Summed up

  • 1998-11-26
KLAIPEDA WILL PRODUCE STAINLESS STEEL: U.S. steel processing company Penninox and its largest shareholder, Center Bridge Technology, will construct a stainless steel processing plant in the Klaipeda Free Economic Zone. Construction is scheduled to begin April 1 next year and should be completed in December. Arvydas Salda, director general of the FEZ's development center, said permission to start construction has already been received, and a land rent contract has been signed with the Klaipeda district. Penninox investments in Klaipeda FEZ might reach $32 million in the first stage and increase to $50 million in total. The plant could employ about 300 people.

EFFECTS OF RUSSIAN CRISIS FELT MORE IN OCTOBER: More Latvian companies shut down due to the Russian economic crisis in the second half of October. State Revenues Minister Aija Poca told reporters 41 companies had closed and 112 had partially halted operation by Nov. 1. In mid-October, only 27 firms shut their doors, and 96 stopped half of their conveyor lines. Poca said during the last two weeks of October terms of advanced profit tax payment were revised for 78 companies. The revised schedule of advanced tax payments will strip the state budget of 2.4 million lats ($4.1 million). The State Revenues Service also extended tax payment terms for 73 companies. Deferred tax payments at this point amounts to 4.2 million lats. Poca said the number of companies asking to alleviate tax payments was not increasing rapidly. She also noted the amount of deferred tax payments is decreasing. Poca did not rule out, however, that the crisis may have "a second wave." The State Revenue Service said the situation is worst for the fishing and textile industries.

ESTONIA PLANS TO FINISH PRIVATIZATION IN 1999: The Estonian Privatization Agency plans to round up privatization of state enterprises by the end of 1999. Roads and Communications Minister Raivo Vare, who is also EPA deputy chairman, said the agency adopted its action plan for the next year Nov. 18. The EPA's main task will be to finish privatization of infrastructure companies. The agency will also have to conclude the sale of the Liviko distillery. It's privatization has been delayed due to the lack of laws which regulate the sale of alcohol distilleries. Although the grand sale of Estonian state shares, which started in 1992, is scheduled to end next year, the EPA wants to stay in business by becoming a private company.

LITHUANIA, HUNGARY INK FREE TRADE TREATY: Lithuanian and Hungarian representatives signed a free-trade agreement which brought Lithuania closer to joining the Central European Free Trade Association (CEFTA). Lithuanian Economics Minister Vincas Babilius and his Hungarian counterpart Chikan Attila inked the free trade treaty Nov. 16. Lithuania has to sign free trade agreements with all six CEFTA members to join the organization. After penning the agreement with Hungary, Lithuania only has to finish negotiations with Romania to join. Lithuanian diplomats also regard the treaty as an important step toward expanding the Lithuanian export market in Hungary. Over the first half of this year, Lithuania's import from Hungary amounted to 23.4 million litas ($5.85 million), while exports totaled only 9.3 million litas.

GAZPROM WANTS TO MOVE TO SCANDINAVIA: Russian gas concern Gazprom intends to increase its exports to Sweden by constructing a 6,540 kilometer long pipeline under the Baltic Sea, the Russian newspaper Finansoviye Izvestiya reported. This plan does not call for connecting the Baltic states to the pipeline at an early stage of the project. Latvia's gas company Latvijas Gaze said it is interested in hooking up to the new gas pipeline system. Latvijas Gaze's spokesperson Karlis Anitens said it is premature to say that Russia will bypass Latvia because Gazprom's new pipeline is only a project that does not yet have definite participants. According to Finansoviye Izvestiya, Gazprom was concerned about losing a monopoly in gas supplies to the Baltics, but access to the Scandinavian market could partially compensate for the loss. The final decision about the project will be made by Sweden and Denmark who might prefer gas exports from Norway. If those countries do choose Russia, the $3.5 billion project might only start in 2008.

BEST INVESTMENT GUIDE: The Euromoney Books finance information publishers have issued a major study called "Investing in the Baltic States." Latvian Finance Minister Roberts Zile said the publication is the best survey prepared by foreign institutions on the Baltic states and investment opportunities there. It includes information about the economy, tax systems, political structure, history and culture of Latvia, Lithuania and Estonia.

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