Lithuania's Snaige, a blue chip stock and one of the Baltic states' leading manufacturers, announced that it was going ahead with its expansion plans and invest millions of dollars in developing a manufacturing base in Russia.
The company announced last week that it would acquire an 85 percent stake in Russia's Techprominvest and invest some 40 million litas (11.6 million euros) in refrigerator production in Russia's Kaliningrad region.
Romualdas Raudonis, managing director of Snaige, said the management board's decision to acquire the controlling interest in Techprominvest would help it launch refrigerator assembly in the lucrative Russian market.
In early February of this year, Snaige announced that it hoped to win a 10 percent - 20 percent market share in the country of some 145 million consumers.
The company's exports to Russia have traditionally been very small due to high import duties.
As Raudonis explained, Techprominvest will set the company's investment project in motion, and Snaige will even extend a loan to the company to give it an injection of badly needed working capital.
Raudonis also said the company would start reconstruction of Techprominvest's premises this year, while the launch of refrigerator production under the trade mark "Snaige in Russia" is scheduled for the first half of 2004.
In autumn of last year, Snaige acquired the bankrupt Slovakian refrigerator plant Novy Calex, where the Lithuanian corporation plans to launch the production of refrigerator parts.
And in Kaliningrad, where trade and industry enjoy a special tax domain (firms pay less value-added tax than in Russia's other regions due to the fact the region is an exclave cut off from the rest of Russia), Snaige will be able to "export" its refrigerators to Russia at a competitive price.
Based in Alytus, in southern Lithuania, Snaige is projecting a pretax profit of 27.9 million litas on sales of 268.2 million litas for 2003, a 26.5 percent rise year-on-year.
Snaige reported sales of 250.6 million litas for 2002, a 26.5 percent increase over 2001, while earnings reached 22.9 million litas.