• 2001-11-01
SOURED CANNERY: The recovery of Latvia's insolvent milk cannery Rezekne PKK has been deemed impossible as its debts are too large and the company's creditors have decided to start bankruptcy proceedings. Aigars Belovs, the administrator of the insolvent milk cannery in Latvia's eastern city of Rezekne, reported that 743 creditors had filed claims against the cannery for a total of over 4.05 million lats ($6.53 million). Belovs said that among the creditors was Latvijas Unibanka bank with a secured credit of 2.4 million lats, while the others were non-secured creditors, most of whom were milk suppliers. To resume production at the cannery - once one of the largest suppliers of canned milk in the Soviet Union - some 1.5 million lats would be needed. Auditors said the cannery's accounts receivable equal zero as most of the debtors are Russian companies. Rezeknes PKK first announced its insolvency on July 23 and was delisted from the Riga Stock Exchange on July 30. The largest shareholders in Rezeknes PKK are a number of private investors.

COMPETING FOR INVESTMENT: According to PricewaterhouseCoopers, continued inflow of foreign investment will be the decisive factor in the further development of the Baltic economies. The consultancy's chief analyst, Hardo Pajula, wrote in a review released on Oct. 29 that in the short term the Baltic economies are not very vulnerable, but in the long term their fortunes would inevitably be connected to the world situation. "The decisive factor will be competition for the shrinking volumes of foreign direct investment needed by all these economies," Pajula said. If domestic economic policies were geared to winning that investment, the chances of the worst scenarios coming true would be reduced. In fact a cooling of the world economy, increased transaction costs and shrinking demand might compel companies to transfer their production to Central and Eastern Europe where costs are lower, he said. "In this respect, Estonia with its increasingly strong links to the Finnish and Scandinavian markets is perhaps the best situated among the Baltic economies," he said.

SPRAT DEFENSE: The five Latvian fish canneries which together comprise the public organization Rigas Sprotes (Riga Sprats) plan to go to court to protect their exclusive canned fish brand against an increasing number of fake products, reported the Riga-based Russian-language business daily Bizness & Baltija. The canneries, Brivais Vilnis, Salacgriva'95, Juraslicis, Unda and Selga, registered their right to exclusive use of the Rigas Sprotes Ella (Riga Sprats in Oil) brand name in 1996, but a recent increase in unauthorized copies has prompted them to take action. Riga Sprotes intends to take to court companies which illegally use the registered brand both in the Latvian market and in neighboring countries. The organization has already submitted documentation backing its complaint to the customs department and the competition council. The number of companies taking illegal advantage of the popular brand name was not disclosed, although it was acknowledged that one Estonian company was among them. The five members of the Riga Sprotes organization produce tens of millions of cans of sprats annually, mostly for export. Their combined output in 2001 is expected to be over 40 million cans.

MEAT GOES EU: Three Lithuanian meat processors have been allowed to export their products to the European Union, the country's State Food and Veterinary Service said. The European Union's Standing Veterinary Committee issued the relevant permits to the Vilke, Skinija and Mazeikiu Mesinethree companies in Brussels on Oct. 24. What will be the first exports of Lithuanian meat to the European Union can commence four weeks after the decision is announced in the European Union's official bulletin. The processors filed their export permit applications in October, 2000 after they had been inspected by EU veterinary experts. Not a single meat processing company in Lithuania, Latvia or Estonia has been given such a permit before.

BIDDERS WANTED: A foreign company and two local firms are the first so far to have expressed willingness to participate in restructuring the bankrupt Lithuanian fuel retailer Lietuvos Kuras, the daily newspaper Lietuvos Rytas reported on Oct. 25. Bowfield, a company registered in the Bahamas, and the Lithuanian firms Eurovista and Baltic Petroleum want to restructure the fuel retailer which was sold to the Dutch company Kopcke International Holdings a couple of years ago. Baltic Petroleum, which has actually operated Lietuvos Kuras since its privatization, initiated bankruptcy proceedings against the ailing fuel retailer last spring. Nov. 12 is the deadline for any other potential participants to submit their bids. At least two-thirds of creditors' votes and a court decision are necessary for the restructuring to get underway. Turto Bankas is the main creditor of Lietuvos Kuras. Steponas Jurna, head of Turto Bankas, was quoted as saying that the bank would decide whether to give the go-ahead for the restructuring after the bidders had submitted their offers.

FOR WATER: The European Commission this week allotted 15.96 million euros ($14.5 million) under the ISPA program for the construction of biological water purification facilities at a water purification company in the second largest Lithuanian city, Kaunas and for the development of sewage treatment networks on the outskirts of Kaunas. Vilius Burokas, managing director of Kauno Vandenys, owner of the water purification company, said a tender for a contractor was currently being prepared. The tender will be organized by the Swedish consultancy company VA Project, funded by the Swedish government. The Lithuanian government will earmark some 6.38 million euros for the project. This past summer, the European Bank for Reconstruction and Development granted a soft loan of 9.57 million euros. "The tender documents will be prepared in mid-2002, and construction will start in the second half of 2002," Burokas said. The biological water purification facility will be put into operation in 2005. The Kaunas-based company has managed to reduce the pollution of the Nemunas River by 70 percent by installing mechanical and chemical water purification facilities in 1999. Biological water purification facilities could help reduce pollution in the stretch of the Nemunas from Kaunas to the Curonian Lagoon by 95 percent, enabling the river to comply with EU norms on pollution levels.