RIGA - Two Danish-owned candle manufacturers have reportedly reached an agreement over the division of the Latvian market, according to which one of the companies, both now located in Dobele, will move to Ventspils.
The older of the two companies, Baltijas Sveces, owns 99 percent of the Dobele candle factory, in which it began investing eight years ago by buying a 40 percent stake.
The other, Diana Sveces, a subsidiary of the largest producer of candles in Denmark, then bought a controlling stake in the Dobele factory, a move that was contested in court by Baltijas Sveces. The latter eventually won and bought out Diana Sveces' stake.
Now Diana Sveces has decided to set up a candle manufacturing plant on the territory of the Ventspils Free Port. The new plant will require 500,000 lats (746,000 euros) and could begin cranking out candles in May.
Lars Olesen, who owns Diana Sveces, told Dienas Bizness that 90 percent of the new factory's candles would be exported to Scandinavia and Western Europe, with the rest sold in the Baltics. Raw material will come from CIS countries and Europe, he added.
The new plant will begin producing value-added products - hand-made decorative candles - for Scandinavia and the EU.
Olesen did not exclude the possibility that if the Ventspils operation succeeds, Diana Sveces could shift part of its Danish production to the Latvian port town.
Baltijas Sveces employs about 600 people at its Dobele plant. Its main market is the EU, though part of its output is exported to Australia, the U.S.A. and Canada. CEO Jens Thogersen said that turnover in 2003 increased by 60 percent.
Diana Sveces plans to employ about 120 people in Ventspils.
