RIGA - Merks, the Latvian division of one of the largest Baltic construction companies, has signed an agreement on building a new plant for Latvia's Valmieras Stikla Skiedra (Valmiera Fiber Glass), the company announced this week.
Merko Ehitus, Merks' parent company, said the contract is worth 3.7 million lats (5.2 million euros), with plant construction to be completed by next April.
In all, VSS plans to invest 24.3 million lats in total in the new production unit. Finance director Imants Saulitis told the Baltic News Service that the company intends to foot the bill with its own funds and bank loans but wants the government to grant a 40 percent tax rebate for the project.
The Latvian government on Sept. 6 approved a 40 percent tax rebate for the new plant. The Economy Ministry will draw up an application to the European Commission for planned support.
The Economy Ministry stated that 16.5 million lats of the project, which will take 15 months to complete, would be spent on new equipment and technologies, while 4.6 million lats will be spent on construction and installation. VSS is planning to create 200 new jobs with the new plant.
After completion, the company expects to increase exports to 39 million lats in 2007, then to 44 million lats in 2010 and 52 million in 2015. In 2004, VSS exported products worth 25 million lats of output.
This year the company has posted earnings of 2.5 million lats, or 27 percent more year-on-year, and has raised sales by 23 percent to 32.8 million lats.
Among VSS' owners are Germany's P-D Glasseiden Oschatz GmbH with (45.3 pct), Vitrulan Textilglas GmbH ar (30.8 pct) and Skandinavska Eskilden Banken Ab (8 percent).