Polish firms eye booming Lithuanian construction market

  • 2006-09-07
  • From wire reports
VILNIUS - Polish businessmen have targeted Lithuania's construction market and are taking an active part in various construction tenders announced in Lithuania, the Verslo Zinios business daily reported.

"The Poles' active participation on [the Lithuanian] market affects local builders and the timber industry, since Poland is raising the prices of raw material in our country," said Dalia Matukiene, president of Alytus Land Businessmen Association.

The Poles have only been declared winners in a few tenders; however, the situation might change radically in the nearest time, she warned. "Our companies will face problems. Competition is becoming harsher. While we're losing labor, our neighboring rivals are managing to find workers 's since Poland is so large," Matukiene said.

In most cases, Polish construction companies submit applications for subcontractor works, the paper wrote.
Lithuania's construction companies made attempts to enter the Polish market more than six months ago. However, the attempts failed since the Polish companies offered much cheaper services on their home market.

Now similar developments were apparent on Lithuania's market, Matukiene noted.
"Their companies are large, and they can dump elsewhere. I think that the Poles are seeking to go east and wish to enter Russia's market via Lithuania," said Antanas Minkevicius, CEO of Grinduva, the industrial floor maker. He admitted that the company had lost quite a few orders from late 2005, which were awarded to Polish firms offering cheaper prices.

Lithuania is currently undergoing a construction boom, with prices for equipment and supplies rising rapidly. The country's one cement maker is unable to keep up with demand.

At the end of August, Lithuania's Statistics Department reported that construction prices had jumped 9.8 percent in July compared with the same period a year ago.

Overall, construction prices edged up 1.3 percent in July from June.
Year-on-year, residential construction prices rose 10.7 percent, non-residential construction 8.9 percent, and engineering structures by 10.3 percent.

Month-on-month, wages and overhead costs increased by 2.2 percent and prices for construction materials and products were up 0.8 percent, which had the biggest impact on the construction price index, according to the report.
The per-hour cost of construction equipment operation grew by 0.8 percent over the month