Snaige wins preferential import duty

  • 2005-08-17
  • From wire reports
VILNIUS - Ukrainian authorities have established a favorable 5 percent import duty for products of the refrigerator producer Snaige, reversing an earlier decision to raise the duty to 25 percent.


The decision follows through on a promise that Ukraine's president had given to his Lithuanian counterpart.

Kestutis Stankevicius, minister counselor at Lithuania's Embassy in Ukraine, told the Baltic News Service that the law on replacement of import duties, which had been signed by President Viktor Yushchenko, has already been published and gone into effect.

The Customs Authority of Ukraine has also restored the previous classification of Snaige's refrigerators. "The formalities have been completed," Stankevicius said.

Snaige sells over 90 percent of its output on foreign markets, with Ukraine accounting for the largest share of exports. But in late July, after Yushchenko had failed to sign a law on reducing import duties on Snaige's refrigerators to 5 percent, the Ukrainian Customs Authority changed the combined nomenclature code applied to the refrigerators to 25 percent.

"Thanks to the great efforts of Lithuania's diplomats, we have got a more favorable import duty for Snaige's refrigerators; however, I have not yet seen any documents to prove that," Mindaugas Sestokas, Snaige CEO, told the Baltic News Service.

He added that the 25 percent tariff on Snaige's refrigerators was in force for approximately two weeks, too short a period to have a negative impact on the company's performance. "We had certain stocks in Ukraine, and we sold the warehoused products," Sestokas said.

Snaige posted 16.1 million litas (4.6 million euros) in consolidated pretax earnings for the first six months of 2005, a decline of 2.7 percent from the year-earlier figure. The group's sales, however, surged 20.3 percent, to 164.79 million litas, from 137 million litas in the January-to-June period of 2004.

For all of 2005, Snaige, which is quoted on the prestigious Official List of Vilnius Stock Exchange, is projecting earnings of 26.4 million litas on sales of 441 million litas.

Hermis Capital, an investment company, held 30.4 percent of Snaige's stock as of late March. Hansabank and SEB group-related customers controlled 41.96 and 6.17 percent stakes, respectively.