bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Monday 24.07.2017 | Name days: Krista, Kristiāna, Kristiāns, Kristīne
LatviaLatvia

Agency: Latvian businessmen suffer losses because of situation in Ukraine

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvia’s total volume of export to Russia reached EUR 1,470,000,000 last year. Import figures are said to have been EUR 1,200,000,000. One year ago, Russian businessmen invested half a billion euro in Latvia. This includes approximately 100 million in electricity and gas sectors and 50 million in real estate sector.

Latvia mostly traded with Russia with food products, the lion’s share of which was alcohol. According to Investment and Development Agency of Latvia (LIAA) – TOP 7 export goods to Russia include whiskey, medicine, cognac, particle boards, sprats, rum and vodka. Import from Russia to Latvia is dominated by oil and gas products, as reported by Nekā personīga (Nothing personal) programme of TV3.

According to the agency, the crisis has already begun.

‘Our agency is certain – Latvian entrepreneurs are suffering losses already. This applies to transit and logistical sectors and trading. Businessmen are concerned about the future. If sanctions are introduced, the losses businessmen suffer right now will be next to nothing compared to what will come after,’ – says LIAA Director Andris Ozols.

Compared to that of Russia, the volume of trade Latvia has with Ukraine is 13 times smaller. Ukrainians mostly invest in Latvia’s financial and banking sectors. The volume of real estate deals does not exceed EUR 5 million. Latvia’s exports to Ukraine include medicine, mobile phones, television sets and vodka. Ukraine provides Latvia with – metal alloys, train coaches and tugs. Trade volumes with Ukraine had reduced by half one year ago. What might happen this year – none can say. Nevertheless, Latvia may also benefit from a conflict in Ukraine.

‘The centre of Kyiv now has plenty of potential trading space available for attractive prices. Latvian businesses that have the resources should take advantage of this situation. Even though such steps may be emotionally heavy – business is business,’ – says Ozols.

Latvijas Balzams is the largest Latvian exporter of alcoholic drinks to Russia. It belongs to SPI Grupa. Its owner, Jurijs Šeflers, has invested money in the construction of a Z-tower in Riga. Latvijas Balzams is worried that sanctions against Russia could close the Russian market for Latvian businesses for a long time.

‘If Russia ends up being economically isolated, it will likely switch to other countries. And after the end of the sanctions, it may be difficult for the EU to re-establish good trade relations,’ – believes Latvijas Balzams Commercial Director Valters Kaže.

Rīgas piena kombināts is now owned by a Russian businessman – Andrei Bezhmelkitsky bought it along with Valmieras piens in 2011. The growing crisis has yet to impact the company. The fluctuations of the Russian ruble raise some serious concerns. Contracts with Russian companies allow them to pay for supplies within one month’s time. If the value of the Russian ruble falls within this period of time, Russian companies may end up paying less. Banks have become cautious in providing loans to companies related to Russia.

Possible sanctions may freeze multiple important national contracts, including: the sale of airBaltic, Citadele Bank and Liepājas Metalurgs.

Finance Ministry does not plan to narrow the range of possible investors; Russian investors are still welcome.

Sanctions against Russia will likely impact Latvia’s transit sector the most. This especially applies to railway cargo transport. In 2013, 77% of all railway cargo handled in Latvia came from Russia.

Soon the EU will gather to discuss sanctions that will limit Russian businesses in Europe. In order to prevent such a turn of events, Russia is expected to start constructive discussions with Ukraine. Nevertheless, Latvian entrepreneurs should keep in mind that there will be losses regardless of the two possible outcomes.

‘Of course, we do not want to become another railway station. We want our planes to fly to Russia. We want our businessmen to cooperate on equal terms and clear contracts that are recognized and respected by both sides. As for the current situation – what we see now is an unprecedented situation. And actions that have breached all possible and impossible agreements and actions that contradict all international conventions, traditions etc. It is possible that the situation will become more complicated. I also understand that there will be losses if the situation develops following this scenario. But this is the kind of situation when we speak of things that are more important than losses in economic cooperation,’ – explains State Secretary to Foreign Ministry Andrejs Pildegovičs.

Ref: 102.109.109.2111


Leave a reply

BNN summary of the week: Kucinskis in Ridzene’s room and government’s rushed decisions

BNN offers a summary of this week’s topical news in a variety of categories: Change; Fight; Truth; Business and Growth.

Tourists die in Aegean Sea earthquake

A powerful quake that struck in the Aegean Sea has taken the lives of two persons in Greece, local authorities have stated.

Fashion in business: how to be heard in the modern-day world?

It would seem that nowadays strict fashion trends have «died». This is because people for ways to look beautiful and comfortable. One of the minds behind TRÉS fashion line, Enija Mugurevica shares advice how to start a business in the fashion industry from scratch and be heard and noticed in the modern-day world.

FCMC fines Norvik Banka for EUR 1.3 million and Rietumu Banka for EUR 1.56 million

Finance and Capital Market Commission in cooperation with Federal Bureau of Investigation’s Counterproliferation Center found out in a target inspection that Latvian banks – Norvik Banka and Rietumu Banka – have not followed requirements of regulations for the prevention of money laundering and terrorism funding.

Saeima approves controversial amendments to Credit Institutions Law

On Friday, 21 July, Latvian Saeima approved amendments to the Credit Institutions Law, which were previously returned to the parliament for a repeated viewing by President Raimonds Vejonis, completely unchanged.

Bank of Latvia: tax reform is a disappointment; it will not improve competitiveness

The tax reform submitted to the Saeima for approval is one big disappointment that will not improve competitiveness, said head of the Monetary Policy Office of the Bank of Latvia Uldis Rutkaste in an interview to LNT 900 seconds.

Betsafe predicts: will Duklavs remain Latvia’s Agriculture Minister?

Although Unity has asked the Union of Greens and Farmers to replace Agriculture Minister Janis Duklavs with someone else after the scandalous oligarch talks in Ridzene hotel, Duklavs will likely keep his post, according to Betsafe bookmakers. There is a 33% probability of Duklavs losing his post.

Latvian alcohol industry has an offer to increase excise tax rate

Experience shows – rapid increase of excise tax results in rapid increase of prices and rapid decline of revenue for the state treasury. Based on careful calculations, Latvian Alcohol Industry Association asks the government to stick with the current excise tax increase plan.

Air temperature to reach +24° C… +25° C in Latvia on weekend

Weather is expected to be largely dry this weekend in Latvia. Next week, however, is expected to be rainy, as reported by State Environment, Geology and Meteorology Centre.

Saeima deputies sign agreement on Oligarch talks committee’s formation

So far only parliament members have signed the agreement on the formation of a Saeima committee for the investigation of Oligarch talks. Neither of them represents Unity – Karlis Serzants from Union of Greens and Farmers and Einars Cilinskis from VL-TB/LNNK.

Seaima Praesidium approves parliamentary budget for 2018

On 20 July, Saeima Praesidium approved the parliament’s budget request for 2018. It is planned to be EUR 22.04 million, setting funding to maintain current functions on the level of 2017, BNN was informed by Saeima press-service.

Beer brewers: fooling around with tax reforms could destroy Latvia’s beer industry

By increasing excise tax for beer, the goal of reducing alcohol consumption will not be achieved. This is because consumption of other alcoholic beverages will increase as a result, notes CEO of Latvian Breweries Union Peteris Linins, commenting on the government’s plans to raise excise tax for beer.

4,558 marriages registered in Latvia in first six months of 2017

Over the past three years, Latvian birth number almost has not changed and constitutes 22 thousand annually. 10,175 children were born in the first half of 2017, which means 990 newborn fewer than in the same period a year ago.

Broadcasting organizations ask NEPLP to stop meddling with public media contents

The board of Latvian Association of Broadcasting Organizations urges the government and National Electronic Mass Media Council to continue realizing reforms in public media.

Kucinskis also met with Slesers in the infamous meeting room of Ridzene hotel

Latvian Prime Minister Maris Kucinskis admits having met with Ainars Slesers in the now infamous meeting room in Ridzene hotel a couple of times, specifically when the People’s Party made the decision to join Par labu Latviju.

Pumpurs hands 99% of Užavas alus capital shares to his son

Ildis Pumpurs, up until now the only owner and board member of Ventspils Užavas alus brewery, has handed 99% of the company’s capital shares to his son Oskars Pumpurs.

Repeated elections in Kekava – activity twice as high so far

Repeated election has commenced in Kekava’s 785 election site. 274 voters or 7% of local voting population took part in elections in the first day, according to data from the election site.

Estonia plans accepting from Turkey 160 Syrian refugees

Estonian police are looking into the documents on 160 refugees from Syria that are to be moved to Estonia in line with an agreement reached between the EU and Turkey.

Experts: potato harvest in Latvia may come later than usual this year

Potato harvest in Latvia may come one week later than usual. Still, the harvest is expected to be on the level of last year, BNN was told by Potato Growers and Processors Union.

News feed to be added to Google's website and mobile app

Internet search giant Google has said it would add a continuous feed of news and other content to its homepage and mobile app, which would be displayed before a user makes a search query.

NATO and Chinese ships perform joint manoeuvrer before entering Baltic Sea

This week, Standing NATO Maritime Group One welcomed in international a group of Chinese Navy ships that entered the Baltic Sea through the Strait of Denmark from the North Sea. Ships of both groups performed a mutually coordinated manoeuvrer for the ships to ensure safe entry of ships into the Baltic Sea, as reported by Latvian Defence Ministry.

Russia distances itself from proclamation of «Malorossiya» in eastern Ukraine

The Kremlin has noted that the proclamation of a county entitled «Malorossiya», or «Little Russia» in the pro-Kremlin-separatist-held eastern parts of Ukraine is a personal initiative of the rebel leader.

Expert: oil prices will likely remain zigzag-like

Aside from one week, oil reserves have been continuously declining since April. This trend will likely continue. Oil refining activities were not too high. This reduced demand for oil. In Q3, oil producers will increase production output and compound stores, comments macroeconomics expert Dainis Gaspuitis.

Construction output in Q1 in Latvia – tenth largest in EU

In Latvia, construction production volume in Q1 2017, when compared with the same period of last year, grew 8.4%. This puts Latvia on the tenth place among EU member states, according to the latest data from Eurostat.

Do you have an acquaintance currently looking for a job?

View Results

Loading ... Loading ...

Polls Archive



Category feed: Feed: