Report: two titans set to clash over Western Timber

  • 2005-05-04
  • Staff and wire reports
VILNIUS - The country's leading investment group and a major industrial concern were set to clash over control of the rapidly growing Vakaru Medienos Grupe (Western Timber Group), a leading paper reported.

The Verslo Zinios business daily wrote this week that the SBA concern, which recently acquired 50 percent in Western Timber Group, is keen to acquire the remaining shares, but that in doing so it might run into Invalda, a major investor in Lithuania's booming furniture industry.

VMG controls Klaipedos Timber, Giriu Bizonas, a woodchip-board maker, and Sakuona, a Klaipeda-based furniture manufacturer. Last month the three companies reported preliminary sales of 61.6 million litas (17.86 million euros) for the first three months, a rise of 23.6 percent year-on-year. In March alone the group's sales soared by 20.8 percent to 22.2 million litas.

SBA acquired its stake in VMG from Rimandas Stonys, deputy chairman of Geonafta and president of Dujotekana, for an undisclosed sum. Stonys said that he wanted to concentrate his efforts on developing his energy interest.

Sigitas Paulauskas, the other owner of VMG, has said he has no intention to sell his stake.

If SBA were to purchase the remaining shares in VMG, the concern would acquire a planned particle board plant to be built on the territory of Giriu Bizonas in Kazlu Ruda, in southern Lithuania. The plant has been assigned 45.6 million litas (13.2 million euros) in assistance from EU structural funds.

At last week's shareholder meeting, VMG owners appointed Viktoras Adomaitis, SBA's director for production development, CEO.

The SBA concern has a dominant position in the country's furniture industry 's it owns Klaipedos Baldai (Klaipeda Furniture) and has direct or indirect control over five other furniture companies 's and last year the furniture arm of its business posted sales of 305 million litas.

In March it announced that it has joined forces with Germania, a German furniture producer, for a joint venture that will manufacture furniture with a rigid synthetic film covering.

The new 11,000 square meter facility, which is currently under construction, will create approximately 180 jobs in Silute, in western Lithuania. The first output is expected to materialize this summer, company officials said.

Meanwhile, Invalda is also undergoing a boom in its core businesses. Last month it reported earnings of 19.6 million litas for the full 2004, a surge of 64.6 percent year-on-year.

The group's major holdings include 100 percent in Valmeda, operator of Holiday Inn Vilnius and Ecotel hotels, 66.72 percent in Vilniaus Baldai, the country's largest furniture producer, 75 percent in real estate manager Invalda Real Estate, 75 percent in investment company Pozityvios Investicijos, and 30.46 percent in Sanitas, the country's largest pharmaceutical company.

Invalda also controls Finasta, Lithuania's largest financial brokerage.