Books on Latvia
Update No: 287- (29/11/04)
Pro-Russian Politician to become Latvian Prime Minister
Vice Premier and Minister of Transportation and Communications Ainars Slesers
claimed his readiness to head the Latvian cabinet of ministers at a press
conference on November 9th. Businessman, millionaire and active politician
Slesers, former Latvian Minister of Economy, came out for the development of
friendly relations between Russia and Latvia and the increase of bilateral trade
Mr. Slesers heads the centrist First Party in the Latvian parliament. Its
members discussed the formation of the new cabinet with other factions.
After the failure of the draft budget in the first reading the Latvian
government had to resign on October 21, 2004.
The formation of a new government is a key topic of discussion across Latvia.
However, the coalition has not been set up yet. According to experts, the new
Latvian government will be right-wing.
From February 5 to October 21 the cabinet of ministers was the centre-leftist
government of the minority supported by the so-called Russian-language parties
For Human Rights in United Latvia and the Party of People's Accord.
Latvia hosts largest ever Belarusian exhibition
Latvia cannot ignore its large neighbour, Belarus, four times its size in
population and territory, despite its unsavoury political leadership in the
regime of President Alexander Lukashenka, just made head of state in perpetuity
in a dubious referendum. A Belarus economy forum (officially referred to as Days
of Belarusian Economy in Latvia) was held in Latvia on November 4th-7th. The
focal point of the forum - BelarusEXPO '2004 exhibition, featuring products by
over 100 Belarusian enterprises and associations - has been recognised the
biggest one in its history, reported Councillor Vera Skvortsova, who supervises
trade-and-economy matters in the Belarusian Embassy in Latvia.
In her words, the 5th BelarusEXPO '2004 exhibition was attended by around 40,000
As reported by Ms Skvortsova, the present-day exhibition was arranged with the
preferences of Latvian business in mind. In particular, the expo featured a wide
array of agricultural machinery. Besides the traditional machinery by Minsk
Tractor Plant (MTZ), this year visitors could see products by Gomselmash,
Lidselmash and several other producers of agricultural equipment.
Ms Skvortsova also stated that at the exhibition they presented the first
Latvian-assembled MAZ truck. Hence, the project to assemble trucks in Latvia
from MAZ kits on the premises of the Latvian MAZ Service Centre has been
successfully implemented. There they are planning to assemble around 100 MAZ
trucks a year.
Besides, the forum saw a series of co-operation agreements signed. In
particular, Belarus and Latvia completed forming a legal base in the sphere of
standardisation, metrology and certification by signing three co-operation
agreements, Ms Skvortsova said.
Moreover, the parties signed a technology transfer agreement to enable
scientists from Belarus and Latvia to get access to the European Union's
structural technology fund. On the whole, exhibitions and forums like this
contribute to trade- economic contracts between Belarus and Latvia, she said.
Over January-August 2004 the bilateral turnover totalled US$268.7 million, 2.7%
up on the year. Belarusian exports shrank 9.9% after the 2003 redistribution of
oil traffic between foreign operators. Imports doubled to US$56.6 million.
Belarus enjoyed a positive of balance in trade with Latvia at US$155.4 million.
The bulk of Belarusian exports to Latvia are crude and petrochemical products
(53.7%). Other important imports are timber and wood products, mineral
fertilisers, pre-fabricated steel, tractors and lorries.
In 2003 Latvia invested in Belarus' economy US$22.5 million. Latvia is among
Belarus' ten largest investors, as far as direct foreign investments are
concerned - US$4.7 million.
FOOD & DRINK
DBG strengthens Baltic position
The Danish Brewery Group (DBG), Denmark's second largest beermaker, has
strengthened its position in the Baltic markets through the acquisition of a
controlling stake in Lacplesa Alus, Latvia's number three brewer, Beverage Daily
DBG will pay 3.7m Euro for an 83.5 per cent stake in the Latvian firm, including
the assumption of more than two million Euro of debt and will gain around 11 per
cent of the 1.5 million hectolitre Latvian beer market as a result. Lacplesa's
sales this year are expected to be around six million Euro, mostly from its
premium brand Lacplesis, which has a large following in the horeca (hotel,
restaurant, catering) sector.
The takeover of Lacplesa will consolidate DBG's position as the second largest
beermaker in the Baltic States after Baltic Beverages Holding, the joint venture
between Scottish & Newcastle and Carlsberg which owns four beermakers in the
three Baltic countries. The move into the Baltic region is part of DBG's
restructuring plan, called V8, which has also seen the closure of a number of
breweries in more mature markets in western Europe.
Although DBG has been active in the Baltic countries since 1999, when it
acquired Lithuanian beermaker Vilniaus Taurus, its development there has been
relatively slow. The company's Lithuanian market position was strengthened by
the 2001 takeover of Kalnapilis (bought from BBH), while earlier this year the
group took its first steps into the Latvian market with the purchase of soft
drinks maker Cido Partikas.
DBG said that Lacplesa had lost market share in recent years because of a lock
of investment, but the merging of some operations with those of Cido Partikas
will help cut costs at the premium beermaker. The soft drinks group also has a
strong position in the horeca sector, allowing the two businesses to share
transportation and marketing costs and sales forces.
Purchasing and production costs at the Latvian brewer are also expected to come
down as it collaborates with the Kalnapilio-Tauro group (as the two Lithuanian
breweries are now called). DBG is also present in Poland, where it produces its
Faxe brand at a brewery in Poznan. Sales for the Baltic and Polish businesses
reached 322,000 hectolitres in the first half of 2004, up 2.3 per cent on the
previous year, although value sales were 7.3 per cent lower at 109 million
Danish crowns as a result of currency fluctuations. Kalnapilis in particular has
proven to be a major driver of growth for DBG, with the company's sales in
Lithuania up 4 per cent in the first half, well ahead of the market as a whole,
as a result of a revamp of the Kalnapilis brand.
Latvia to borrow €150m
Latvia plans to borrow €150m (100.6m lats) from the European Investment
Bank (EIB) to co-finance 2004-2006 projects funded by the European Union (EU),
Finance Ministry's press secretary Baiba Melnace told LETA recently. Local
governments that implement EU-funded projects will be able to borrow the
necessary funds from the state treasury. A delegation of EIB representatives
recently visited Latvia to appraise projects implemented with the help of EU
structural and cohesion funds and the projects' compliance with the bank's
priorities. The EIB's proposal is advantageous to Latvia, Melnace was quoted as
saying. Latvia's talks with EIB on using the bank's resources started at
end-2003. Latvia accepted EIB's proposal. The EIB delegation met with leading
specialists at finance ministry, environment ministry, transport ministry,
economy ministry and state treasury.
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