Sadolin Paints Centre enters Lithuanian market

The Estonian paints reseller OÜ Värvikeskuste Grupp (Paint Centres Group) that operates under the Sadolini Värvikeskus trade mark recently signed a contract by which it acquired a 60% holding in the Lithuanian paints reseller Multikontraktas, the business centre Äripaev reported.
The Lithuanian company is planning to open a paints store in Vilnius.
Last November Värvikeskuste Grupp established its Latvian subsidiary Krasu Grupa. It operates a paints store and warehouse in Riga.
“We have become the biggest company specialising in the sale of paints in Estonia and opportunities of growth are limited in our own country,” said Olle Saare, CEO and owner of Värvikeskuste Grupp.
“At present it is extremely difficult to earn a profit from these markets but we will do our best to avoid a major loss. If the market a bit more normalised, we are already in the picture or have won a certain position,” Saare commented on the situation on the Latvian and Lithuanian markets.
The turnover of Värvikeskuste Grupp in 2009 was 90 million kroons (EUR 5.7 mln).

Source: Estonian Review

Estonia to back construction of 3 cold storage plants with 9mEUR

The Estonian government will allocate three fishing co-operatives 135 million kroons (EUR 8.6 mln) in investment support from the European Fisheries Fund.
The cold storage plants to be built with the help of the investment support will enable fishermen to get considerably higher prices for fish in the future, the Agriculture Ministry said.
One refrigeration plant will be built in Paldiski, another in Haapsalu and the third in the Pärnu region. Each facility is to hold a minimum of 2 000 tons of fish and have a daily refrigeration capacity of 200 tons.
Among them, the three fishing co-operatives getting the support use 90% of Estonia’s quota of sprat and Baltic herring trawling.

Source: Estonian Review

Consumer price index in February

According to Statistics Estonia, the consumer price index decreased 0.1% in February 2010 compared to February of the previous year and increased 0.2% compared to January.

Goods were 0.8% more expensive and services 1.8% cheaper compared to February of the previous year. Food products were 3.1% cheaper and manufactured goods 4.3% more expensive.

Regulated prices of goods and services have risen by 7.6% and non-regulated prices fallen by 2.5% compared to February of the previous year.

Compared to February of the previous year, the prices of motor fuel have increased the most (31.4%), which also had the biggest influence on the index. The index was more notably influenced also by the 5.1% cheaper food, of which bread and cereals (price decrease 9.1%) gave one third and the 8.3% cheaper dairy products also gave a third.

In February compared to January, the consumer price index was mainly influenced by the 12.4% higher prices of fresh vegetables and by the end of sales of clothing. Compared to the previous month, the price of white bread decreased the most (5.9%).

Change of the consumer price index by commodity groups, February 2010
Commodity group February 2009 –
February 2010, %
January 2010 –
February 2010, %
TOTAL -0.1 0.2
Food and non-alcoholic beverages -4.7 0.2
Alcoholic beverages and tobacco 1.6 0.0
Clothing and footwear 2.5 1.2
Housing -4.0 0.1
Household goods -0.1 -0.1
Health 0.8 0.3
Transport 9.8 0.7
Communications -0.6 -0.9
Recreation and culture -2.8 0.1
Education 1.2 0.0
Hotels, cafés and restaurants -2.4 0.3
Miscellaneous goods and services 2.9 0.0

Source: Statistcs Estonia

The decline in business sector deepened last year

According to preliminary data of Statistics Estonia, in 2009 the total profit of business sector was 17.2 billion kroons being more than two times smaller than in the previous year.

Compared to 2008 profits decreased in most economic activities. Only mining, energy, real estate and human health activities were capable of increasing their profits. Agriculture and forestry as well as accommodation and food service activities were in loss.

In 2009 enterprises sold goods and services for 502 billion kroons, which was a fifth less than a year earlier. Although net sales decreased the most in construction and education, net sales of the whole business sector were mainly influenced by the wholesale and retail trade as well as manufacturing enterprises due to a bigger share of these economic activities in the gross net sales of business sector. Compared to 2008, the net sales of these economic activities decreased by 23% and by a fourth respectively.

The costs of enterprises decreased 19%, thereby personnel expenses decreased 17%.

The investment activeness of enterprises slowed down, too. Last year, enterprises invested 26.6 billion kroons, which was a fourth less than in 2008. Investments were mainly made in the construction and alteration of buildings and in equipment and machinery. Major investors were energy, manufacturing, and transportation and storage enterprises. The enterprises of these three economic activities made a half of the total investments of enterprises. Only the investments in acquisition of buildings and structures (8%) and in land (6%) increased in comparison with 2008. Other investments decreased.

The net sales of business sector decreased by nearly a fourth in the 1st, 2nd and 3rd quarters of 2009 compared with the respective quarters of 2008, but in the 4th quarter the decline in net sales slowed down. In the 4th quarter, the enterprises’ net sales of goods and services totalled 125 billion kroons, which was 15% less than in the same period a year earlier.

In the 4th quarter, enterprises invested 6.7 billion kroons, i.e. by a fourth less than in the 4th quarter of 2008.

Total profit of the business sector, 2002–2009

Diagramm Total profit of the business sector, 2002–2009

Source: Statistics Estonia

February saw a moderate price rise

According to Statistics Estonia, the cost of the consumer basket grew by 0.2% month-on-month in February and the price level decreased by 0.1% year-on-year.

Since the major price drops of the first half of 2009 are this year being replaced by modest increases, the inflation rate will be lower in the coming months compared to the same period a year ago. Prices will increase due to the rise in excise duties as of January 2010 and also because of the growing cost of energy carriers in the global market, which will cause the price of thermal energy to go up in the months to come. In addition, compared to global-market prices, the gap of the motor fuel price less taxes has been wider at the beginning of 2010 than the average of previous years. At the same time, the disposable income of households continues to shrink, so there are downward pressures on the prices of the rest of the goods and services.

According to Eesti Pank’s autumn forecast, the annual average price level may decline by 0.4%. The price level in Estonia has been going up for quite a long time along with the surging GDP. The purchasing power of the residents of Estonia was 67% of the EU average in 2008, but it dropped in 2009. As a result, the relative price level is not expected to grow here in the near term. The price level had reached 70% of the EU average by 2008.

The price level of food was 81% of the EU average in 2008. Estonia stands out among the Central and Eastern European countries for the high price level of consumer services, and housing related costs are also considerable. At the same time, the price level of our government sector services is comparable to that of other countries. Clothing and footwear are relatively expensive in Estonia – the price level of the latter exceeded the EU average by nearly a sixth in 2008.

At the start of this year Statistics Estonia started using new consumer basket weights to measure inflation. These are based on households’ 2009 purchases, which underwent some changes in their structure. Consumers have cut expenditure on leisure time, eating out, accommodation and purchasing durable goods. Looking at basic commodities, the share of food and non-alcoholic beverages has increased in the consumer basket, accounting for slightly below 25% of the total expenditure. The share of housing-related costs soared as well, since it is difficult to quickly curb costs on such goods and services.

Source: Martin Lindpere, Eesti Pank, economist

Use of timber in electricity generation creates 500 new jobs

In the opinion of the Estonian State Forests Management Center (RMK) use of renewable energy in the Vao and Narva power plants has given an impetus to forestry and has created from 300 to 500 new jobs in the sector by the present.
The opportunity of selling low-quality timber to electricity and thermal energy generators has increased the security of managers of both private and state forests, Elina Kink, head of communications at RMK, told BNS.
RMK sells wood chips to Narva Elektrijaamad AS (Narva Power Plants), a subsidiary of Eesti Energia power utility, and Tallinna Kute to the Vao power plant controlled by the international Dalkia group.
According to estimates RMK sells to the Narva Power Plants about 17 000 cubic meters and to the Vao Power Plant about 6 000 cubic meters a month.

Source: Estonian Review