2013 summer news from lt


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2013 summer news from lt

  1. 1. 1 The information is prepared by Nijole Kelpsaite, Managing Partner of UAB J.Friisberg & Partners. UAB J.Friisberg & Partners is a partner office of J.Friisberg & Partners International - a Partner-owned International Management Consulting Firm specializing in Executive Search, search and selection of high demand professionals, and providing management audit services. UAB J.Friisberg & Partners successfully operates in Lithuanian market already 19 years. 16 September, 2013 Vilnius 2013 SUMMER NEWS LITHUANIA OECD: Lithuania meets top international tax transparency standards August 01. The OECD Global Forum has confirmed that Lithuania meets top transparency standards for exchange of tax information. Lithuania’s peer review report stated that „overall, Lithuania has a legal and regulatory framework in place that generally supports the availability, access and exchange of all relevant information for tax purposes in accordance with the international standard.“ The peer review included the assessment of Lithuania’s legal and taxation systems, access to ownership information of all companies, accounting and bank information as well as protection of taxpayers’ data. The OECD Global Forum on Transparency and Exchange of Information for Tax Purposes, which now has 120 members, was created back in 2002. Lithuania joined the Forum as a member last year. Foreign Policy magazine: Lithuania is the No 16 FDI location worldwide Lithuania is the second most attractive country for foreign investors in Europe and 16th in the world, according to the latest Baseline Profitability Index (BPI), where Lithuania scored 1.09 points. BPI, compiled by Foreign Policy magazine, takes account of how much an asset's value grows, the preservation of that value while the asset is owned, and the ease of bringing home the proceeds from selling the asset. Lithuania shows better results than China, USA, Ireland, Sweden and the UK. Foreign Policy rated Hong Kong, Botswana, Taiwan, Singapore and Rwanda as the most attractive countries for foreign investors. Ernst & Young: Lithuania is the top FDI location in the Baltic States At the same time Lithuania ranks as the most attractive of the three Baltic States for FDI according to the Ernst & Young. The consultancy’s annual Europe Investment Attractiveness Survey takes into account the number of jobs created through foreign investment and the total number foreign investment projects. Foreign investors created 2,450 jobs in the Baltic countries last year, 1,717 of them in Lithuania – 15% increase from 2011. The country realised 27 projects, creating 63 jobs on average. Latvia’s 7 FDI projects resulted in 41 jobs on average, while Estonia’s 25 investments created an average of 17 jobs each. Investments from Denmark and the United States created the most Lithuanian jobs. Almost one-third of the Lithuanian jobs created through FDI were in the financial intermediation services sector and high value-added manufacturing. Over the past year, more than 630 jobs were developed through investments in scientific instrument manufacturing, software, and pharmaceutical sectors.
  2. 2. 2 ECONOMY Lithuania’s GDP grows 4.2% in H1 y/y Lithuania’s gross domestic product (GDP), adjusted for seasonal and calendar effects, grew by 4.2 % in the first half of this year from a year ago to €16.2bn at current prices, according to a flash estimate released by the country’s statistics office. In the second quarter alone, adjusted GDP increased by an annual 4.1 % to €8.57bn. Lithuania’s retail sales rise 4.1% in H1 y/y Lithuania’s retail sales, not including car sales and repairs and food and beverage service providers, rose by 4.1 % in the first half of this year from a year ago to €3.92bn, not including VAT, according to the country’s statistics office. Car and motorcycle wholesalers and retailers and repair service providers saw their combined sales grow by an annual 14.1 % to €1.21bn in January through June. Food and beverage service providers’ sales increased by 1.7 % year-on-year, to €192m. Lithuania‘s exports grows 14,7% in H1 y/y Lithuania‘s exports rose by 14,7% and imports increased by 10,4% in the first half of this year from a year ago, according to the country‘s statistics office. The main export partners during this period were Russia (19,4%), Latvia (9,5%), Germany (7,8%) and Estonia (7,6%). Import partners – Russia (31,4%), Germany (9,8%), Poland (9,4%) and Latvia (5,8%). Lithuania‘s unemployment rate is down to 11,7% in Q2 Lithuania‘s unemployment is down to 11,7% in Q2 and is 1,4 pct lower compared to the Q1 of 2013 according to the country‘s statistics office. Accordingly, the rate of long term unemployment amounted to 4,9 pct and was by 1 pct lower compared to Q1. CORPORATE NEWS SEB Shared Service Centre: 140 new hires are expected by the end of 2013 The SEB Shared Service Centre in Vilnius has recruited as many as 80 new employees this year, and a further 60 specialists will be joining by the end of 2013. New hires are working in fields such as IT development, financial operations, and credit administration. The Centre, which was established in Vilnius in 2008, provides business support services (operations, IT, HR, and finance) to subsidiaries and units of the SEB Group in 20 countries. It is expected to have 450 employees by the end of 2012. The Centre is planning further expansion: an establishment of new IT development unit and increase in scope of financial operations and loan administration are underway. Greencarrier Group opens Financial Service Center in Klaipėda June 18, 2013. Greencarrier Group, one of the Nordic region’s largest transport solutions companies specializing in global transport solutions, is expanding its operations in Lithuania by establishing a Financial Service Center to provide the Group with financial and accounting services. The Financial Service Center will open this year, starting with 5 employees. In 2014 further expansion is expected. In Lithuania Greencarrier group already has 2 companies – an international freight forwarding unit and a liner agency serving Lithuanian, Belorussian and Russian markets.
  3. 3. 3 VIRTUSTREAM announces the development of new Cloud Computing Service Centre in Kaunas July 8. VIRTUSTREAM, USA enterprise-class cloud management software and infrastructure-as-a-service (IaaS) provider, is planning to open a new service development affiliate in Kaunas. It is anticipated to employ 75 IT specialists to develop future releases of xStreamTM , VIRTUSTREAM’s secure, high availability, enterprise-class hybrid cloud solution for VIRTUSTREAM’s clients worldwide. According to the company spokesperson, VIRTUSTREAM was drawn to Kaunas because of its strong reputation in the high tech and computer science fields, and the opportunity to cooperate with Kaunas University of Technology (KTU). VIRTUSTREAM, together with KTU, is planning to develop a new cloud computing syllabus and is partnering with the University through an endowment of over €87.000 for joint research facilities. Lidl will open distribution center in near Kaunas July 02, 2013. German low-price food retailer Lidl plans to build its distribution center near Kaunas, the second largest city of Lithuania. The 12 hectare plot is at the junction of the key motorways that connect the South- North and East-West of the country and beyond. Currently Lidl is in the process of finalizing its business arrangements - a handful of locations have already been identified for future stores. The company intends to open several stores simultaneously with the opening of the logistics center. The first IKEA store in the Baltic States opens in Vilnius World’s leading furniture maker IKEA opened its first store in the Baltic States in Vilnius. The shopping area of IKEA store amounts to 26,500 m2 and assortment of products reaches 8,000 items. It is estimated that the establishment of the IKEA store has already created about 250 new jobs in Lithuania. The store will sell everything relating to home furnishings, from small interior design objects, tableware and appliances to kitchen cabinets and other furniture. The products are delivered to Vilnius store from the IKEA warehouses in Poland. Lithuania is the 5th most important supplier for IKEA Group after China, Poland, Italy and Sweden. Around 5% of IKEA products are produced in Lithuania. H&M opens its first store in Lithuania August 24. World‘s leading fashion retailer H&M (H&M Hennes & Mauritz) has opened its first store in Vilnius, which is also the biggest H&M store in the Baltic States. With the shopping area of around 3,500 m2 spread out in 2 floors, the store carries a various range of fashion for women, men, teenagers, kids and home. According to H&M’s representatives, the expansion in Lithuania continues as the next H&M store will open in Klaipėda on 21st of September. It is also announced that next year H&M stores will open the doors in 3 shopping centers in Vilnius and one in Šiauliai. Adidas Group expands in Vilnius August 22. Adidas Group, a global leader in the sporting goods industry, expands its activity by opening new franchise store in Vilnius. It will be the biggest Adidas store in the Baltic States, offering over 2000 items of Adidas and Reebok iconic footwear, apparel and accessories.
  4. 4. 4 The total shopping area amounts to 350 m2, out of which 64 m2 are allocated for Reebok and the rest for Adidas brand. The new store is equipped with virtual fitting room and foot scanner that enables to select the optimal footwear for each individual customer. In total Adidas Group has 5 stores in Lithuania. Norwegian Jotron opened new factory in Kaunas August 26. Norwegian Jotron, a producer of modern communication equipment for airports and naval companies, is expanding its operations in Lithuania. By the end of 2013, Jotron will open new factory in Kaunas, and will recruit 35 specialists. The projected investments will amount to around €2.7m. Jotron expects to increase its production volume – instead of manufacturing separate parts of certain products, now it will manufacture complete and technologically advanced products. Also it will establish local product development unit. The Kaunas plant, which has been in operation since 2001, employs 80 specialists. Kinze Manufacturing opens a production plant in Lithuania Kinze Manufacturing Inc., one of the world’s biggest manufacturers of seeding and planting equipment, is opening a production plant in Lithuania. This will be the company’s first manufacturing plant outside of the USA. Kinze Manufacturing plans to invest €6,4m and employ 250 people. Production lines for four different types of seeding and planting equipment will be established in the new factory, and the first batch is scheduled for completion in October this year. The factory is expected to meet the growing demand for Kinze Manufacturing production in Russia, Ukraine, Hungary, Bulgaria, Czech Republic and Slovakia. Klaipeda free economic zone attracts the Russia’s largest plumbing parts manufacturer July 18. Ani Plast, the largest Russian plastic plumbing manufacturer by sales volume, is opening a new factory Klaipeda free economic zone (FEZ). Ani Plast plans to invest almost €9m and employ 60 people. It is planned to export 100% of the output, and export geography is expected to reach 14 countries. According to the representative of Ani Plast, the need to establish a new factory in the European Union became clear when the company decided to export production to wider range of foreign markets. Just recently Klaipeda did not have any companies working in the plastic sector. Now, including the investment of Ani Plast, 500 people will be working in this sector at Klaipeda FEZ alone, generating yearly revenues of €684m. EXECUTIVE APPOINTMENTS Strömberg appointed as President of Omnitel June 14. Dan Strömberg, a Swedish national, has taken over from Antanas Zabulis as president of Lithuania's mobile service provider Omnitel, owned by the Scandinavian TeliaSonera. According to the press release, Stromberg, who has been with TeliaSonera for more than 20 years, has good experience in achieving results in difficult market conditions. As the CEO of TeliaSonera's fixed-line communications company in Denmark in 2009 - 2012, he turned the loss-making company into a profitable one. In response to the challenging transition period in Lithuania's mobile communications market Omnitel is planning to introduce a new business model that will increase data transmission and slow down the decline in voice services. It will also focus on meeting users' needs for mobile Internet.
  5. 5. 5 Šliužas appointed as General Manager of TEO LT August 12. Kęstutis Šliužas, a Lithuanian national, has been appointed as General Manager of TEO LT, the largest provider of integrated telecommunication, IT and TV services in Lithuania (TeliaSonera group). Šliužas succeeded Arūnas Šikšta, who led TEO LT until February 2013. Šliužas, who is 41 years old, will lead TEO Group from the 1st of November. Starting from January 2011 K.Šliužas was Managing Director of Tetra Pak Ukraine. He has made his career in Tetra Pak, a Swedish company, while working in Lithuania, Italy and Russia since 1996, where he was responsible for product development, marketing management, sales and leading other departments. Recently he has also been leading the Tetra Pak Sales and Marketing functions in the Eastern Europe and Central Asia region. He holds Bachelor's and Master's degrees from the Vilnius University. Later he studied at the Swiss business school IMD and London Business School. Dahl appointed as Country Managing Director of Rimi Lietuva August 29. Pehr Robert Allan Dahl, a Swedish national, has been appointed as Country Managing Director of Rimi Lietuva, the operator of a leading Lithuania’s grocery chain. Dahl succeeded Christian Wijkstrom who worked as Country Managing director of the chain until May 2013. New CEO of Rimi Lietuva has 7 years of experience working for ICA, which owns Rimi Lietuva. Until now he was in charge of 700 ICA Narra stores in Sweden. Before ICA, Per Dahl had over 9 years of experience in management consultancy in London, Stockholm and Singapore. Misiūnas switches seats in the national electricity group July 23. AB Dalius Misiunas, CEO of Lithuania’s state-owned electricity group Lietuvos Energija (Lithuanian Energy), steps down as CEO of Lietuvos Energija and is appointed as Chairman and CEO of Visagino Atominė Elektrinė (Visagino Nuclear Plant). The change in Misiunas position took place due to the on-going corporate governance reorganization that will ensure more effective work of the electricity group. TRANSPORT INFRASTRUCTURE Port of Klaipeda reaches new investment record in H1 July 26. The port of Klaipeda set a new historic investment record by investing €67.7m in the H1 of 2013. According to the port’s authority, the previous record – €48m – was recorded in 12 months of 2008. According to Ernst & Young, based on the 2011 reloading performance, a total of €119m had been poured into the state budget through various taxes as a result of increase in handling volumes driven by the port’s infrastructure development. The port plans to invest a total of €95m this year. Port of Klaipeda outrivals Ryga for NATO cargo August 12. After 2 years of intensive preparations Klaipeda port takes over all NATO cargo, previously sent to Afganistan via Ryga sea port and airports. The contract signed by VPA Logistics, one of the biggest country‘s logistics company, ensures NATO food and other cargo to be transported to Afganistan via Klaipėda port. The first shipment will reach the port at the beginning of September. In total NATO cargo will amount to 6% of all containers shipped via Klaipeda port.
  6. 6. 6 The comprise is reached on Rail Baltica joint venture July 26. Lithuania and the European Commission have agreed on the principles of setting up a joint venture for carrying out the European-gauge railway project Rail Baltica. A compromise allows Lithuania to keep all of its infrastructure. According to the Ministry of Transport Lithuania is withdrawing the proposal to establish a European Economic Interest Grouping and agree to the joint venture being headquartered in Riga, but, at the same time, Lithuania wants Rail Baltica to link together both all three Baltic capitals and ports. That means that both Vilnius and Klaipeda would be on the Rail Baltica route. The agreement to establish joint venture is expected to be signed in September. Lithuania, Latvia and Estonia will become shareholders of the joint venture with the opportunity for Poland and Finland to join later on. Government approves the merger of Lithuania's 3 international airports July 24. The Lithuanian government gave the green light for the reorganization of the airports of Palanga and Kaunas by merging them into Vilnius Airport by the summer of next year. The estimated annual economic effect of the merger is approx of €348,000. The need for combining the airports into one has been on the agenda for several years. The airports will not be renamed. SAS doubles the frequency of its Vilnius – Stockholm route Starting from mid August, Scandinavian airline SAS is doubling the frequency of flights between Vilnius and Stockholm. Now the airline provides 12 direct flights per week: 2 flights per day on weekdays, and 1 flight per day on weekends. By adding the frequency SAS seeks to satisfy growing demand of its business customers. According to the Lithuanian Department of Statistics, Sweden was the main foreign investor in Lithuania, accounting for more than one fifth of total FDI in 2012. ENERGY Corporate governance reorganization will increase the performance of the energy companies July 16. The Ministry of Finance has initiated corporate governance reorganization of the national group of energy companies, which it controls via trust law, on the basis of best international practice. According to a decision made by the Ministry of Finance, the sole shareholder of and government representative at UAB Visagino Atominė Elektrinė (VAE), the company's statutes were changed and a seven member Supervisory Board was elected for a four year term. According to Minister of Finance Rimantas Šadžius, election of a Supervisory Board is an important step towards clarifying the responsibilities held by the executives and supervisors of the group. Incorporation of independent members guarantees more transparency and increases public's trust in the actions undertaken by the group. By October 2013, UAB Visagino Atominė Elektrinė will be renamed UAB Lietuvos Energija and will become the parent company responsible for all of the group's corporate governance functions (finance, law, strategy, HR, audit, risk management, technology and other areas) (. Lietuvos Energija, AB will be renamed to AB Lietuvos Energijos Gamyba. At some point in the future of the reorganization of the energy company group, the Visaginas Nuclear Power Plant project will be transferred to the subsidiary company UAB VAE SPB. Former VAE corporate group CEO Rimantas Vaitkus will continue working on the Visaginas Nuclear Power Plant project.
  7. 7. 7 Supervisory Boards with independent members and shareholder representatives will also be formed at listed group members companies AB LESTO and Lietuvos Energijos Gamyba, AB. Supervisory boards for non listed companies will not be elected. The companies will be led by Management boards formed from the companies' management. Starting from November, the reorganization will be followed by long-term strategic and systemic changes intended to increase the corporate group's efficiency and effectiveness. The following companies belong to the reorganized Visagino Atominė Elektrinė company group: the electricity generation, distribution and service companies UAB VAE SPB and AB Lietuvos Energija (which unites the Elektrėnų thermal power plant, the Kruonis pumped-storage power plant and the Kaunas hydroelectric power plant), AB LESTO, and these companies' subsidiary companies (the Technology and Innovation Center, NT Valdos, Energijos Tiekimas, Elektros Tinklo Paslaugos, the National Energy Teaching Center and Kauno energetikos remontas). Misiunas: Baltic countries' and Hitachi to develop a joint position on economic viability of nuclear facility project August 30. Dalius Misiunas, CEO of Lithuania’s state-owned electricity group Lietuvos Energija (Lithuanian Energy) informed that energy companies of all three Baltic States and Japan’s corporation Hitachi are working on a joint position on economic viability of the project of Visaginas nuclear facility. The parties seek to prepare the joint position by the second half of September or by October 1 at the latest. The discussions center on economic justification of this project and the final decision on whether to build the new nuclear power plant should be taken in fall, as emphasized by the Prime Minister Algirdas Butkevicius. In case of positive evaluation from all 4 parties involved, the next step would be to make a decision on setting up a company for the implementation of the project. Klaipeda Oil CEO: gas storage talks with Latvia approaching end July 24. Klaipedos Nafta (Klaipeda Oil), the state-owned petroleum product terminal operator implementing the project on the construction of a liquefied natural gas (LNG) terminal, believes that an agreement with Latvia on the storage of gas at the Incukalns underground gas storage facility could be reached in the near time. Lithuania plans to build the LNG terminal in Klaipeda by the end of 2014 to obtain a cheaper alternative to Gazprom- supplied Russian gas. EBRD resumes funding for Ignalina nuclear facility’s decommissioning project July 25. The European Bank for Reconstruction and Development (EBRD) resumed the funding for a spent nuclear fuel storage facility project (B1), one of the key projects in the decommissioning of Lithuania’s shut- down Ignalina Nuclear Power Plant (INPP), which was suspended temporarily last December. Funding had been resumed in the light of the progress made in the implementation of B1 project and in the settlement of the issues pertaining to security matters, the Energy Ministry said in a press release. Sources: Statistics Lithuania, Ministry of Finance, Invest Lithuania, The Baltic Course with reference to the news agency ELTA, BNS, business daily Verslo Zinios, www.cv.lt, www.15min.lt, press releases of the companies mentioned.