Saturday 4th of October, 2003
Swedes are the key to success for Lithuania's furniture manufacturers
One of the largest Lithuanian furniture manufacturers, Vilniaus Baldu Kombinatas (VBK), keeps boosting its sales volume thanks to the collaboration with the Swedish concern IKEA. Moreover, Lithuanian manufacturers lack space in the Western European market; they have aimed at Asian markets.
Viktoras Majauskas, the CEO of VBK and also the president of Lietuvos Mediena (Lithuanian Timber) association, says that furniture manufacturers are on the wave at the moment. September was a record month for the company VBK sold production for LTL 9.165 million, a rise of 14.7 percent if compared to September 2002.
Majauskas noted that VBK focuses on the orders of the Swedish furniture concern IKEA.
VBK reached turnover of LTL 66.582 million for January-September this year, an increase of 7.2 percent from the same period in 2002. The company is planning to post a net profit of LTL 6.5 million and reach turnover of LTL 90 million for this year.
Tourism business is flourishing
Income of Lithuanian travel agencies and other tourism companies accounted for LTL 189.9 million for a first half of this year, a rise of 23.2 percent from the respective period last year.
The Department of Statistics has reported that the income of tourism companies made LTL 125.17 million for the second quarter of this year, an increase of 28.1 percent from 2002.
One of the largest travel agencies in Lithuania, BTI West Express has reported it sold tourism services for LTL 51 million in the first half of 2003, 8 percent rise from January-July 2002.
Novaturas sold travels for LTL 20.2 million over the period, which is by 12.2 percent less than last year.
In January-August this year, 2.57 million foreigners visited Lithuania, a decline of 7.9 percent from 2002.
Flow of news. Beer
Over the nine months of this year, turnover of Lithuanian breweries declined by 7.7 percent if compared to the respective period in 2002, 203.59 million litres down to 187.94 million litres.
In September, Lithuanian breweries sold 20.55 million litres of beer, a 1.4-percent decline from September 2002 when 20.85 million litres of beer were sold.
(Lietuvos Rytas, Lietuvos Zinios)
Friday 3rd of October, 2003
Mineraliniai Vandenys was allowed to acquire Stumbras
In an apparent move to prevent potential abuse of dominance on the market, Lithuania's competition regulators approved the purchase and management of up to 100 percent of equity of Stumbras, top Lithuania's vodka producer, by the alcohol wholesaler Mineraliniai Vandenys, with certain reservations. The Competition Council ruled that Mineraliniai Vandenys should divest a 12.5 percent stake in Artrio-2, Vilnius alcohol wholesaler, upon the purchase of a 91.95 percent stake in Stumbras and takeover of the management of the vodka producer.
Furthermore, a representative of Stumbras shall be recalled from the board of Artrio-2 in a drive to prevent participation in the management of the latter company.
Also, pursuant to the reservations, set forth by the regulators, prices and other terms of deals to be clinched between Stumbras and Mineraliniai Vandenys shall not diverge from the terms and conditions of similar transactions with other companies, thus securing absence of discrimination and preservation of fair competition on the local market.
(Respublika, Kauno Diena, Verslo Zinios)
Export of milk products has grown
Lithuania's dairy exports rose by nearly one-tenth in the first nine months of 2003, year-on-year, whereas imports of milk products declined by almost one-third in the reporting period.
In January-September, exports of dairy products reached 72,897 tons, a rise of 10.9 percent if compared to the respective period last year when the figure made 65,740, the State Food and Veterinary Service has reported.
Imports of milk and dairy products reached 7,65 tons, shrinking by 29.9 percent over the period.
The budget plan has been exceeded
The Ministry of Finance has reported that the state budget has sensed results of the tax reform. According to preliminary data, the former deficit of income disappeared in September while the monthly revenues stood LTL 107.3 million above the target.
Over the nine months of this year, budget revenues were by LTL 57.4 million above the target or by LTL 354 million more if compared to the respective period last year.
"The results are particularly significant in the sector of corporate profit tax - contrary to the objections of critics, the reform of this tax lifted domestic investments and corporate profit margins, moreover, the reform gave a strong boost to tax revenues of the state budget", Dalia Grybauskaite, minister of finance, has said.
In September, actual revenues reached LTL 986.2 million against the scheduled amount of LTL 878.9 million.
Finns decided to look for partners
The Finnish company UPM-Kymmene Corporation that is planning to supply 110,000 square metres of timber for its sawmills is looking for a company that could represent its interests in Lithuania.
"We will be looking for partners by the middle of next year and we will make a decision to launch activities in Lithuania only after we find them. We have already received several applications, but we have not discussed them as yet", Tenis Morand, the head of UPM-Kymene Forest in Estonia, says.
UPM is planning to transport 20,000 square metres of timber via Klaipeda seaport; the amount will be growing every year and will reach 110,000 square metres in 2007. The company is interested in paper-timber birch and softwood.
Thursday 2nd of October, 2003
Sonex Grupe goes shopping to Belarus
UAB Sonex Grupe that registered its secondary company in Belarus in August and is planning expansion to the eastern markets reported yesterday it had acquired one of the leading Belarusian computer manufacturers, Xorex Service.
Arunas Bartusevicius, the CEO and board chairman at Sonex Grupe, says that this was the largest purchase in the company's history. The annual turnover of Xorex Service makes LTL 12 million, the company manufactures some 15,000 computers per year.
In Belarus, Sonex Grupe will be assembling Vector computers and manufacturing servers for Belarusian and Russian markets.
In 2002, Sonex Grupe manufactured 21,764 Vector computers and servers; the company is planning to make 25,000 units this year. As of the end of 2003, Sonex Grupe expects to exceed the annual turnover of LTL 200 million and be the biggest IT group in the Baltic states.
The group's turnover made LTL 62 million for the first quarter of this year.
Veisiga did not kill to birds with one stone
One of the largest Lithuanian sauce producers Vesiga refused its plans to produce mayonnaise and souses near Moscow. Equipment of the company was dismantled and taken to the Kaliningrad region where Agro Produkt, the secondary company of Vesiga, was operating.
"We have attempted to invest in two separate regions in Russia and decided to expand production in the region we worked more successfully", Saulius Grinkevicius, the CEO of Vesiga, says.
The Kedainiai-based company works extremely successfully in Kaliningrad's market; the company has doubled sales of sauce and ketchup this year and presently control some 45 percent of the region's market.
"It is better than we expected; we did not plan such a steep growth", Grinkevicius says.
In January-September, Agro Produkt sold 770 tons of production for RUB 18.64 million (LTL 1.8 million) in the region.
In Lithuania, turnover of Vesiga grew by 7 percent over the eight months of this year if compared to the respective period last year and reached LTL 12.9 million.
More foreign investments
Foreign direct investments (FDI) in Lithuania grew by 6.3 percent over the first half of 2003 and reached LTL 14.018 billion. FDI per capita increased by 6.6 percent up to LTL 4,060 in the reporting period.
Lithuania's Statistics Department has reported that FDI rose by 50 percent over the recent 2.5 years from LTL 9.337 billion, registered in the beginning of 2001.
Wednesday 1st of October, 2003
Attention and environment have predetermined trust in bank
According to a poll carried out by the market research group RAIT in the middle of September, almost half of country's residents, or some 41 percent of respondents, place the second-largest Lithuania's bank, owned by the top pan-Baltic financial group Hansabank, at the top of the rating of the most trusted domestic banks.
Some 21 percent of residents place the leading Lithuania's bank Vilniaus Bankas at the top of the rating, while 12 percent favour Nord/LB Lietuva.
Some 7 percent of the polled singled out Snoras as the most trusted bank among Lithuania's credit institutions. Some 3 percent favoured Ukio Bankas, 1 percent - Siauliu Bankas. The remaining 12 percent of respondents could not single out any Lithuania's bank as the most trustworthy commercial banking institution.
The respondents in favour of Hansabankas mentioned attention to customers as the key reason of trust in the bank. Some 20 percent of respondents pledged affiance with the bank, which had the majority of their relatives and friends among its customers. Further 8 percent favoured e-banking services and modern approach to banking, developed by the bank.
Lithuania's economy continues growing
Preliminary Lithuania's gross domestic product (GDP) grew by 7.9 percent in the first six months of 2003, in year-on-year terms (at constant prices of 2000). Earlier, the preliminary growth of 7.7 percent has been anticipated. In January-to-June period GDP accounted for LTL 25.723 billion in current prices; GDP per capita reached LTL 7,450.
In the second quarter of 2003 Lithuania's economy expanded by 6.7 percent, while in the first GDP soared by 9.3 percent.
"A decline in prices was one of the key reasons behind the expansion of Lithuania's economy. Excluding the effect of prices, the real growth of the economy reached 5.5 percent. That is why people do not see any improvements in their financial situation despite the announcements of spectacular growth of economy", the finance analyst Margarita Starkeviciute said.
The ministry of finance has pegged Lithuania's growth to 6.8 percent in 2003 and 6.2 percent in 2004. Meanwhile, the International Monetary Fund (IMF) predicts that Lithuania's economy will grow by 5.8 percent this year and 6.2 percent next year.
(Lietuvos Rytas, Verslo Zinios)
Lithuania's industry grows faster than Estonia's
In January-August, Lithuanian industrial sales grew faster if compared to Estonia.
Lithuania's industrial sales rose by 14.5 percent in the first eight months of 2003, over the same period of 2002. Meanwhile, in Estonia, the growth made 9.9 percent. In August 2003 versus August 2002 industrial sales increased by 21.2 percent in Lithuania and 7.6 percent in Estonia.
Consumer prices rose by 2.7 and 0.2 percent in Latvia and Estonia respectively while in Lithuania they declined by 0.8 percent.
(Kauno Diena, Verslo Zinios)
Tuesday 30th of September, 2003
Quality and cooperation the shortest way to shops
Both farmers and traders agree that quality of Lithuanian vegetables is getting better. However, farmers do not want to take risk and invest into the vegetable cultivation due to unstable relationships with traders.
Beginning January 1 this year, Lithuanian standards of fruit and vegetable came to force. Laima Grybauskaite, the president of Vaisiai ir Darzoves (Fruit and Vegetables) association, says that not every Lithuanian farmer is ready to cultivate production that meets the standards. Grybauskaite believes that this is because farmers often do not know to whom and for how much they will sell their production. One of the heads of the Lithuanian association of vegetable growers, says that farmers would invest more into new breeds if traders signed long-term agreements, yet presently they mostly offer agreements for 1-2 weeks or, occasionally, for several months.
Meanwhile, traders say that Lithuanian farmer should first learn to cultivate standard production and deliver it packed and clean.
Debt has grown
Lithuania's total public debt grew by LTL 270.6 million to LTL 13.364 billion in August if compared to July, driven higher by the state's guarantees for grain purchases and currency exchange rate fluctuations. The public debt accounted for 24.8 percent of the country's projected GDP for 2003. At the end of August, Lithuania's total foreign debt reached LTL 9.248 billion while the country's overall domestic debt came to LTL 4.116 billion at end-August.
At the end of August, Lithuania owed LTL 1.697 billion to international development organizations (the World Bank, the European Bank for Reconstruction and other international organizations), LTL 452.2 million to foreign government bodies, and LTL 6.929 billion to other foreign creditors.
The state also owed LTL 2.025 billion for commercial banks while the debt to financial institutions and private individuals made LTL 1.96 billion.
Elsis' turnover has declined
Consolidated sales of Elsis, one of the leading Lithuania's IT groups, accounted for LTL 22.2 million in the first half of 2003, a decline of 20.1 percent if compared to the first six months of 2002.
"The results of several large-scale projects did not show themselves off in the financial figures of the first half of the year. The projects are expected to be concluded by the end of this year or in 2004", Remigijus Cibiras, the deputy executive officer at Elsis, says.
In April Elsis signed a three-year agreement worth LTL 9.6 million with the State Tax Inspectorate (STI) on the expansion of integrated tax information system (IMIS).
Furthermore, Elsis took up several large-scale projects at the ministry of interior and the ministry of finance, which had contracted creation of software for the administration of structural funds of the European Union, Cibiras said.
Monday 29th of September, 2003
Farmers to get LTL 0.5 billion in direct subsidies
The total amount of direct subsidies, to be assigned to Lithuania's farmers in 2004, will comprise 55 percent of support granted to the European Union farmers. Lithuania's budget will earmark LTL 191 million for the purpose, while the aggregate amount of subsidies will reach LTL 584 million.
Subsidies would be assigned pursuant to the procedures applied in the EU, which paid subsidies to domestic farmers from the middle of October to April of the subsequent year.
Lithuania and the EU have agreed that the support granted to Lithuania's farmers would comprise 25 percent of assistance, assigned to the EU farmers, and would rise by 5 percent per year until it reached the current EU level. Pursuant to the agreement on Lithuania's accession to the European Union, Lithuania may raise direct subsidies to its farmers up to 55 percent of the EU level.
Direct subsidies, granted to Lithuania's farmers by the EU, would reach LTL 265.35 million in 2004, accounting to the aforementioned support of 25 percent of subsidies, assigned to the EU farmers. The remaining amount of LTL 318.4 million would be allocated from the state budget and the EU-supported rural development programme in equal contributions.
According to the data provided by the market research company TNS Gallup, TV advertising in seconds grew by 18.07 percent over the eight months of this year in Lithuania. The area of advertisement in newspapers declined by 1.14 percent while that in magazines grew by 21.69 percent.
Radio advertising in seconds shrank by 7.52 percent in January-August if compared to the respective period last year. Outdoor advertisement declined by 13.28 percent.
A rabbit grower is concerned about the future
Antanas Sparnauskas, a 54-year-old farmer from Mazeikiai region, has been growing rabbits for three years already. However, the farmer says there is no market for 1,000 rabbits in Lithuania. In Lithuania, rabbit meat is not as popular as in Germany, France or Italy.
Presently, the farmer sells some 60-70 kilograms of rabbit meat per week in local marketplaces. The business would be profitable if he could sell 200-250 kilograms over the period.
Although the situation in the market is not promising, Sparnauskas does not have plans to cancel his business, as the unemployment rate is very high in the region. The farmer believes that Lithuanian rabbit growers will find a way to foreign markets after the country's accession to the EU.
Baltic Weekly MonitorA