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Wednesday 22.11.2017 | Name days: Aldis, Alfons, Aldris

Businessman: influence on political processes brings benefits

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As long as you do not have a direct influence on political decision-making, the result will not be worth the invested work, the Chairman of AS Ceļu pārvalde Board Mārtiņš Lauva told in an interview to the business news portal BNN.

Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RU, Martins Lauva

Martins Lauva

AS Ceļu pārvalde is facing a tense financial situation, will you aim at becoming a full-fledged road construction market participant?

Historically, Ceļu pārvalde has been more a maintenance, not road construction company. We maintain streets in three of the six districts of the capital, so we are not accountable for all Riga. I will stick to the former Board Chairman Mārtiņš Vitkovskis started road construction direction. Both our employees’ qualifications, and company’s technical potential allows this. Currently, A.C.B, Binders and Saldus ceļinieks are the key local market players, as regards foreign enterprises, the Estonian company Merk Group should be mentioned. While AS Latvijas autoceļu uzturētājs is the main contractor. Last year we significantly «grew muscles» in road construction, and this year we are ready to compete more seriously with other companies. Our asphalt concrete factory is a significant advantage of ours. We have two main tasks for this year – strengthening of the company’s position in road construction market and the internal restructuring to transform Ceļu pārvalde into a modern, transparent and flexible company. We want to become more aggressive and not to miss any road construction tender. We will participate with a pricing policy getting us as many orders as possible. I do not mean dumping prices. The company has to attain a neutral money flow this year; therefore, the aim is to raise the number of orders.

What were the results of Ceļu pārvalde in 2010 and did you manage to reach the planned turnover of about 18 million lats?

It is clear the 2010 turnover was not 18 million lats, but it will certainly exceed 12.65 million lats in 2009. In terms of money flow, we acknowledge last year brought losses, but it is impossible to discuss exact numbers yet.

Did going in for politics pay off?

My first attempt to influence the processes vital for business was active work at the Latvian Chamber of Commerce and Industry (LCCI) Board together with Žaneta Jaunzeme – Grende. Yet it did not appear to be sufficiently effective, so I set for big politics. As long as you do not have a direct influence on the political decision-making, the result will not be worth the invested work. When you gain influence on political process, the benefit is huge.

Do many people turn to you, as a potential investor, with their business projects?

Yes! I have heard out many ideas, thoroughly analyzed them and concluded – the ideas are not viable in 99 percent of cases, unfortunately, about half a percent is usually unsuccessful. Therefore, we use the remaining half a percent. The majority of projects cannot be described as spectacular, rather than slapdash. People often make a mistake assuming if something interests them, it will also excite others and generate money.

Do you still build houses in California (near Big Bear Lake golf club and lakes) despite the US mortgage market decline?

No, all the projects in the US are put on hold. We are waiting for a better market situation. The liquidity of these houses has reduced. Also, banks no longer grant loans to those interested in buying a house.

Will the prices of apartments and houses in Jurmala and Riga drop even more?

It is normal for any economy to see the waves of development and recovery. At first, the consumption of food, household goods, furniture, and finally apartments surges, it also promotes the construction boom. We cannot talk about a systematic housing price formation mechanism, if it is artificially maintained by commercial banks, purchasing apartments in auctions through subsidiaries. Instead of a free market, it is a controlled one. Consumers’ expectations are the most important – as soon as they start believing in the state and stable, predictable income, then objective housing growth tendency will appear as well. In order to achieve the average Western European square meter amount per inhabitant, 8 million square metres had to be covered with buildings. What really happened? Approximately 300 000 square meters were covered, but the available financing from banks was equivalent to 8 million square metres. Stockholm and Finland experienced a similar situation 20 years ago, Britain – 15 years ago. Also in Japan the real estate prices grew 4.5 to 7 times 20 years ago. The market has a short memory – 10 years.

How to change investors’ opinion about Latvia?

Investors will not come to help Latvia get out of the crisis, but only to earn more money. We have to determine Latvia’s strengths – firstly, the geographical location and efficient transit infrastructure; secondly, for the time being, a skilled and relatively cheap labour in the context of Western Europe. The government should promote these two factors. We will never be able to compete with China, India or South Korea in terms of manufacturing industry.

Would you suggest introducing a tax for luxury commodities – yachts and expensive cars?

Yes, this is a principle of social justice. If the society has helped me to reach a financial situation where I can afford to live luxuriously, I have to share it with others.

Why did you say acquaintances mean nothing in business?

I consider careful planning as my key to success. Certain circle of acquaintances will form in line with the development of a private business, but they will never start up a business instead of you.

Leave a reply

  1. Pop says:

    “build houses in California (near Big Bear Lake and golf club)” wow that’s a wealthy man, of course has has to share with others :D (me!)

    Thumb up 0 Thumb down 0

  2. Ren says:

    The entrepreneur has a point, however, acquaintances can significantly influence business deals.

    Thumb up 0 Thumb down 0

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