Saturday 29th of November, 2003
New payment card launched by Lithuanian business leaders
Vilniaus Bankas, Lithuania's largest commercial bank, has launched a co-branded card with VP Market and Senukai, two of the largest retail chains in the Baltics, offering cardholders discounts at stores run by the two chains. This is the first payment card in the domestic market that enables holders to join loyalty programs of two retail chains.
The cardholders are entitled to a credit of Vilniaus Bankas and discounts at VP Market and Senukai stores. Vilniaus Bankas expects that the number of holders of the new card will reach 200,000 within two years.
Australians taste Vikeda's ice cream
Kedainiai-based ice cream manufacturer Vikeda is exporting its production to a number of countries. The company has recently started exporting to Australia and plans to start exporting to Great Britain. Latvians, Russians, Estonians and Germans have been able to taste the ice cream of Vikeda for some time now.
The company's income from export amounted to LTL 1.3 million this year. It is a 30 percent increase compared to 2002. The company expects to export 15 percent of its production next year.
Representatives of Vikeda say that they have great expectations concerning the US market. The company's ice cream can be purchased in Chicago, Florida, New York, Los Angeles and other cities.
Public debt stays almost unchanged
Lithuania's public debt climbed by 0.1 percent, or LTL 17.6 million, to LTL 13.28 billion in October, the Finance Ministry has announced.
"However, this slight increase did not have any impact on the ratio of public debt with gross domestic product. Similar to previous month, public debt comprised 24.7 percent of GDP at the end of October," said Daiva Kamarauskiene, director of public debt management department at the ministry of finance.
Lithuania's foreign debt stood at LTL 9.15 billion as of October 31, representing 68.9 percent of the total public debt. Domestic debt totalled LTL 4.129 billion, accounting for 31.1 percent of the total debt figure.
In the structure of domestic debt, arrears of the state to commercial banks made up LTL 1.988 billion, to financial institutions and private individuals LTL 1.945 billion, and to other public sectors LTL 196.1 million.
Friday 28th of November, 2003
Scandinavian businessmen step into Alytus
Stora Enso Timber, one of the largest manufacturers of wood products, opened a modern sawmill in Alytus. It is the 25th sawmill of the company in Europe and the first in Lithuania. The new sawmill will employ 90 Alytus dwellers.
Swedish and Finnish capital company invested LTL 75 million in Alytus. It has been built in 9 months on the site of an old sawmill.
Stora Enso sawmill will buy most of raw materials in Lithuania. The Scandinavian company plans to process 375,000 cubic metres of wood per year in Alytus. 70 percent of the production will be made of pines and 30 percent of firs. The production will be supplied for the Lithuanian, US, Australian, Japanese and other companies.
New logistics centre in Kaunas
New logistics centre will be opened in Kaunas in December. UAB Militzer&Munch Fortransas and UAB Lavisos Koncernas will establish customs warehouse, import-export terminal and warehouses in the territory of the new centre. The investments into the new terminal reach LTL 5 million.
Venantas Gasparavicius, head of Lavisos Koncernas customs warehouse, says the new logistics centre will have modern warehouse accounting and computerized management systems.
The company currently has 50 employees, registers 55,000 customs procedures and transfers 36,000 tons of cargo.
Sanitas expects to earn LTL 1.2 million this year
Kaunas-based Sanitas is the largest producer of medicaments in Lithuania. The company plans to post LTL 1.2 million net profit this year. If the company matches its plan, it will be a six-fold increase compared to 2002, when the company reported a profit of LTL 201,200.
The updated profit forecast was approved by the company's board of observers on November 26.
The earlier forecasts of the company were not as optimistic. The earlier goal was set at LTL 220,000. However, the company managed to exceed the plan over the first 10 months.
Sanitas is currently in the process of reorganization, which should be completed soon.
Thursday 27th of November, 2003
Stumbras wants to dominate in the Baltics
Stumbras, Lithuania's largest alcoholic beverages company that was sold to Mineraliniai Vandenys earlier this year, posted a pre-audit net profit of LTL 7.265 million for the first nine months of 2003, a 31.9 percent decline over the same period in 2002. The company's nine-month revenues fell by 4.9 percent, year-on-year, to LTL 67.531 million.
New owners of Stumbras plan to be active in the European market as well. Wholesaler of alcoholic beverages MG Baltic, a subsidiary of Stumbras' owner Mineraliniai Vandenys, has contacts with 64 manufacturers in 35 countries. These business ties will be used to expand export of Stumbras' products. The quality of the products is very good but the name of Stumbras is not known in the world.
Mineraliniai Vandenys is in the negotiations with several international companies and expects to secure the licence for bottling well-known brands. Among the most likely candidates is Diageo, owner of Smirnoff, Johnie Walker and Gordon's brand names.
Twists and turns of the dollar
The news about the declining dollar no longer shocks Lithuanian businessmen. They know about the currency rate fluctuation risk and are able to adjust their strategy.
Gitanas Naus?da, president's advisor at Vilniaus Bankas, says some businessmen have changed the currency of their contracts, while others have found new export markets.
Analysts say that one should not expect dollar rate to rise in the nearest future. Foreign experts predict that the dollar rate will go down by another 10-20 percent over the next several years.
Rolandas Kaupys, currency dealer at Hansabankas, says there was a lot of positive news for the dollar in October but the rate showed just a slight growth before plunging down once again.
The cheap dollar is good news for the importers from the United States and Asia. Jolita Numavi?ien?, representative of VP Market retail chain, says the company can promise cheaper Christmas holidays due to the lower prices of imported goods from Asia. Importers of photo cameras, photo accessories, as well as computers and their parts say prices of these goods are very favourable now.
Reorganization of Grigiskes to be completed soon
Grigiskes, Lithuania's leading hardboard and toilet paper producer, gears up to close the takeover of Naujieji Verkiai, the local maker of toilet and corrugated paper.
Upon completion of reorganization, Naujieji Verkiai will operate as a subsidiary of Grigiskes.
Pursuant to the takeover schedule, a new issue of 2,656,336 shares of Grigiskes with a face value of LTL 1 will be swapped into stocks of Naujieji Verkiai with a par value of LTL 10.
One share in Naujieji Verkiai has been valued at LTL 16.34, while one share in Grigiskes has been pegged at LTL 1.79 for the share swap transaction, according to which 1 share in Naujieji Verkiai will be swapped into 9.15 shares in Grigiskes.
Grigiskes and Naujieji Verkiai plant to reach an aggregated turnover of LTL 94 million and reach profit of at least LTL 5.1 million. The expected profit would be an increase of 67.2 percent in year-on-year terms.
Wednesday 26th of November, 2003
Lithuanian insurance market grows by 10.1 percent this year
Lithuania's direct insurance market grew by 10.1 percent in the first ten months of 2003 year-on-year, with gross written premiums reaching LTL 689.127 million.
Direct non-life premiums edged down by 0.7 percent, year-on-year, to LTL 521.002 million, accounting for 75.6 percent of the overall premiums, while life insurance premiums soared by 66.2 percent to LTL 168.125 million.
The market supervisory authority attributed the fall in the overall non-life premiums to a 21.5 percent decline in compulsory motor third-party liability insurance premiums. Excluding the compulsory motor insurance segment, the non-life market showed a 15.1 percent growth this year.
Lietuvos Draudimas group is the leader of both life and non-life insurance markets this year. The company controls 35.5 percent of non-life insurance market and 50.2 percent of the Lithuanian life insurance market.
KristiAna will expand in large supermarkets in Latvia
UAB KristiAna, owner of the perfumery and cosmetics outlet chain in Lithuania and Latvia will open a renovated outlet in Siauliai. It is the 14th store owned by KristiAna in Lithuania.
Next year, the company plans to expand its business in Latvia, where it owns just one store.
Virginija Godelaitiene, chief executive of KristiAna, says the company will open up to 10 new stores in Latvia, while no new stores in Lithuania are in plans. Godelaitiene says the number of new stores in Latvia will largely depend on the expansion of large retail chains in the country. The strategy of the company is to open new stores in large shopping centres.
The ten-month turnover of KristiAna this year grew 22 percent this year compared to the same period last year. Virginija Godelaitiene refused to provide the exact numbers of the company's financial results.
PakMarkas found partners in Tallinn
Lithuanian packaging and marking company UAB PakMarkas participated in the international exhibition of food industries Food Fair 2003 held in Tallinn. The exhibition proved to be a successful one for Vilnius-based company as it found several new partners there. Representatives of the company predict that the new business ties will increase company's revenues by LTL 0.6 million.
Ronaldas Vaitiekunas, marketing director of PakMarkas, says the Finnish companies dominated the Estonian packaging and label businesses previously. However, PakMarkas managed to gradually push the Scandinavians from Estonia, rejoices Vaitiekunas. He expects PakMarkas to offer its solutions to Finnish enterprises in the nearest future.
Nine-month turnover of the company this year was LTL 29.6 million, which is a slight 0.4 percent decline compared to the same period last year.
Tuesday 25th of November, 2003
Furniture manufacturer Ergolain grows in Vilnius
Siauliai-based group Ergolain has expanded its activities in Vilnius and expects its turnover to increase 1.5-fold this year compared to 2002.
Ergolain group controls four furniture manufacturers and trading firms in Siauliai, Klaipeda and Vilnius. Its nine-month turnover of LTL 6 million exceeded the annual turnover of last year.
One of the company's owners Romualdas Breksta says the growth is mainly due to the establishment of Ergolain Projektai subsidiary company in Vilnius. The establishment of the new subsidiary enabled the group to attract a lot more orders. Ergolain received the order from the Latvian social security agency to create the style of the agency's customer care centres and manufacture furniture for the centres as well. Exports of Ergolain to Latvia amounted to LTL 0.6 million this year.
Decision on actions against rumour spreaders will be taken later
Vilniaus Bankas, controlled by the Swedish Skandinaviska Enskilda Banken, will wait for the conclusions from the legal institutions before deciding on actions against the persons, who are responsible for rumours about the financial crisis at the bank.
Julius Niedvaras, president of Vilniaus Bankas, said the bank is a business institution, thus it pays all of its attention to the business development and not to political events.
If the bank decides to take actions against the responsible party, it will announce the exact losses, including losses suffered by not being able to attract new clients.
Previous reports said the bank lost LTL 500 million at the end of last year after rumours about poor financial situation in Vilniaus Bankas started going around in Lithuania. Niedvaras says the bank also suffered losses by refinancing the lost deposits.
(Lietuvos Zinios, Verslo Zinios)
Lithuanians no longer afraid of debts
Data provided by market research company TNS Gallup shows that 49 percent of households have spare money this year, while 68 percent admit they can save them. The numbers are up 6 and 8 percent respectively from last year.
The research revealed another tendency apparent in Lithuania. People are inclined to take credit or use leasing services for the purchase of the more valuable things than saving the money.
Data of the research shows that the number of households that have taken loans has increased by 2 percent up to 6 percent over the past year. Leasing services have been used by 19 percent of households, up by 8 percent, this year.
The same research shows that 64 percent of households plan to take loans for the purchase of computer equipment, 55 percent will use credits for the purchase of real estate, while 42 percent will buy household utilities using a loan.
(Lietuvos Zinios, Respublika)
Monday 24th of November, 2003
Asia invests in Klaipeda
Thailand-based company Indorama decided to build a raw plastic plant in Klaipeda. The value of the project is estimated at EUR 80 million. The plant will be the biggest investment project of the Asian capital in Lithuania.
The new plant, which will be built in the Free Economy Zone, will produce polymeric material for packages. Some 120 people will be employed at the plant.
The investors plan that the capacity of the plant will reach 180,000 tons of raw plastic per year. Some 80 percent of the production will be exported, while the rest will be sold in Lithuania. The first stage of the construction should be completed in November of 2004, while the final stage of the construction should end in December of 2005. The yearly turnover of the plant is expected to be USD 150 million.
Representatives of Klaipeda Free Economy Zone say that companies from Denmark, Lithuania and Russia should soon start the construction of their plants as well.
Verslo Zinios, Kauno Diena
Compulsory insurance market down in Lithuania`
Written premium income in Lithuania's compulsory motor third-party liability insurance segment totalled LTL 176.794 million in the first ten months of 2003, down by 21.9 percent from LTL 226.319 million a year ago, preliminary data released by the State Insurance Supervisory Authority showed.
In October, 11 domestic insurance companies providing compulsory motor insurance coverage posted LTL 7.8 million in written premium income, a 29.3 percent decline in year-on-year terms.
Standard insurance contracts raised LTL 139.124 million in premiums during the ten months of 2003, down by 23.2 percent on the same time last year. Group contracts generated LTL 3.761 million in premiums, a 3.2 percent drop year-on-year, while cross-border insurance raised LTL 33.908 million in premiums, down by 17.8 percent year-on-year.
Foreign beer is not a competitor for the Lithuanian breweries
Foreign beer finds it hard to find its place in the Lithuanian market. The sales of well-known beer brands are constantly declining in Lithuania.
Although foreign-brewed beer occupied 20 percent of the market in the early years of the Lithuanian independence, its market share is only 3-4 percent now. Local beer won the battle with the foreign brands after large investments into the Lithuanian breweries had been made.
The most popular foreign beer in Lithuania is the Estonian Bear Beer. It is followed by such names as Holstein, Bavaria and Faxe.
Representatives of a beer importing company Vienas Pasaulis say that the import tax that results in high retail prices is the main reason, why the foreign beer is loosing the competitive battle. Vienas Pasaulis hopes that the market share of foreign brands will increase after Lithuania officially joins the European Union and import taxes are abolished.
Baltic Weekly MonitorA