In Brief - 2003-04-03

Gazprom signs Kaunas energy deal

A consortium led by Russia's Gazprom signed on April 1 a purchase agreement for 100 percent of Kaunas Thermal Power Plant.

According to the agreement, the investors will pay 116.5 million litas (33.2 million euros), of which 90 million litas will be paid immediately and the remaining sum by the end of the year. The investor will be obliged to invest no less than 400 million litas into the plant's modernization and to keep tariffs stable for the next five years.

Also, there are plans that the consortium will eventually divvy up its shares among its members in proportion to their investment, which would leave Gazprom with 51 percent, Dujotekana (in which Gazprom owns a controlling stake) - 24 percent and U.S.-based Clement Power Venture - 25 percent.

Kaunas Thermal Power Plant produces about 80 percent of the city of Kaunas' heating needs. (Baltic News Service)

VP Market marches into Poland

Lithuania's VP Market, operator of one of the largest retail chains in the Baltic states, intends to set up shop in neighboring Poland.

The retailer said it was set to open up to 1,000 T-Market stores and win a market share from 5 percent to 7 percent in Poland over the next few years. Although the amount of investments has not been disclosed, "We have taken a fairly large share on the domestic market and will slow down expansion, but this makes us look for new markets," said Jolanta Bivainyte, head of administration of the Vilniaus Prekyba Group, which owns VP Market.

VP Market now operates 217 supermarkets in the Baltic states, of which 166 are in Lithuania, 50 in Latvia and one in Estonia. In January-February of this year, VP Market posted a Baltic-wide turnover of 149.2 million euros, up by 24.8 percent from a year ago. The group is anticipating a turnover of 1 billion euros for 2003. (BNS)

Air carriers to advertise full price

Air companies advertising their flights in Latvia will have to indicate full ticket price with airport tax included as of May 1, Latvia's consumer watchdog said.

Mara Jegere, deputy director of the Consumer Rights Protection Center, said an agreement on price advertising was reached in talks with representatives of air companies operating in Latvia. Stressing that consumers should be able to see "the true price at first sight instead of having to look for it somewhere at the bottom of the ad in small print," she said consumers needed the full price of flights and that, if the price mentioned in the ad differed from the actual price by up to 50 lats (80 euros), consumers were not given a true impression about the price.

The center will also send official letters to air companies stating they have to correct all their ads by May 1, said Jegere. (BNS)

Kaunas to buy 30 Czech trolleys

The Municipal Council of Kaunas decided on March 27 to purchase 30 new trolley buses from the Czech company Skoda Export.

Gintautas Cinikas, managing director of the city-owned company Autrolis, said an agreement, subject to approval by the Kaunas Municipal Council, with the supplier was to be prepared by late August. "New trolley buses should be delivered to Kaunas at the end of this year," Cinikas said.

The city will buy trolley buses for about 1 million litas (285,000 euros) per vehicle under a 7-year lease agreement. The decision to upgrade the city's ageing bus fleet was made in the summer of 2002. At present, Kaunas has a fleet of 163 trolley buses, of which 50 percent are older than 14 years (exploitation age is 10 years). (BNS)

Drogas continues its expansion

Drogas, Latvia's largest chain of retail outlets selling cosmetics, toiletries and housewares, opened its second store in the Lithuanian port city of Klaipeda last week, bringing the total number of stores in Lithuania to 14.

The company said in a statement it expected to double its Lithuanian chain by the end of the year - to between 23 and 26 stores. At present, Drogas has outlets in Vilnius, Kaunas, Klaipeda, Panevezys and Siauliai. "Our aim is to establish our presence in all major Lithuanian cities and towns," said Maria Sukhonosova, head of Drogas' marketing and promotion unit.

Drogas entered the Lithuanian market in December 2001. The company posted revenues of over 8 million litas (2.3 million euros) in 2002, which it hopes to increase to 30 million litas this year. (BNS)

Ericsson partners with ADM

Ericsson has concluded a partnership agreement with the ADM Group, giving the IT group the status of associated partner in the international mobile Internet network Ericsson Mobility World.

Joining the partnership program gives the ADM Group, an Estonian-based concern of information technology firms whose principal field of operation is development of Web and independent m-solutions, access to Ericsson's sales channels, know-how, advance product information and solutions testing centers. Meelis Malk, manager of the ADM Group, said the cooperation agreement gives the firm an excellent opportunity to test its solutions in the unique testing centers of Ericsson Mobility World. "In addition to a unique sales channel, testing new solutions in different technical conditions, for which there usually are no opportunities, is important for us," he said. (BNS)