YET ANOTHER NEW BANK: Latvia's Central Bank approved a license establishing the country's 23rd bank, the Regional Investment Bank, on Sept. 14. One of the main long-term targets for the newly established bank is to create a platform on which a large investment bank may enter Latvia, reported the new bank's president, Haralds Abolins. RIB plans to be customer-oriented - offering precise, fast, high-quality service, fund and asset management, as well as securities and leasing operations. "This sector of Latvia's financial market is seen by the bank's management as insufficient. Filling this niche will ensure successful banking operations and the necessary services for customers," reported the bank. Initially, RIB does not plan to accept individuals as customers and will not issue credit cards. Most attention will be to medium-sized and large customers. The largest share holder, with a 94 percent stake in RIB is Bastions ZS, which founded Balta insurance group, later selling its shares in what is now the largest insurance group in Latvia to Denmark's Codan. Bastion ZS probably earned around 6 million lats ($9.63 million) from the deal, according to Baltic News Service estimates.
WAY DOWN SOUTH: Latvia's largest retailer of household-goods, Drogas, is set to open its first store abroad this November in Vilnius, Lithuania. A specific opening date has yet to be set, reported the company. In a press release it said Drogas is the first company of Latvian origin to extend a chain of stores outside Latvia. It added that Drogas had plans beyond Lithuania, but did not go into further detail. The store in Vilnius will operate along the same lines as Drogas stores in Latvia, selling all kinds of household goods from detergents to cosmetics. Drogas owns more than 30 stores in Latvia, most of them in the capital, Riga. Last year, Drogas made a profit of 46,200 lats ($ 74,150) on a turnover of 10.7 million lats. The company closed 1999 with a loss of 124,900 lats on a turnover of 7.3 million lats.
NEW PLANT CREATES JOBS: The fiberglass factory Valmieras Stikla Skiedra in Valmiera, northeastern Latvia, has completed work on a new single-stage fiberglass plant, the company reported last week. The new plant is expected to be officially opened on Oct. 10. Germany's Glasseiden GmbH Oschatz, the Valmiera company's strategic investor, has so far invested 25 million Deutsche marks ($11.79 million) in the single-stage plant, while Valmieras Stikla Skiedra itself has invested over 1.2 million lats ($1.93 million). The company will use world class technology, said the company in a statement. The new plant will create 83 new jobs in Valmiera. The single-stage process produces glass fibers after melting glass only once, whereas twin-stage fiberglass production involves melting glass into beads which are then remelted to produce glass fibers. The factory will also continue to use its twin-stage plants. Valmieras Stikla Skiedra stock is listed on the Riga Stock Exchange. The company's net profit in the first eight months of 2001 was 276,300 lats ($445,650) on a turnover of 10.66 million lats.
COMPANIES TO REPAY DEBT: The Lithuanian government will be responsible for approving the two buyers of debt incurred by Belarus for energy which Lithuania supplied it in the years 1998-1999, the government decided on Sept. 12. Announcing the decision the government cited changes in the law on restructuring the Lithuanian national power utility Lietuvos Energija. Previously, Parliament was to be responsible for the decision. The Russian company Vangvard and local firm Dzeirana have agreed to immediately repay just over half of the debt owed by Belarus' state utility Belenergo. If the government gives the go-ahead the two firms are expected to make the repayment within a month. Belarus' debt for Lithuanian electricity supplies currently totals around $48 million. Last spring, the government approved Vangvard as the sole buyer of the debt. The company then offered to repay the whole debt in installments over 10 years but the Lithuanian State Audit Office opposed the deal, saying it would undermine the interests of the state.
LESS SPENT ON FOOD, MORE ON FUN: An average Estonian family spends 26 percent of its income on food, 16 percent less than in 1992, a survey by the Emor market research firm revealed last week. The finding is an indicator of "remarkable" development, said Emor project leader Kaidi Kandla speaking at the Estonian Economy 2002 conference on Sept. 14. An average household spends 42 percent of its money on non-food articles and services, 17 percent on housing, 11 percent on taxes and 4 percent on alcohol and tobacco. The increase in expenditure on housing has been a steady trend, Kandla said. In 1992, annual total consumption per capita was 3,708 kroons ($212), but by 2001 it had risen to 30,876 kroons. Overall growth has been nearly tenfold though some of it was due to inflation, Kandla said.