In Brief - 2003-05-08

Retailer braces for stiff competition

In order to compete with the German retailer Lidl, which is about to enter the Estonian market, the Saastumarket chain of discount stores promises to increase the proportion of its own brands and make wholesale purchases for the entire Baltic chain in order to lower prices by 10 percent - 15 percent from current levels.

Speaking at a recent annual trade conference, Gunnar Kobin, CEO of Kesko Food's Estonian operations, said that Saastumarket, which is part of the Kesko concern, was not a hard discounter.

"The difference between a hard discounter [such as Lidl] and soft discounter is that the former's prices are 10 - 15 percent below the rest of the market. Saastumarket is today both in appearance and price level a discounter, but the difference with other supermarkets is not big enough for it to be called a hard discounter," Kobin explained.

In his words, Lidl is able to offer lower prices by selling goods purchased in Europe for the whole Lidl chain under its own trademarks.

Kobin said own brands made up some 70 percent - 80 percent of Lidl's range of goods, and Saastumarket's goal should be no different. The Estonian discounter at present sells a few of its own products, but by the end of the year their number should be "significant," he said. (BNS)

Handling plummets at Klaipeda

Klaipedos Nafta (Klaipeda Oil), the operator of the oil product terminal in the port of Klaipeda, handled a total of 2.35 million tons of oil products during the first four months of 2003, some 12.6 percent less than in the same period last year, the company said.

In April, the operator of the most technologically advanced oil product terminal in the Baltic countries handled 523,000 tons of oil products, down 38.3 percent on the same time last year. Compared with March of this year, the monthly oil product volume shrank 23.3 percent.

"In April, Mazeikiu Nafta reduced its oil product exports to 100,000 tons, compared with its usual monthly export volume of 300,000 to 400,000 tons. This is why oil product flows declined last month," Ramune Visockyte, a spokeswoman for Klaipedos Nafta, said. (BNS)

Ownership change at Osel Foods

Carl-Erik Sundblad, majority shareholder in the Estonian beverage maker Osel Foods, has signed an agreement to sell his stake to company executives and a minority shareholder.

CEO Kuldar Leis declined to disclose the division of shares among owners. "We have agreed that we won't publish the size of stakes, only the names of owners," he said.

Sundblad started talks over selling his stake to the management in March. The main reason for wanting to sell was reportedly a desire to withdraw from active business. If the agreement goes through, six members of the management will become new owners of the firm, Osel Foods stated.

Osel Foods ended last year with 162 million kroons (10.3 million euros) in audited sales turnover and a profit of 15.8 million kroons. In the first quarter of 2003 the firm posted sales of 46 million kroons and a profit of 5.6 million kroons.

Osel Foods is based in the eastern Tartumaa region. Its best-known trademarks are Aura, Aura ACE, Aura Spring, Gruuv and Milline Monus. (BNS)

Preses Nams moving shop

Latvia's Preses Nams publishing house is currently working on the development of a new printing plant for which investments are estimated at 5.5 million (8.5 million) - 8 million lats.

Preses Nams Board Chairman Andris Puzo said that the new printing facility was to be constructed outside central Riga, which means that costs will be minimized. The decision to build a new printing facility was made since the company concluded that its current printing facilities on Kipsala Island in central Riga do not make the best use of the real estate premises.

Three locations are currently being looked at and the project is still being developed. Construction may start in around a year's time.

Preses Nams' shareholders have channeled almost 2 million lats from last year's profits toward the new printing facility. Puzo said that last year Preses Nams earned 6.6 million lats from selling its multistory building on Kipsala. He added that he had no idea what the new owners planned to do with the building. (BNS)

Diary doubled sales last year

Valmieras Piens, one of Latvia's largest dairies, last year generated 15.2 million lats (23.6 million euros) in sales, up two times over 2001, although profits were down 16.4 percent to 268,000 lats, the company reported.

Didzis Sprincis, chief economist for the company, explained the jump in sales growth by the fact that Valmieras Piens took over Rujienas Pienotava, also a dairy, last year, as well as launched active cooperation with supermarkets.

The company last year exported products worth 1.6 million lats, including 100,000 lats' worth of products to the United States. The remainder was exported to Europe.

The company has set a sales target of 17 million lats and a profit target of 300,000 lats for 2003. The company also plans to raise its milk purchase volume by 15 percent. (BNS)