Saturday 5th of July, 2003
Representatives of Baltic States discussed trilateral free trade agreement
A law restricting pork import to Latvia has come into force this week. Lithuania has already discussed the list of Latvian products that might be subject to a higher customs duty but the Lithuanian Ministry of Foreign Affairs does not specify the list.
High rank Latvian officials have declared that unless the conflict is solved in the bilateral negotiations, it will have to be solved by the World Trade Organisation. However, Latvians claim that they are sure about the rightness of their position therefore all the sanctions and fines will be applied only to Lithuania.
Lithuanian, Latvian and Estonian officials met on Friday and tried to agree on higher pork export quotas. The Latvian delegation, however, did not have the authority to sign any agreements. Proposals of Lithuania and Latvia will be submitted to the Latvian parliament, which will have to pass the decision.
(Respublika, Lietuvos Rytas)
Start of the pension saving reform
On Friday, the Lithuanian parliament passed a package of legislation setting up a legal framework for channelling part of mandatory state social insurance contributions to pension funds but it left strict requirements for promotion of pension funds in place.
The legislature adopted the government-drafted laws on pension accumulation and additional voluntary contributions.
The law on Pension Reform allows the current pay-as-you-go system to function alongside cumulative pension funds. Starting January 1, 2004, part of payments now going to the state-run social insurance fund, Sodra, can be channelled to pension funds on a voluntary basis.
In the first year of the reform, employees would contribute 2.5 percent of their income to cumulative pension funds, which amounts to an employee's mandatory insurance contribution under the current system (the rest is contributed by employers). This percentage rate will be increased by 1 point annually until it reached 5.5 percent in 2007.
Companies' position in the Lithuanian retail trade market
VP Market, the operator of the largest grocery chain in the Baltic countries, had a 22.4 percent share of the Lithuanian retail market in 2002.
Its main competitor, IKI, was second with a market share of 10.1 percent, followed by ICA Baltic-owned RIMI Lietuva with 5.3 percent, Aib? with 5 percent and Norfa with 4.2 percent.
All four above mentioned chains controlled 47 percent of the Lithuania's market, lagging behind their counterparts in other countries as those usually hold about 80 to 90 percent of food retail markets. Market analysts say the improvement of the figure has been hindered by geographic motives, as it does not pay to open supermarkets in remote rural areas, whereas very big competition in cities prevent foreigners from any attempts to enter Lithuania.
Friday 4th of July, 2003
Lithuania's banking assets increased by 0.2 percent
The aggregate assets of Lithuania's ten commercial banks edged up by LTL 34 million, or 0.2 percent, to LTL 15.974 billion during the first five months of 2003. The total assets grew by LTL 111 million, or 0.7 percent, in May compared to April.
The Bank of Lithuania has announced that the banks' combined loan portfolio increased by 7.9 percent during the five months and reached LTL 7.709 billion as of late May. The total volume of specific provisions fell by 3.4 percent to LTL 163 million.
The aggregate volume of bank deposits rose by 1.2 percent to LTL 11.523 billion during the January-to-May period. Private individuals' deposits, however, shrank by 1.3 percent to LTL 6.728 billion.
The ten commercial banks' own capital totalled LTL 1.843 as of late May, an increase of 6.2 percent since the start of this year. Vilniaus Bankas had the largest own capital, at LTL 863.4 million.
The banks' aggregate stock capital reached LTL 1.110 billion at the end of May.
(Respublika, Verslo Zinios)
Estonians are interested in Lithuanian companies of energy
Eesti Energija, the Estonian company of energy, considers an opportunity to participate in privatization of the Lithuanian networks of energy distribution. "We seek to gather more information and then we will decide what actions to take", Gunnaras Okkas, the CEO of the company, said. Profit of the Estonian electricity and distribution company makes about LTL 476 million. This month, Lithuanian government has announced a privatisation tender of the Rytu ir Vakaru Skirstomieji Elektros Tinklai (East and West Electricity Distribution Network). E.ON Energie, the Lithuanian capital company DNX Energy and the Finish company Fortum are suppositional participants of the tender.
Turnover of Novaturas decreased by 12.2 percent
Sales of the travel agency Novaturas amounted to LTL 20.2 million in the six months of this year, a decline of 12.2 percent if compared to the respective period last year. In January-June, 14.832 people used services of the travel agency, a 10.4 percent rise if compared to the respective period in 2002. According to Vidas Pali?nas, the CEO of Novaturas, the number of travellers increased after the situation in the international market improved.
Novaturas projects turnover of some LTL 50 million for this year, a 7.6 percent rise since 2002. 150 travel agencies sell Novaturas' travels in Lithuania.
Thursday 3rd of July, 2003
Sodra claims that the first quarter was finished without deficit
According to preliminary data, the State Social Insurance Fund (Sodra) exceeded its plans by LTL 2.308 billion during the first quarter of the year. Expenses of Sodra amounted to LTL 2.308 billion in January-June and were by LTL 1.9 million lower than expected. According to Sodra's report, the budget of Sodra was non-deficit though it had been planned that expenses would exceed incomes by LTL 73.2 million. Previously, Sodra had reported that budget deficit made LTL 55.7 million, but the deficit was successfully liquidated.
This year, contributions to Sodra were by LTL 131 million higher if compared to the respective period in 2002.
(Kauno Diena, Respublika, Lietuvos Zinios, Lietuvos Rytas)
Latvian threatens with boycott
The Latvian minister of agriculture Martin Roze has promised to encourage Latvians to boycott Lithuanian goods and fight with Lithuanian production in other ways in Latvia. He plans to undertake anti-dumping means against Lithuania. Aggressive claims of the Latvian minister reduce the chances to achieve an agreement in Vilnius on Friday. Doubtlessly, Lithuanian producers and traders will lose the possible trade war with Latvia because Lithuania's export to Latvia exceeds import from the neighbouring country some four times.
Lithuanian experts claim that Latvia uses the market protection means of the last decade. In a TV show on Wednesday, the Latvian minister of agriculture sarcastically declared that VP Market will not need to close its stores in Latvia as of July 4. By the way, spectators of the TV show supported the boycott unanimously.
The Latvian authorities believe that they have not violated the Baltic countries' Free Trade Agreement. According to Latvia's minister of agriculture, only the World Trade Organisation could prove that Latvia's decision is illegal.
(Verslo Zinios, Lietuvos Zinios)
Snaige posts 10.7 percent sales growth
Lithuania's Snaige, the leading producer of household refrigerators in the Baltic countries, reported preliminary sales of LTL 131.506 million for the first half of 2003, a 10.7 percent increase in year-on-year terms.
Romualdas Raudonis, CEO of Snaige, says Snaige's first-half exports rose by 8.1 percent, year-on-year, and accounted for 95 percent of the overall sales.
The refrigerator manufacturer has not released its financial results for the first half yet. It posted an unaudited net profit of LTL 12.896 million for the first six months of 2002.
(Verslo Zinios, Lietuvos Rytas)
Wednesday 2nd of July, 2003
After getting married, Kalnapilis and Tauras intend to consolidate their positions
Beginning July 1, Lithuanian breweries Kalnapilis and Tauras are working together under the new name AB Kalnapilio-Tauro Grupe. In 2002, the breweries sold 73.36 million litres of beer and controlled 24.4 percent of the Lithuanian market. The overall turnover of both companies constituted LTL 180.27 million; the companies were leading in terms of export.
As of the end of the year, Kalnapilio-Tauro Grupe is planning to reach turnover of LTL 170 million and take 26 percent of the market. In 2004, the company expects controlling 30 percent of the market.
The authorised capital of Kalnapilio-Tauro Grupe accounts for LTL 62.68 million; most of the company's shares are controlled by Danish Brewery Group.
In 2002, Kalnapilio-Tauro Grupe allotted LTL 15 million for investments. Kalnapilis incurred a loss of LTL 11 million while Vilniaus Tauras posted an audited loss of LTL 8.06 million last year.
The company' export constitutes 2 percent of its sales, mostly to Latvia, Kaliningrad and the USA.
"In Lithuania, beer production exceeds its consumption by 40 percent, therefore, we have to look for new markets", Ovidijus Jankauskas, the representative of Danish Brewery Group, says.
(Respublika, Lietuvos Zinios, Verslo Zinios, Lietuvos Rytas)
Klaipedos Nafta loads less
Klaipeda-based oil loading company Klaipedos Nafta loaded 3.389 million tons of oil products over the six months of this year, a decline of 15.3 percent from the respective period in 2002. In June alone, the company loaded 447 thousand tons, which is by 24.5 percent lower if compared to May and 4 percent fewer of compared to June last year.
Ramune Visockyte, the representative of Klaipedos Nafta, says that summer is a complicated period for oil loading companies. In July, the company is planning to launch reconstruction of two containers. Besides, Klaipedos Nafta will rearrange 6 fuel oil containers and two diesel containers in order to get ready for export.
Last year, the company loaded 6.705 million tons of cargo; it expects to load 7 million tons this year.
Finns are interested in scrap metal
Representatives of the Finnish concern Kuusakoski that has recently acquired the Lithuanian Kaunas-based company of metal collection Alumedas say that it is more effective to have both metal collection and metal recycling companies.
"We will continue purchasing scrap metal from other companies, too, yet Alumedas will guarantee us the minimal supply", Pekka Kunnari, the manager for the Baltic region at Kuusakoski Oy, says.
In 2002, Alumedas invested LTL 2 million into the establishment of new metal purchase sites. Last year, the company reached turnover of LTL 17 million and expects to boost it by 50 percent this year.
"We expect to achieve the growth on the account of market redistribution. In Lithuania, some 500,000 tons of scrap metal are collected per year; some 25,000 tons are re-alloyed in local foundries", Robertas Butkus, the head of UAB Alumedas has reported.
Tuesday 1st of July, 2003
An Italian won the tender
Luigiterzo Bosca, president and owner of the Italian wine group Bosca, has been acknowledged the winner of the public tender of Alita, one of Lithuania's four state-run alcoholic beverage companies. The Lithuanian State Property Fund (SPF) is expected to begin negotiations with the potential buyer on Thursday. The winner offered more than LTL 90 million for a 83.77 percent equity stake in the alcohol company, well above the initial selling price of LTL 50 million.
Bosca expects to close a deal on the acquisition of the stake in Alita by the end of the summer. "We will invest in new sparkling wine production technologies and operate in all Baltic countries, Scandinavia, the western part of Germany, Poland and other stets," he said.
(Lietuvos Zinios, Respublika, Kauno Diena, Lietuvos Rytas)
Gross domestic product grows by 9.4 percent
Lithuania's gross domestic product (GDP) grew by 9.4 percent in the first quarter of 2003 if compared to the respective period last year and accounted for LTL 12.21 billion. GDP per capita made LTL 3.5 thousand, a rise of LTL 303 from 2002.
Lithuania reported a 3.9 percent growth rate for the first quarter of 2002. The GDP grew by 6.7 percent in the full year 2002 and reached LTL 50.679 billion at current prices.
In year-on-year terms, the strongest growth rates were recorded in the energy (27 percent), construction (18.3 percent) and manufacturing sectors (16.3 percent). In the manufacturing sector, the biggest rise of the value added was registered in traditional industries, such as production of foodstuff and beverages, 11.7 percent, clothing, 9.0 percent, wood and wooden articles, 28.6 percent, oil products, 13.5 percent, chemicals, 18.7 percent.
The household expenses surged 5.2 percent on the income pushed up by higher wages and curtailed unemployment.
(Respublika, Kauno Diena, Verslo Zinios)
Ingman Vega sold ice cream for LTL 200 million
Lithuanian-Finnish joint venture Ingman Vega, a leading ice-cream producer in the country, has produced over 250 million cups of ice cream for more than LTL 200 million over the 10 years of its activities.
Lithuanian enterprise Vega and Finnish Ingman Foods Oy set up the joint venture in spring 1992. Its new plant in Mazeikiai was constructed in June 1993.
Ingman Vega pioneered in the production of western-type ice cream after Lithuania regained its independence.
(Verslo Zinios, Lietuvos Rytas)
Litexpo profit grew over the first half-year
According to preliminary data, income of Litexpo exhibition centre in Vilnius accounted for LTL 12 million for the first six months of this year against LTL 11 million reported for the respective period last year. Litexpo posted a pre-taxed profit of LTL 4 million for January-June this year, a rise of 11.1 percent from LTL 3.6 million in 2002.
This year, 13 international exhibitions were held in the first half-year; 2,556 companies participated. Number of visitors has also increased from 273,700 in 2002 up to 425,386 this year.
This year, investments into modernisation of the exhibition centre made LTL 2.4 million.
In 2002, Litexpo posted turnover of LTL 15.6 million and earned a profit of LTL 2.5 million.
Monday 30th of June, 2003
Aibe is boosting its sales
Retail trade chain Aibe has posted turnover of LTL 182 million for the first five months of this year, an increase of 8.5 percent from the respective period last year.
As of May 31, Aibe controlled 89 retail trade companies, a rise of 15.6 percent if compared to 2002.
According to the data provided by the Department of Statistics, turnover of small companies selling foodstuff declined by 3.1 percent in January-May this year from the respective period last year while that of large companies dropped by 16.5 percent. Turnover of all Lithuanian companies selling foodstuff rose by 7.9 percent over the period.
(Verslo Zinios, Respublika)
Spindulys will sell its premises
After Turto Bankas has sold the debt of the recently privatised Kaunas publishing house Spindulys for almost LTL 3 million, shareholders of the company decided to sell a complex of buildings. It is expected to receive some LTL 600 thousand for the premises.
"The complex is located in the other place than production process is, therefore, expenditures exceed the income, as maintenance costs are pretty high" Donatas Jazukevicius, the CEO of Spindulys, says.
Shareholders have set the initial price at LTL 450 thousand, yet it is expected to sell the premises for more than LTL 600 thousand.
In 2002, Spindulys reported turnover of LTL 10.632 million.
(Respublika, Kauno Diena)
The state debt has shrunk
Lithuania's total public debt shrank by LTL 181.5 million to LTL 13.147 billion in May, compared to April, and accounted for 24.4 percent of the country's projected GDP for 2003.
The total public debt fell by LTL 16 million, or 0.1 percent, compared to the beginning of this year.
In May, the government met its financing needs by borrowing funds domestically, rather than tapping foreign capital markets. Meanwhile, the government's foreign debt decreased as it repaid LTL 90 million to foreign lenders. Foreign currency rate fluctuations reduced the debt by another LTL 93.4 million.
Lithuania's total foreign debt reached LTL 8.976 billion at the end of May, which represented 68.2 percent of the overall public debt. The domestic debt came to LTL 4.171 billion, accounting for 31.8 percent of the total debt.
The state's debt for commercial banks made LTL 2.122 billion while that to financial institutions and individuals accounted for LTL 1.934 billion.
(Kauno Diena, Verslo Zinios)
Baltic Weekly MonitorA