EU integration to boost Lithuanian GDP

  • 2003-01-30
Lithuania's integration into the European Union will boost the growth of gross domestic product and attract 23 billion litas (6.7 billion euros) in investment in 2002-2009, a Lithuanian think-tank said this week.

According to a report released by "Ekonomines Konsultacijos ir Tyrimai," over the eight-year period the Baltic country will receive some 15 billion litas in financial support from the EU, 4.5 billion will be contributed by the government, and the rest will come from private investors.

Total GDP growth due to EU membership in 2002-2009, according to the report, will reach 65.9 billion litas, while costs of EU integration, on the other hand, are estimated at 16 billion litas, said the report. (Agence France Presse)

Carrier to acquire Boeings

AirBaltic announced that it planned to modernize its fleet by leasing several Boeing 737 jets over the next two years.

Latvia's national air carrier said it wanted to roll over its current fleet of seven small planes – three Avro RJ 70s and four Fokkers – in favor of larger Boeing 737s that would seat up to 120 passengers. The company said it woiuld lease the jets - not buy - and that the first tender would be announced in February.

The company spokesman said that management hoped to replace its current fleet with Boeings by the end of 2004. The fleet modernization is part of the company's new three-pronged strategy that includes experimental pricing (cheap one-way tickets), new destinations (including Hamburg) and a modern fleet of jets. (The Baltic Times)

Timber exports up

Turnover at companies in Latvia's largest timber processing association - Latvijas Koks - amounted to 129.9 million lats (207.2 million euros) last year, up 4.9 percent on the previous year.

Andris Plezers, executive director of Latvijas Koks, which includes 28 processing companies, reported that exports last year made up 98.43 million lats of the total turnover, up 2.6 percent on the previous year.

The largest turnover among companies in the association was posted by Latvijas Finieris at 70.48 million lats, up 8.1 percent in comparison with 2001, including 56.88 million lats in exports.

Plezers said that 2002 results were as expected, with local demand growing faster than exports. The association reported that the amount of processed timber amounts equaled that of the previous year, but more attention was focused on value-added products. (BNS)

Dairy union against milk war

Latvia's dairy union is categorically against transforming Lithuania's milk dumping into a "milk war" between the two Baltic states.

"We support free and honest competition on the Baltic states milk market," said union board chairman Margers Rava. The dairy businesses union said that, to evaluate the situation and find an efficient solution, the Baltic states free trade agreement supervision committee should be involved.

Latvia's domestic market protection bureau found that Lithuanian milk is imported in Latvia at below-cost prices, therefore suggested the Latvian government to impose additional payment on imported Lithuanian milk. The final decision on the matter rests with the government.

The Lithuanian government reacted with sharp statements, warning that analogous penalties would be imposed on Latvia's goods. (BNS)

Klaipeda shipper might be sold

One potential investor has submitted a bid for 80.89 percent of shares in the Lithuanian shipping company Klaipedos Transporto Laivynas by the Jan. 23 deadline, the State Property Fund said.

The SPF declined to provide more details, saying only that the commission in charge of the KTL privatization process started analyzing the documents handed in by a company, which it did not name.

The initial selling price for the 80.89 percent stake in KTL is 48.6 million litas (14.1 million euros), or 0.46 litas per share. Market participants have said it is a good price and that the tender would attract more than one potential buyer.

This is the government's third attempt to sell the shipper. The second attempt to privatize KTL fell through in December because there were no bidders. The selling price then was 65 million litas, or 0.61 litas a share. (BNS)

State to drop out of pulp mill project

Latvia's government on Jan. 28 announced it inteded to sell its 33 percent stake in the Baltic Pulp Mill project, possibly removing the last hurdle holding up construction.

Deputy Prime Minister Ainars Slesers said the state would not sell its stake for less than 66,000 lats (105,000 euros), adding that expected investment in the project had convinced the Cabinet it would go ahead with sufficient financing.

Baltic Pulp was set up to build a major pulp mill outside Jekabpils, about 150 kilometers east of Riga. With share capital of 198,000 lats, it is 34 percent owned by Finland's Metsalitto and 33 percent owned by Sweden's Sodra Cell.

The project is expected to bring major investment and hundreds of jobs to the depressed Jekabpils region, and Finnish investors have said they are ready to invest nearly 1 million euros in the project. (BNS)