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Achema paves way to Western markets

  • 2004-11-25
One of the more recent examples of Baltic businesses taking advantage of EU accession and expanding westward is Achema, Lithuania's nitrogen fertilizer producer.

In September Achema announced that it had bought 50 percent of the Germany-based trader, Agro-Baltic, which for years was Achema's working partner in exporting fertilizer products to Germany and the Benelux countries.

This followed an announcement earlier this year that the company was building a fertilizer terminal in Luebeck on the Baltic Sea, and yet another one in Gent, Belgium.

Achema, which is part of the Achema Group concern controlled by the industrialist Bronislovas Lubys, sells some 85 percent of its output to Western countries - including France, Britain, Scandinavia, Poland and the U.S.A.. Last year the company boosted exports by some 17 percent to 490 million litas (142 million euros).

"We're striving to get closer to the consumers in Western Europe and to react to changes on the market faster," Faustas Kriaucionis, Achema director of commerce, commented at the time.

"Now that we are Europeans, our aim is to gain a foothold [in the area]. That's why we have decided to go there together with our partners," Achema Group President Bronislovas Lubys said on Sept. 1.

"The liquid fertilizer terminal under construction in Luebeck will help us to expand our fertilizer distribution network. Moreover, we have plans to build another terminal in Belgium. This means that we are eliminating intermediaries," Lubys added.

He said that investment in the terminal would reach up to 10 million litas and that operation should begin in the fall of 2005.

Once the acquisition was finalized, Agro Baltic shareholders appointed a new management board. Two representatives, each representing the Lithuanian and German partners, will sit on the board, which will be chaired by an Achema official for two years.

Achema, which is based in Jonava in central Lithuania, said it was projecting a pretax profit of over 17 million litas on sales of 645 million litas this year, after sales of 554 million litas in 2003. The company is 98.44 percent owned by the Achema Group, which in turn is 51 percent owned by Lubys, according to the Baltic News Service.