VILNIUS - The owners of Stumbras, one of Lithuania's top producers of alcoholic beverages, announced that they were investing in a new production facility not far from Kaunas.
Darius Mockus, president of MG Baltic, a multi-business conglomerate that owns Stumbras, told a news conference on May 9 that the company last year purchased a plot of land close to Kaunas for some 11 million litas (3.2 million euros) in an effort to move production out of the downtown area.
Pre-project work is underway on an 8.7-hectare plot close to the Via Baltica highway, Mockus said.
"Relocation is not an end in itself. It has to be economically viable. We link it with sales volumes and an economic benefit," he said.
"We have bought the plot, and we are designing and planning a modern plant, but we will not start building it until we are certain that we will increase our export capacities to the required level," he said.
The new plant is located so that it will expedite export to Poland, Stumbras' strategic export market, Mockus said.
Exports accounted for around 10 percent of Stumbras' total sales last year and are expected to growth further this year. In 2010, the company expects to sell about 40 percent of its products to foreign markets.
MG Baltic, for its part, announced that it was postponing plans for an IPO on the advice of its advisor, Suprema. Mockus said that the current environment was not favorable for IPOs.
Raimondas Kurlianskis, the group's vice-president, said that the plan was to put around 22 percent of shares in Stumbras up for sale, which would increase its free float to approximately 29 percent.
If the group decides to sell significant stakes in Stumbras and MG Baltic Media, another subsidiary, after the market recovers, it is possible that these companies will be added to the blue-chip Main List of the Vilnius Stock Exchange.
For a company to be listed on the list, it must have at least 25 percent of its shares available for public trading.
Stumbras reported sales of 168 million litas in 2007, up 65 percent year-on-year. Earnings soared 65 percent to 32.7 million litas.
Mineraliniai Vandenys, an MG Baltic subsidiary, held a 93.3 percent stake in Stumbras at the end of last year.