Observer "Lietuva"

WEEK 20th

Saturday 17th of May, 2003

Image leaders remained the same
The survey conducted by SIC Rinkos Tyrimai, the Lithuania's biggest market research company, revealed that Omnitel mobile operator, VP Market retail chain operator, Kraft Foods Lietuva, Vilniaus Bankas, and Lietuva Statoil held leading positions as top image companies this year again.
Respondents of a poll were asked to use a 10-point system to rate 31 local company paying biggest attention to their situation in the market, a degree of public awareness about them, and public attitude.
Survey director of SIC Rinkos Tyrimai Mindaugas Degutis pointed to a deteriorated image of local dairy firms, which fell victims to the farmers' dissatisfaction with milk delivery prices.
Lithuanian Airlines (LAL), SBA concern, and French Dalkia were praised for their success in creating the company's image.
The survey showed that Lietuvos Telekomas, Ignalina Nuclear Plant, Lietuvos Draudimas insurance company, Mazeikiu Nafta oil refinery, and Lietuvos Gelezinkeliai railway operator were the five best-known companies in the country.
(Lietuvos Rytas, Lietuvos Zinios, Respublika)

The court arrested shares of the largest shareholder in Alytaus Tekstile
Hong Kong's Asean Interest Limited is no longer able to dispose freely of its 47.3 percent share portfolio in Alytaus Tekstile – Vilnius Court arrested the share package in order to ensure temporary precautionary measures for the lawsuit of the State Property Fund against the foreign investor. The Hon Kong's company has not implemented the obligations to invest LTL 240 million and to keep 3,500 working places in the Lithuanian company (number of employees was reduced down to 2.8 thousand).
PricewaterhouseCoopers audit company has earlier signalled its intent to transfer the aforementioned share portfolio in Alytaus Tekstile to another firm within Singapore's Tolaram Group, Estonian Tolaram Investments. Tolaram Investments presently owns 26.8 percent of Alytaus Tekstile stock, acquired before the 1998 privatisation agreement on the Lithuanian company with Asean Interests Limited.
In 2002, Alytaus Tekstile incurred a loss of LTL 8.865 million and posted turnover of LTL 128.9 million. The company incurred a loss of LTL 2.737 million for the first quarter of this year.
(Kauno Diena, Lietuvos Zinios)

Retail trade grew by 8 percent over the quarter
Lithuania's total retail sales rose by 8.1 percent in the first quarter of 2003, compared to the same period in 2002. Excluding car sales from the overall figure, the growth rate was 4.9 percent, the Statistics Department has reported. Over the year from March 2002 to March 2003, the total retail sales soared by 25 percent. Excluding car sales, the rise was 11.9 percent.
Based on the preliminary data, overall turnover in retail trade enterprises, sale of motor vehicles and motorcycles, their maintenance and repair, and retail sale of automotive fuel made LTL 3.754 billion in the first quarter of this year. Sales in the food product, beverage and tobacco sector increased by 6.6 percent in the first quarter while sales of non-food products, excluding cars, went up by 2.7 percent.
(Lietuvos Zinios)

Friday 16th of May, 2003

Klaipedos Transporto Laivynas was sold
A majority stake in the Lithuanian shipping company Klaipedos Transporto Laivynas (KTL) was sold for LTL 48.668 million. The privatization deal was closed after the two unsuccessful government's attempts to sell the company in 1999 and 2002.
"We are satisfied with the outcome of the transaction. We together with our partners now can proceed with the actual planning of Klaipedos Transporto Laivynas' future operations," Vytautas Lygnugaris, CEO of Limarko Laivininkystes Kompanija, said after signing the agreement on the acquisition of 80.89 percent of shares in KTL. He unveiled plans to merge Limarko Laivininkystes Kompanija, a recently established company, with KTL.
KTL announced an audited loss of LTL 10.821 million for the full year 2002 on revenues of LTL 70.896 million. The company blamed the loss on provisions for bad loans and the depreciation of the US dollar against the litas. KTL is projecting a profit of LTL 1.734 million on revenues of LTL 63.18 million for 2003.
(Lietuvos Zinios, Verslo Zinios)

Grigiskes paper plant boosts its profit
AB Grigiskes paper plant reported a turnover of LTL 24 million for January-April, an increase of 16 percent if compared to the respective period last year when the figure made LTL 20.7 million. The company's profit rose by 4.6 times up to LTL 2.377 million.
In 2002, the overall income of the company made LTL 66 million while its net profit accounted for LTL 3.49 million.
(Verslo Zinios)

Siauliu Banko Faktoringas has posted higher profit
The increasing demand for factoring (trade and current assets financing) services has changed Siauli? Banko Faktoringas' plans. The company expects to earn a net profit of LTL 0.3 million for 2003, 50 percent more than it anticipated at the beginning of the year.
In January-April this year, Siauli? Banko Faktoringas (SBF) earned a net profit of LTL 80,000.
Vidmantas Budzinskas, the head of SBF, believes that the factoring market will be even more active in the second half of the year. He has noticed that demand for the international factoring services is also growing. As of April 1, international factoring made some 30 percent of SBF' factoring portfolio.
In terms of the portfolio, SBF was the fourth largest company in the Lithuanian market; Hansa Lizingas and Vilniaus Bankas were leaders with 51.57 and 41.45 percent of the market respectively.
(Verslo Zinios)

Thursday 15th of May, 2003

PakMarkas is getting ready for alcohol market expansion
Lithuanian package manufacturer, UAB PakMarkas, says that after the liberalisation of alcohol market in Lithuania, some 15-25 new players might appear in the market. The company is planning to invest some LTL 4 billion into production modernisation in order to get ready for the market expansion.
"The Estonian experience showed that all alcohol producers and exporters launch intensive production process improving programs after the liberalisation, which leads to new labels and packaging for their products. Only drinks in bottles of original shape marked with prestigious labels and caps can draw customers' attention in the saturated alcohol market," Ronaldas Vaitiekunas, head of marketing unit of PakMarkas, said.
Vaitiekunas underlined packing and labelling producers are looking forward to the liberalisation of the alcohol market hoping to earn from their new and old customers.
(Verslo Zinios)

Post services are likely to get cheaper
After the state company Lietuvos Pastas (Lithuania's Post) will turn into a joint stock company in 2004, there will be a possibility to reduce prices for postal services, the CEO of Lietuvos Pastas, Jonas Salavejus, reported in the session of the Committee of Information Society Development yesterday.
According to Salavejus, mail and package delivery should get cheaper, too. Salavejus believes that after Lietuvos Pastas turns into a joint stock company, it will be able to manage its property more effectively, as presently some 10 percent of premises are unnecessary. "We would like to sell the huge building in Vilkaviskis and acquire better premises in Marijampole, yet such operations are prohibited by laws", Salavejus explained.
In 2002, Lietuvos Pastas posted a profit of LTL 5.9 million while in 2001 the figure made LTL 2.9 million. Last year's profit was the largest over the last decade. In 2002, Lietuvos Pastas received an income of LTL 142.6 million.
(Lietuvos Zinios, Verslo Zinios)

Insurers are waiting for companies to take care of their employees
Over the first quarter of the year, the secondary company of NORD/LB Lietuva bank, LZUB Gyvybes Draudimas (LZUB Life Insurance), wrote LTL 690,000 in premiums, an increase of 109 percent if compared to the respective period in 2002; the company reported a net profit of LTL 280,000.
"This year, number of companies insuring their employees should increase", Aist Rudzinskyt, the head of LZUB Gyvybs Draudimas forecasts.
In January-March in 2003, life insurance premiums collected by Lithuanian companies increased by 80.7 percent if compared to the respective period last year while payments in claims declined by 37.2 percent.
Over the first quarter of this year, 7,900 life insurance agreements were signed; the figure made 13,900 for the first quarter last year.
(Verslo Zinios)

An ATM for blind people – in Kaunas
Lithuanian Hansabankas controlled by the financial group Hansabank has installed the first automated teller-machine (ATM) for blind people in the Baltics.
"The investment into the project made LTL 50,000. We believe that it will encourage the visually handicapped to use our bank services on their own and bring them closer to the latest banking technologies available today for blind people in other European countries," Antanas Danys, the head of Elelctronic Banking Department, said.
Hansabankas unveiled its plans to install a few more ATMs for blind people in future.
An ATM for weak-sighted was manufactured based on a standard analogue by replacing the common keyboard with a special one with Braille letters and installing a special audio devise, which reads the text back to the customer.
(Lietuvos Rytas)

Wednesday 14th of May, 2003

Hronas to expand its network abroad
The leading Lithuania's manufacturer of plastic and wooden windows, Hronas, is planning to establish its departments in Sweden, Great Britain and France this year. The company will allot some LTL 2.5 million for the expansion. It is expected that turnover of the company's foreign departments will reach LTL 9 million for 2003.
Valdemaras Eicas, the CEO of Hronas, says that this year, the company is planning to sell more windows in foreign markets and reach the overall turnover of LTL 75 million, a rise of 22 percent if compared to 2002.
Last year, Hronas exported production for LTL 5 million to Denmark, Latvia, Belarus, the Netherlands and Island.
(Verslo Zinios, Lietuvos Rytas)

Rokiskio Suris acquired 10 percent of shares in Panevezio Pienas
Lithuania's largest dairy group Rokiskio Suris has boosted its up-to-now 25 percent stake in Panevezio Pienas dairy through acquisition of a further 10.3 percent portfolio via direct transactions at the National Stock Exchange on Tuesday. The company paid LTL 2.23 for a LTL 2 value share.
"We repurchased the shares from a few major holders. Nikas Nikolaidis sold his stake, too," the group's operational chief officer Dalius Trumpa has reported.
The national Competition Council had previously sanctioned Rokiskio Suris' acquisition of a 35.3 percent share in Panevezio Pienas in order to avert a dominating position in the market.
The country's number two dairy group Pieno Zvaigzdes has a 50 percent portfolio in the Panevezys dairy.
Verslo Zinios, Lietuvos Rytas, Lietuvos Zinios

Venta is boosting it turnover
Siauliai-based manufacturer of chairs and tables posted turnover of LTL 17.578 million for January-April this year, an increase of 35.4 percent if compared to the respective period in 2002 when the figure made LTL 12.983 million.
The company that exports some 97 percent of its production abroad is working profitably this year. The company posted an unaudited net profit of LTL 911,000 for the first quarter of this year, an increase of 2.7 percent from LTL 887,400 for the first quarter in 2002.
Verslo Zinios, Lietuvos Rytas

Lietuvos Telekomas will dismiss up to one-fourth of its employees
Lithuania's operator of telecommunications, Lietuvos Telekomas (LT), is preparing for the changes in the company's structure, after which the number of company's employees will decline by 25 percent. The new company's structure is to be ratified on May 30. The new general manager of LT Kjell-Uve Blom is to discuss the company's restructuring with trade unions on May 23.
The Network Department of Lietuvos Telekomas reported that 580 employees out of the current 800 will be left after the restructuring. Kornelijus ?elutka, the project manager of Prime Investment, claims that the company will undergo restructure due to reducing profit and coming of new competitors to the fixed-line market. In the first quarter report, LT declared that it spend LTL 5 million on employees' dismissal. The company's net profit amounted to LTL 8.5 million, or threefold smaller than over the same period last year.
In 2002, Lietuvos Telekomas discharged a fifth of employees and reduced the related company's expenses by 20.5 percent year-on-year.
(Verslo Zinios)

Tuesday 13th of May, 2003

Siauliu Tauras to offer flat-screen TVs
Siauliai-based manufacturer of TVs, UAB Siauliu Tauro Televizoriai (STT) is planning to launch production of flat-screen TVs together with Panevezys TV tube manufacturer, Ekranas. It is expected that the TVs designed for Western European markets will make up to 20 percent of the company's sales.
In June, the company will start manufacture of 21-inch flat screen TVs while 15-inch TVs should be presented at the end of August.
Saulius Batavicius, the head of finance at STT, says that there are no 15-inch flat-screen TVs in the Western European market at the moment; Siauliai company will be the first to manufacture them. Presently, 14-inch TVs make 42 percent of the company's exports to western markets.
This year, Siauliai-based company is planning to sell 500,000 TVs, a rise of 70 percent if compared to 2002 while sales to Russia are expected to grow 4.5 times and reach 240,000 TVs. STT anticipates the record turnover of LTL 211 million for 2003, an increase of 80 percent from 2002. Last year, the company posted a net profit of LTL 204,176 million. STT is planning to allot some LTL 2 million for investments.
(Verslo Zinios)

Credit unions posted a profit of LTL 196.1 thousand
Credit unions that belong to Lietuvos Kredito Unij? Asociacija (Lithuania's Association of Credit Unions or LACU) posted a profit of LTL 196.1 thousand for January-April this year, 10.3 times more if compared to the respective period last year when the profit made LTL 19 thousand.
As of the end of April, the overall assets of the association members constituted LTL 83.562 million while their capital made LTL 9.951 million. The sum of deposits accounted for LTL 65.023 million, a rise of 91.9 percent from 2002.
Presently, 54 credit unions are operating in Lithuania; 46 of them belong to LACU.

Snoras is waiting for permission from the Bank of Lithuania
The fourth largest commercial bank in Lithuania, Snoras bank, is asking Lithuanian Securities Commission to register a new LTL 25 million worth share issue.
Snoras has already received remarks from the Bank of Lithuania and the Securities Commission on the information provided. The whole new share issue is to be acquired by the new owner of the bank – Russian Konversbank.
The new share issue will have to be distributed within 30 days after it is registered in the Securities Commission and all permissions from Lithuanian or foreign institutions are received. Nominal value of a share will be set at LTL 10.
(Lietuvos Rytas, Verslo Zinios, Lietuvos Zinios, Respublika)

Monday 12th of May, 2003

Mazeikiu Nafta to resume production and launching new projects
After having finished the planned major repairs, the Lithuanian oil refinery Mazeikiu Nafta (Mazeikiai Oil) is working under the usual pace this week. During the repairs, employees of Mazeikiu Nafta and the specialised contractors' companies implemented projects of different level including the Modernisation Program Project.
Lithuanian contractors and Mazeikiu Nafta employees accomplished some 90 percent of the works while the rest was made by foreign contractors. Installation of PENEX equipment of isomers was also one of the projects implemented during the major repairs. After the new equipment is launched, quality of MN production will considerably improve.
Nelson English, the CEO of Mazeikiu Nafta, says that the major repairs were accomplished following the highest standards of industry.
(Respublika, Verslo Zinios)

Producers of bodyworks are growing at a rapid pace
The secondary company of the German concern Schmitz Cargobull, Panevezys-based Schmitz Cargobull Baltic raised its turnover by LTL 12 million and boosted its profit 4 times for the financial year 2002-2003 of compared to 2001-2002. The growth was predetermined by investment programs and the company's expansion to the new western markets.
Raimundas Petrauskas, the CEO of Schmitz Cargobull Baltic, says that last year, the company was successfully consolidating in the new markets. "Poland's and Denmark's customers welcomed us, as the producers of high quality production, extremely favourably", he says.
Last year, Schmitz Cargobull Baltic sold single bodywork to Poland while it already has an order for 30 bodyworks for this year. Export to Poland makes 30 percent of the company's exports. The company intends working hard in order to thrust into Swedish, Norwegian and Finnish markets.
Last year, Schmitz Cargobull Baltic invested LTL 2.74 million into the company's expansion and development; the sum will make LTL 4 million this year.
Schmitz Cargobull Baltic sells some 15 percent of the production in the local market; the company has recently won a tender organised by Sanitex to manufacture 55 isothermal bodyworks for Renault automobiles.
(Verslo Zinios)

According to preliminary data, the national railway company Lietuvos Gelezinkeliai (Lithuanian Railways) reported a 16 percent increase in freight traffic for the first four months of 2003, in year-on-year terms. The company said it handled a total of 13.380 million tons of freight during the first four months on 2003.
In year-on-year terms, international freight volumes grew by 30 percent to 12.14 million tons, yet domestic traffic shrank by 43.4 percent to 1.24 million tons.
Last year, the figure made 2.19 million tons.
(Verslo Zinios)

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