Foreign partners don’t trust Estonian entrepreneurs

Foreign goods and commodity sellers demand advanced payments from Estonian companies and national guarantee from Kredex isn’t enough, Äripäev writes.  Latvian and Lithuanian companies face the same problem.

Majority of Estonian companies have dealt with the problem – it’s quite ordinary if foreign company asks for up to 70 pct of payment in advance, sometimes 100 pct for goods and services and businessmen claim it is becoming more common. Even if the relations with partners have been good for a long time. 

The need for goods makes entrepreneurs go to banks, who often refuse of giving a loan.

Read more: BBN

Swedbank is worried about the situation in the Baltics

The growing crisis in the Baltic countries makes Swedbank moving bad housing loans and corporate debts to separate companies, so-called bad bank, Dagens Industri writes.  The model is Swedish Securum and Diligentia, which took over Nordea and SEB’s problem loans during the financial crisis in the 1990s.

“There is a lot of work in the Baltic countries, to deal with a situation that is becoming more difficult,” said Thomas Backteman, the head of investor relations at Swedbank.

“We are setting up special companies for problems involvement in the Baltics,” he noted.

Read more: BBN

Sales by Rimi grew 8 percent in 2008

Stores of the Rimi Estonia supermarket chain saw their sales climb 8% year on year to 391.4 million euros in 2008.
Sales by the Rimi Baltic Group grew 13% to 1.31 billion euros.
Sales by the Rimi Baltic Group in December 2008 increased by 5% compared with December 2007 to 132.4 million euros.
December sales by Rimi Estonia amounted to 38 million euros, by Rimi Latvia 65.4 million euros and by Rimi Lithuania 29 million euros, marking annual increases of respectively 1 percent, 9 percent and 5 percent.
Rimi has a total of 233 stores in the Baltic countries, of these 74 in Estonia, 97 in Latvia and 62 in Lithuania.

Source: Estonian Review

Five times as many people pass Tallinn port as population of Estonia

A total of 7.3 million passengers passed through the Port of Tallinn last year, 11% more than in 2007 and according to the company the highest figure of all time.

The port said that the Tallinn-Helsinki route, where the growth during the year was more than 10%, and the Tallinn-Stockholm route, where the growth figure was 14%, accounted for the biggest share of the passengers.
A total of 6.1 million passengers travelled on the Helsinki-Tallinn route and 773 113 on the Tallinn-Stockholm route last year.

The number of cruise passengers increased by 28% last year against 2007, with 377 522 people visiting Tallinn and Saaremaa. Mainly Americans, Brits, Germans and Spaniards arrived at the Port of Tallinn on cruise ships.
Last year the number of ships calling at the port fell by a by 16% compared with 2007 as the passenger ship operators Superseacat and Nordic Jet Line wound up their operations during the year.

Source: Estonian Review

Producer price indices in December

According to Statistics Estonia, in December 2008 the percentage change in the producer price index was -0.2% compared to November and 5.2% compared to December of the previous year.

In December compared to the previous month the producer price index was mainly influenced by the decrease in prices in the manufacture of food products and in the manufacture of building materials. Compared to December 2007 the prices increased most in energy supply and in mining.

Change in the producer price index by economic activity, December 2008

Economic activity November 2008 –
December 2008, %
December 2007 –
December 2008, %
TOTAL -0,2 5.2
Energy supply 0.0 30.7
Mining 6.3 14.3
Manufacturing -0.5 2.8

In December 2008 the percentage change in the export price index was -0.5% compared to November and 1.0% compared to December of the previous year.

In December compared to the previous month the export price index was mainly influenced by the decrease in prices in the manufacture of chemicals and chemical products and in the manufacture of metals and by the increase in prices in the manufacture of food products and in the manufacture of wearing apparel.

In December 2008 the percentage change in the import price index was -2.8% compared to November and -1.4% compared to December of the previous year.

In December compared to the previous month the import price index was mainly influenced by the decrease in prices of mineral fuels, chemical products and metal products.

Source: Statistics Estonia

Construction cost did not change much

According to Statistics Estonia, in 2008 compared to the average of the previous year, the percentage change of the construction price index was 3.4%. The index was mainly influenced by the decrease in the labour costs.

The annual change of the construction price index was so low last in 2000 when it was 2.5%. During the construction boom in 2006 and 2007 compared to the previous year, the construction price index changed 12.7% and 10.3%, respectively.

In the 4th quarter of 2008 the percentage change of the construction price index was –1.5% compared to the 3rd quarter and 0.5% compared to the 4th quarter of 2007. In the 4th quarter compared to the 3rd quarter and to the 4th quarter of the previous year, the construction price index was primarily influenced by the decrease in the labour costs.

In the 4th quarter the change of the repair and reconstruction work price index was -1.5% compared to the 3rd quarter and 0.7% compared to the 4th quarter of 2007. In 2008 the change of the repair and reconstruction work price index was 4.0% compared to the average of 2007.

The calculation of the construction price index covers four groups of buildings — detached houses, blocks of flats, industrial buildings and office buildings, as well as office buildings covered by the repair and reconstruction work price index. The construction price index expresses the change in the expenditures on construction taking into consideration the price changes of basic inputs: labour force, building materials and building machines.

Change in the construction price index, 2008 and 4th quarter 2008

  3rd quarter 2008 –
4th quarter 2008, %
4th quarter 2007 –
4th quarter 2008, %
2007–2008, %
TOTAL -1.5 0.5 3.4
labour force -2.7 -1.7 4.1
building machines -0.9 2.8 5.5
building materials -0.9 1.3 3.0
Index of detached houses -1.8 0.8 3.9
Index of blocks of flats -1.6 0.4 3.4
Index of industrial buildings -1.4 0.9 3.7
Index of office buildings -1.4 0.2 3.1

Change in the repair and reconstruction work price index, 2008 and 4th quarter 2008

  3rd quarter 2008 –
4th quarter 2008, %
4th quarter 2007 –
4th quarter 2008, %
2007–2008, %
TOTAL -1.5 0.7 4.0
labour force -2.8 -1.8 4.4
building machines -1.1 0.7 3.6
building materials -0.8 2.2 3.8
Source: Statistics Estonia

Cost of heat energy and tobacco increased the most

According to Statistics Estonia, in the 4th quarter of 2008 the percentage change of the consumer price index was 0.6% compared to the 3rd quarter and 8.3% compared to the 4th quarter of the previous year.

In the 4th quarter of 2008 compared to the previous quarter, the consumer price index was mainly influenced by the decrease in the prices of motor fuel (-18.5%) and by the increase in the prices of heat energy and tobacco (28.2% and 18.8%, respectively).

In the 4th quarter compared to the 4th quarter of 2007, the prices of goods increased by 6.1%, of which the prices of food products by 11.8% and the prices of manufactured goods by 1.5%. The annual increase of prices of services was 12.5%. The index was mainly influenced by the price increase of heat energy (55.1%), food (7.0%), alcoholic beverages (18.0%) and tobacco (51.1%).

Change of the consumer price index by commodity groups, 4th quarter 2008

Commodity group 3rd quarter 2008 –
4th quarter 2008, %
4th quarter 2007 –
4th quarter 2008, %
TOTAL 0.6 8.3
Food and non-alcoholic beverages -0.8 6.8
Alcoholic beverages and tobacco 6.5 26.5
Clothing and footwear 4.1 3.0
Housing 7.1 17.8
Household goods 1.5 5.0
Health 0.5 6.7
Transport -8.0 3.3
Communications -0.2 -1.2
Recreation and culture 0.0 1.7
Education 3.3 8.9
Hotels, cafés and restaurants 0.3 9.9
Miscellaneous goods and services 0.2 6.5
Source: Statistics Estonia

People were protesting in Vilnius

Thousands of people all over Lithuania gathered to Vilnius mass protest and tried to break into the Parliament building, delfi.ee quotes delfi.lt.  Their goal is to stop some coalition reforms. People arrived with special buses and currently there are nearly 7000 of them.

The crowd demanded Saeima’s chairperson Arūnas Valinskas to report them, but only Artūras Zuokas, the head of Liberal Union came out. People threw egg at him.

Valiskas’ representatives said he can’t come to the meeting for he is having a lunch with the President of Norwegian Parliament Thorbjørn Jaglandiga.

Police has strenghtened duties to avoid possible riot.

Couple of days ago a peaceful protest in Latvian capital Riga grew into riot.

Some protestors tried to break into the Parliament building, but police stopped them. People went behind Saeima and started to throw snowballs, rocks, bottles, eggs and smoke bombs at the building. They scream “Lithuania” and “Down with Saeima”.

400 policement are on duty, another 150 are in reserve. Agressive protesters are removed from the crowd.  Three people are injuried.

Source: BBN