Company briefs - 2004-02-05

The Lithuanian government approved a proposal to sell the remaining state-held shares in the ELTA news agency.

At the price of the official buyout offer made last year by MG Baltic, which owns 50.86 percent of the agency, the value of the state-owned stake would be 2.9 million litas (840,000 euros). Under a law adopted in 1996, the state had to retain no less than 35 percent of shares in news agencies, though the State Audit Office recommended that this provision be removed last year. The law also imposed a six-year ban on selling the shares acquired from the state, and MG Baltic took control of ELTA after the ban ended in late 2002.

The Cesis meat processing plant Ruks and the Lankalni farm were the first in Latvia to have received licenses to export raw meat to the EU, which they will begin in the second half of February. The owner of Lankalni, Jauris Jaunzems, said that the first meat shipment would be sent to Sweden. In order to receive the licenses, Ruks invested some 2.5 million lats (3.7 million euros) in building new production units, while Lankalni invested about 1 million lats in a new slaughterhouse. Both submitted documentation for licenses in November of last year.

Russia's energy monopoly United Energy Systems will take part in a new tender on the privatization of Rytu Skirstomieji Tinklai, the power grid operator of eastern Lithuania. Yakov Urinson, UES deputy chairman, said that the company had failed to meet qualification requirements for the previous tender since the Lithuanian government made them in such a way that Russian companies were forbidden from taking part. The RST privatization was suspended after a bid from Eesti Energia, Estonia's state-run power utility and the sole bidder, was rejected.

The former Soviet military airport in Zokniai, near Siauliai, has seen revenues drop since the start of the year when a ban on servicing planes whose noise levels exceed EU norms- i.e. those manufactured in Russia - went into effect. Airport director Jonas Jutkelis said that air carriers would inevitably respond by phasing in modern planes and that the Zokniai airport enjoys certain competitive advantages as it is the only Lithuanian airport able to service heavyweight Boeing 747s.

Latvijas Krajbanka filed a 2.7 million lat (4 million euro) lawsuit for termination of a loan agreement made with Skonto AL, which reportedly used the loan for building the Rolands Hotel in Riga's Old Town. The bank claims that Skonto AL defaulted on repayments and has built up significant debt.

The Riga-based shipyard Rigas Kugu Buvetava will soon begin building its first military vessel for a foreign client. The company has not disclosed the identity of the customer but said that the vessel will be 30 meters long and is designed for coastal guard operations. Last year RKB finished building its first tanker - a 78 meter-long double-hull tanker for a Scandinavian country.

Fazer Maiznica Druva, the second largest bread maker in Latvia, has completed the 3 million lat (4.5 million euro) reconstruction of its production facility in Ogre, 40 kilometers outside Riga. The renovated facility will allow the bakery to boost capacity and drive down production costs. Fazer Maiznica Druva CEO said that the company saw its market share expand from 5 percent to 9 percent last year, while in the supermarkets its white bread share was 35 percent.

The parent company of Estonia's Kreenholm textile factory, Sweden's Boras Wafveri, said it intended to shut down a spinning and weaving mill that currently employs 70 workers in Sweden and to shift production to Narva. "We have a large factory in Narva, and Kreenholm has at present free production capacities," Boras Wafveri's managing director Mats Skogman said. "And the transfer of production is possible without large investments. I'm talking about very small sums here." However, the transfer of operations to the Baltics will not reduce the number of expected cutbacks expected at Kreenholm's production facility in Narva. "The number of redundancies will not decline correspondingly," Kreenholm's CFO Mai Palginomm said.