ministry sold LTL 120 million worth of six-month Treasury bills, falling due in 77 days, at an average yield of 7.482 percent via an auction on Monday. This issue was launched on May 4, and last reopened on August 3 with LTL 30 million worth of six-month paper sold at an average yield of 7.739 percent. Monday's auction brings the overall issue to LTL 305 million. At Monday's auction, the lowest yield bid was 6.79 percent and the highest yield accepted was 7.99 percent. Bids worth LTL 140.33 million in total were placed for the auction. This Treasury bill issue matures on November 4, 2009.
Prices of cigarettes will increase by a fifth in autumn
When a new excise of cigarettes comes into force on September 1, price of the most popular cigarettes will rise by 20 percent; a pack of cigarettes will cost by LTL 1.25 more. The company which manages kiosks Lietuvos Spauda and shops R-kiosk claims that people are buying more cigarettes than usual. The company forecasts the increase of sales of tobacco products by about 15 percent in August because people tend to store such goods.
Monday, 17th of August
Snaige, the only manufacturer of household refrigerators in the Baltics, has decided to close down its factory in the Russian exclave of Kaliningrad, which has been standing idle since early March, the company said on Friday. Snaige said it would suffer LTL 70 million losses as a result of the failed investment. "The decision to close the Kaliningrad factory was hard but inevitable. We do not see any positive changes in the Russian market, and even after the suspension of manufacturing at the factory, the company continues to incur losses every month," Snaige CEO Gediminas Ceika said in a press release. The refrigerator manufacturer plans to sell the Kaliningrad factory's buildings and move its refrigerator production lines and equipment to the company's main production facility in Alytus.
Verslo Zinios, Lietuvos Rytas
Will wait for decision
The Lithuanian State Food and Veterinary Service (LSFVS) on Friday banned exports to Russia of products from only one dairy company, Ukmerges Pienas. Ukmerges Pienas used a different method for [antibiotics] testing not the most sensitive one. The LSFVS had informed the Russian authority of its decision to ban exports from only one company, adding that he did not know yet what decision the Russians would take.
Extent of construction has reduced
According to the data of the Statistics Department, Lithuanian building companies carried out construction work for a total of LTL 1.583 billion during the second quarter of this year, down 47.8 percent versus the same time last year. However, compared with the first quarter, construction output in Lithuania increased by 25.1 percent in April-June. The total value of construction work performed within the country reached LTL 1.558 billion, down 48 percent versus the second quarter of last year but up 26.7 percent from the first quarter of 2009. The value of construction work carried out abroad was LTL 25.4 million, down 22 percent from the year-earlier and 29.6 percent from the first quarter of this year. In the first half, the value of construction work carried out in Lithuania plummeted by 46.1 percent, year-on-year, to LTL 2.84 billion.
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