Germany's Lidl interested in Zemaitijos dairy

  • 2004-07-01
  • From wire reports
VILNIUS - Zemaitijos Pienas, one of Lithuania's leading dairies, said this week that it expected to conclude a deal with Germany's retailer Lidl on taking over the dairy's retail network.

"We are looking for an operator for our retail chain. We expect to reach a deal on this with the German chain Lidl this autumn," Algirdas Pazemeckas, CEO of Zemaitijos Pienas, was quoted as saying.Zemaitijos Pienas' retail chain of 92 stores posted sales of 48 million litas (13.9 million euros) in 2003.
Lidl, which is controlled by the German group Schwarz, is one of Europe's largest retailers, boasting several thousand retail stores across the continent. Lidl is planning to expand into Hungary and Slovenia this year after opening 30 stores in the Czech Republic last year.
There have been reports that Lidl has been looking for plots of land in Estonian to launch operations there as well.
Total sales of the Schwarz Group, which has around 5,600 stores, reached an estimated 21.7 billion euros in 2003, of which sales of the Lidl chain were about 20 billion euros.
Zemaitijos Pienas is transferring the ownership of its retail network and other noncore assets to Zemaitijos Pieno Investicija, a subsidiary it recently set up in order to attract a strategic investor.
As part of the reorganization, Zemaitijos' real estate management operations are also expected to be split into separate businesses, according to the company's prospectus submitted to the securities commission.
"In the future, both companies may be split between their shareholders. Algirdas Pazemeckas, head of Zemaitijos Pienas, may retain the milk processing business, while Zemaitijos Pieno Investicija may be taken over by Hermis Fondu Valdymas [an investment firm]," said Arunas Rascius, Prime Investment project manager.
ZPI has already taken over a number of assets from shareholders, including 100 percent in Baltijos Mineraliniu Vandeny Kompanija, the producer of mineral water and soft drinks, 85.93 percent in Klaipedos Pienas, 87.82 percent in Silutes Rambynas, 60.29 percent in Zemaitijos Prekyba, and 100 percent of Naujosios Palangos Duona, a local bakery.
Pazemeckas stressed that Zemaitijos Pienas was not considering a sale of its dairy.
ZPI has an authorized share capital of 10.5 million litas. Its major shareholders include Pazemeckas, with 28.05 percent stake, Rokiskio Suris, another leading dairy producer, with 11.47 percent, and Sweden's East Capital Asset Management with 5.24 percent.
The shares of Zemaitijos Pieno Investicija may be entered into the Current List of the National Stock Exchange, pending the decision of ZPI's board.
The consolidated net earnings of the Zemaitijos Pienas Group under IAS surged to 7 million litas in 2003.