70 pct of the manufacturing production was sold on the external market

According to Statistics Estonia, in September 2010 the production of industrial enterprises grew 31% compared to September of the previous year. This year the growth of production has mainly influenced by the increase in external demand, since domestic market has slightly livened up only during the last months.

The moderate growth reported at the beginning of 2010 was followed by a rapid increase in spring; and in June, July and August enterprises gave over 20% more production than in the corresponding months of 2009.

The production of manufacturing increased 32% compared to September 2009. Export sales of the manufacturing production increased significantly (54%). Nearly 70% of the whole production of manufacturing was sold on the external market. The demand on the domestic market was considerably lower — the domestic sales increased 7% compared to September of the previous year.

In September, the production exceeded the volume of the previous year in most branches of industry. The growth in the production of manufacturing was most influenced by the branches holding bigger shares — manufacturing of electronic products where the production increased by more than one and a half times, and manufacturing of wood where the growth was 25%. With respect to the branches of manufacturing holding smaller shares, the production increased considerably in the manufacturing of motor vehicles, machinery and equipment mainly due to the increase in exports. The rapid growth in production was partly also influenced by the low reference base in 2009; this effect will last until the end of 2010. Regardless of the rapid increase, the industrial production just reached the level of 2005.

In September 2010 compared to August, the seasonally adjusted industrial production rose 4%; the production of manufacturing grew 5%.

In September 2010 compared to September 2009, the production of electricity increased 41% and the production of heat 15%. The increase in energy production was mainly caused by a growing demand for energy induced by more active manufacturing as well as by the growth in the exports of electricity.

The volume index and trend of production in manufacturing, January 2000 – September 2010 (2005 = 100)

Diagram: The volume index and trend of production in manufacturing

Read more from Statistics Estonia

Retail sales turned to increase

According to Statistics Estonia, in September 2010 compared to September of the previous year the retail sales of goods of retail trade enterprises increased 1% at constant prices. The decline in retail trade enterprises that had lasted for nearly two and a half years turned to a rise again in September this year.

In September, the retail sales of goods of retail trade enterprises were 4.5 billion kroons (288 million euros). Compared to September 2009, the retail sales of stores selling manufactured goods recovered significantly. It turned from decrease to increase and grew by 4%. The retail sales of other specialized stores, such as stores selling computers and their accessories, photography supplies, books, sports equipment, games and toys, etc., recovered remarkably. In those stores the retail sales turned from decrease to increase after 2 years of decline, growing 11% compared to September 2009. The sales in stores selling household goods and appliances, hardware and building materials also slightly recovered, but the retail sales of these stores could not gain growth yet in yearly comparison — the retail sales in these stores fell 7% compared to September 2009. Compared to September of the previous year, the retail sales of goods increased also in the retail sales in non-specialized stores with industrial goods predominating (17%), the retail sales of second-hand goods in stores (16%), the retail sales in stores selling textiles, clothing, footwear and leather goods (10%) and the retail sales of pharmaceutical goods and cosmetics (7%).

The retail sales in grocery stores stayed at the same level compared to the September of the previous year. The growth in sales volume in these stores was retarded by price increase of food products that had accelerated in September.

Compared to the previous month, the retail sales in retail trade enterprises decreased by 8% at constant prices. According to the seasonally and working-day adjusted data the retail sales decreased by 1%. During the nine months of 2010 (January-September), the retail sales in retail trade enterprises decreased 6% at constant prices compared to the corresponding period of the previous year.

In September the revenues from sales of retail trade enterprises were 5.6 billion kroons (360 million euros), out of which retail sales of goods accounted for 80%. Compared to September of the previous year, the revenues from sales increased 8% at current prices. Compared to the previous month, this indicator decreased 6%.

Retail sales volume index of retail trade enterprises and its trend, January 2002 – September 2010 (2005 =100)

Diagram: Retail sales volume index of retail trade enterprises and its trend

Source: Statistics Estonia

Orkla Group companies market Kalev products

Several companies of the Norwegian Orkla group market products of the Estonian Kalev Chocolate Factory in the Baltic countries, Russia and the Nordic countries.
Kaido Kaare, CEO of Kalev Chocolate Factory, told BNS that in order to increase export volumes Kalev had started to co-operate with several companies of the Orkla Group. “Our most important export target countries are the Baltic countries, Russia and the Nordic countries.”
Kaare said that Kalev had launched co-operation with the Finnish Panda sweetmeats producer. “In the framework of that co-operation, Panda markets Kalev’s products in Finland and Kalev respectively Panda’s products in Estonia.”
In the St. Petersburg area of Russia, Kalev launched co-operation with Krupskaya, a company in the Orkla group. “Via Krupskaya’s contacts Kalev has wider opportunities to get its products into the assortment of big Russian retail chains.”
He said that Kalev had established its first contacts also with K’oKo’, a company of the Orkla group operating in the Czech Republic.
From November 1 Spilva, a fruits and vegetable processor in the Orkla Group, will take over Kalev products’ distribution, sale and marketing operations in Latvia.
Orkla acquired Kalev Chocolate Factory this May.

Source: Estonian Review

Estonia to host EU IT agency after deal with France

 Tech-savvy Estonia is to host a new European Union IT agency, after a deal with France which was the only other nation in the race, Estonia’s Interior Minister Marko Pomerants told AFP on Friday.

“It has been agreed between Estonian and French officials that the headquarters of the EU’s future IT agency will be located in Tallinn,” Pomerants said.

The 27-nation European Union’s decision to set up a specific agency was made last year when member states decided that the bloc’s IT systems needed some form of central management.

Read more from http://ht.ly/2QKQT

Nordea earns 21.5 MEUR profit in in nine months

Nordea Eesti earned 335.6 million kroons (EUR 21.5 mln) of net profit in nine months, more than threefold the sum it earned in the same period last year. The total revenue of Nordea Eesti, a company in the Nordea financial group, grew by 30% during the nine months, totalling 827 million kroons.
The loan losses in the nine-month period fell from last year’s 272 million kroons to 179 million kroons in the same period this year.
“Growth of Nordea’s profit by several times was due both to stable growth in revenues as well as contraction in loan losses, and in the stabilisation of the economy growth in Nordea clients’ activity in using our products and services has clearly been seen,” CEO of Nordea Eesti Vahur Kraft said. He added that in terms of its assets Nordea was among the three biggest banks in Estonia.
The sum total of Nordea Eesti assets grew 8% compared with the same period last year and added up to 48.4 million kroons as of the end of September. The loan portfolio of the bank amounted to 43 billion kroons as of the end of September, growing by 4.3% on year.
Companies’ loan and leasing portfolio of Nordea Eesti amounted to 26 billion kroons as of the end of September, up 3% compared with the same years. The private persons’ loan and leasing portfolio grew by 4% on year and amounted to 14.7 billion kroons as of the end of September.
As of September Nordea Eesti had 145 488 clients, 22 offices, 100 ATMs, and 531 employees. As of the end of the quarter the bank had issued 84 908 bank cards and had 91 386 internet banking clients.

Source: Estonian Review

How to establish your own business as of 01.01.2011?

BBN asked Heili Haabu, attorney at law of  Luiga Mody Hääl Borenius, to explain what businessmen who plan to set up a new company from the start of next year need to keep in mind.

On starting a business, the founders face the question of which legal form to use and what is the best way to conduct company business. In light of the constantly changing Commercial Code, the answers to those questions might not be the same today as they were last year or a couple of years ago.

Private limited company or public limited company?

When choosing the legal form most suitable for business, the founders’ basic choice is between a private limited company and a public limited company. The Commercial Code regulating the management of these two types of company is becoming ever more flexible, so that today we cannot say that, in the case of a larger circle of founders and a larger investment, the form of a public limited company is absolutely justified, as is commonly believed. The draft Act on amending the Commercial Code, entering into force on January 01, 2011, will further enable founders to design a private or public limited company to meet their needs.

Read more from BBN

Baltic countries have one of Europe’s highest shoplifting rates

A new retail survey shows that shoplifters in the Baltic states cause retailers to lose 1.4% of revenues. This is third-highest rate in Europe behind Russia (1.61%), Turkey (1.52%) and on par with the Czech Republic (1.4%), according to ERR.

Food, alcohol, cigarettes, cosmetics and electronics are particular favourites with shoplifters.

From the start of the year, G4S that provides manned guard services in large number of grocery stores, had handed 4,000 shoplifters over to the police. This is 18% more than a year ago.

Read more from BBN

Estonia opens new honorary consulate in Canada

Minister of Social Affairs Hanno Pevkur and Estonian Chargé d’Affaires in Canada Riho Kruuv opened the Estonian Honorary Consulate in the city of Halifax in the province of Nova Scotia, Canada. The provincial government of Nova Scotia was represented at the opening by Minister of Finance Graham Steele. Estonia’s honorary consul for the province of Nova Scotia in Canada is John Olaf Soosaar.
With the opening of the honorary consulate, Estonia hopes to further intensify contacts between Estonia and Canada in the economic, tourism and cultural sectors. Estonia-Canada relations are made special by the fact that one of the biggest Estonian communities in the world is found in Canada. The community is socially active and has been remarkably successful in preserving Estonian culture outside of Estonia’s borders.
Honorary Consul John Olaf Soosaar, born in 1941, is a journalist and documentary film-maker of Estonian descent. Soosaar was born into a family of war refugees in Schwerin, Germany, and from there his family emigrated to Canada.
The consular region of the honorary consulate in Halifax is the province of Nova Scotia. The honorary consulate is located at the address 1526 Dresden Row, 7th floor, Halifax, Nova Scotia B3J 3K3, Canada. The honorary consulate can be reached at the phone number +1 902 421 1326 or +1 902 423 0484 and emails can be sent to the address soosaarjo@eastlink.ca.

Source: Estonian Review

Estonia donates computers, study supplies to Afghan schools

Estonia is supporting ten schools in Afghanistan with computers, study supplies and other things necessary for schoolwork. The Foreign Ministry allocated from its development co-operation budget 15 000 kroons (EUR 960) for each school in Afghanistan that has a twin school in Estonia, head of the Jaan Tõnisson Institute’s Global Education Centre Johanna Helin said. “Most schools wanted to use the funds to procure computers, but they also need study supplies for geometry lessons, and one school will get a well with Estonian aid.” Helin said the first supply consignment was handed over to the Aschiana Parwan school in Charikar, north of the capital Kabul.
“It’s a small school for girls where 125 girls orphaned in war or from very poor families are studying. Because of their circumstances they’ve had to work and miss school and are not accepted by regular schools any more,” the co-ordinator of the Estonian-Afghan twin school project, Maari Ross, said. In her words, the school helps girls catch up with regular school students by an express curriculum after which they have the opportunity to return to ordinary school.
The school received a computer and a sewing machine with Estonian support. “The sewing machine is especially important to this school because unlike ordinary school, students there also learn sewing and the hairdressing and beautician trades which are the main occupations for Afghan women to earn a living,” Ross said. Students are looking forward to an Internet connection to get in touch with students at the twin school, the Tallinn Technical Secondary School, via Skype, she added. The Tallinn students sent the Afghan girls pictures of Estonia, letters, and bags they made themselves. “It’s a very poor school even by Afghan standards. It lacks not only computers, but desks and chairs – students sit on the floor. We’re trying to find extra funds for the school to get desks, chairs and school uniforms,” Ross said.
The Jaan Tõnisson Institute launched in March 2009 a three-year project in Estonia aimed at establishing contacts between Estonian and Afghan schools and making Afghanistan known in this country. The project is financed by the European Commission and the Foreign Ministry from its humanitarian aid and development co-operation budget.

Source: Estonian Review

Decline in loan provisions increased banks’ profitability

The corporate and household loan and leasing stock declined by one billion kroons (i.e. 0.4%) in September, amounting to 240.1 billion kroons by the end of the month. In the third quarter the contraction in the loan portfolio continued at almost the same pace as in the previous quarter. Year-on-year, the total loan and leasing stock was more than 6.3% smaller at the end of September.

New loan and leasing contracts increased by nearly a third compared to August. Loan turnover growth was most affected by large-scale real estate transactions and the issuance of study loans accompanying the start of a new academic year. However, demand for study loans was weaker than in earlier years: new loans were issued in the amount of 141 million kroons, which is 28% less on 2009.

The increase in lending activity is more stable in the housing loan market, where the stock of loans issued in September (610 million kroons) was the largest in the past year and a half. The average interest rate on housing loans decreased to 3.3% in September, pointing to a slight decline in margins against the backdrop of increasing Euribor. The average interest rate on long-term corporate loans dipped to 3.6%, caused by the larger share of loans with a lower risk margin.

The stock of overdue loans declined in September. The volume of loans overdue by more than 60 days decreased by more than 900 million kroons in a month, making up 7% of the loan portfolio. Companies were more successful in improving the quality of their debt liabilities, whereas the share of housing loans with longer-term repayment delays continued to stand at 4.6% of the loan portfolio. With customers’ repayment problems withdrawing, banks have started to decrease their reserves created to cover possible loan losses. At end-September, the stock of provisions stood at 5.5% of the loan portfolio.

Banks’ third-quarter net profit amounted to 754 million kroons. Net write-downs of loans in the third quarter made up 276 million kroons, which is three times less than in the second quarter and made a considerable contribution to banks’ profitability. In addition to declining write-downs, profitability growth was also supported by an increase in net interest income and saving on administrative expenses.

Household and corporate deposits grew by 1.2 billion kroons in September, totalling 112.4 billion kroons by the end of the month. Corporate deposits, which have displayed faster growth, are 7% larger than at the start of the year. The growth pace of household deposits has been more modest, but it is still positive year-on-year.

As from December 2009, Eesti Pank starts publishing the charts “Aggregated balance sheet of monetary financial institutions” and “Analytical accounts of monetary financial institutions” which have been prepared according to ECB’s methodology. In Estonia, monetary financial institutions include Eesti Pank, credit institutions, saving and loan associations and money market funds. As a result, the charts “Analytical accounts of the banking sector” and “Money supply” will no longer be published. Money supply indicators, which used to be published in a separate chart, are now included among the analytical accounts of monetary financial institutions. The objective of the change is to improve the comparability of our data with the monetary financial institutions statistics of other EU countries.


Figure 1. Monthly change and annual growth of household and corporate loans and leases


Figure 2. Share of loans overdue by more than 60 days in the portfolio


Figure 3. Quarterly write-downs of loans and net result of the banking sector

Financial sector statistics and its publication calendar are available on the web site of Eesti Pank at www.bankofestonia.info/pub/en/dokumendid/statistika/pangandusstatistika/tabelid/.

Source: Bank of Estonia (see one more graph on that page)

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