The Baltic Course  

Lithuanians capture the market fed up with wars

By Zydrunas Damauskas, Lietuvos Rytas, special report from Republic of Serbia and Herzegovina

Following the Kaunas UBIG company from many Lithuanian businessmen settle into Bosnia and Hercogovina.

Photo: Z. Damauskas

Factory Birac’ opening ceremony: director R. Jankauskas (on the right)

shares a bottle of champagne with Respublica Serbska’s Prime Minister

D. Mikelevich, the main UBIG owner V.Romanovas and county Bishop Vasilij.


Lithuanian shakotis on the Balkans

In Bosnia and Herzegovina exhausted by war, Lithuanian businessmen won a great victory, i.e. they helped to start running local clay (alumina) factory Birac, which is next to the city of Zvornik. The factory is administered by the staff from Kaunas Ukio banko investicine grupe (UBIG). The opening of the Birac factory aroused immense interest not only within the local community but also in Serbian government, as well as within the district’s high orthodox circles.

Among the guests there have been Serbian Parliament and Government chairmen Dragan Kalinich and Dragan Mikelevich, as well as Tuzla and Zvornik districts’ bishop Vasilij. On this occasion, Lithuanians brought for local inhabitants gathered for the celebration due to the opening of the factory their shakotis (traditional dish) and biscuits. Serbians repaid with national dances. UBIG has acquired at present alumina factory shares, as well as shares of 10 other companies of Bosnia and Herzegovina.

According to the member of the UBIG board Vladimiras Romanovas, UBIG invested in this Balkan country already about 15 million US dollars. In Bosnia and Herzegovina UBIG holds from 12 to 22% of shares in companies which are engaged in production of food products, bear, bauxite mining, metal recycling, as well as shares in the company Telekom Srpska and in the hotel Palas. UBIG holds 51% shares of the Balkan Investment Bank that operates in this region. UBIG’s owns 63% shares in Birac. 

All these enterprises are mostly situated in Respublica Serbska, where the population consists mainly of Serbians. Bosnian Muslims live in the other part of the country. “We took the advantage of the situation when the state released investment checks in the national market. The second governmental phase will be the sale of state assets in various enterprises. If we can get hold of them, we will take part in their administration and management,” said V. Romanovas. He also added that conclusive role in a successful introduction into the orthodox Serbian Republic played the simple fact that he himself was Orthodox Christian. Otherwise in a completely foreign country he would not enjoy a loyal attitude.

Celebration for Zvornik inhabitants 

In the country, which formerly was part of Yugoslavian Federation, the rate of unemployment reaches 40% (average salary is about 247 US dollars). Thus, putting the factory Birac in motion was a great celebration for Zvornik inhabitants. About 1.2 thousand people are working in the factory. Lithuanians have promised them good salaries. When two years ago Lithuanian businessmen bought the factory, it was a dead place, e.g. the technologies used were outdated and too expensive, and the administration of the factory was poor too. During the last two years UBIG formed Birac working capital.

Clay-alumina is the main raw material used for aluminium production. The world market dictates the prices on this raw material, as it is a commodity exchange item. In 2004 Birac plan to produce 300 thousand tons of alumina soil. Forty Lithuanians from UBIG permanently work in Bosnia and Herzegovina.

For Lithuanians who came to work in the country it was hard to get accustomed to the circumstances where civil war had ended just 8 years ago. The consequences of the war are still evident: many damaged houses and buildings are “marked with bullets”. Local inhabitants advise not to go far from the roads or in the forests, as there are yet plenty of land mines. People also acknowledge that in every house guns are hided – “just in case”. While talking to local people, it was obvious that many of them would like to leave the country. However, this option is very hard for them to realize, as in Western countries the warriors from the former Federation of Yugoslavia are considered dangerous.

Other companies follow UBIG’s example

Following businessmen from Kaunas, other Lithuanian companies are also settling down in Bosnia and Herzegovina. Thus, company Kraitene from Marijampole is importing there ice cream. Managers of Lithuanian company Dujotekana which also participated at the factory’s opening ceremony, deal with Russian natural gas import. Recently this company has become UBIG’s partner.

Another Lithuanian company Dujotekana obtained shares in 4 local companies, connected with UBIG, as well as 10% shares in the local bank Ukio bankas. As Dujotekana`s general manager Raimundas Palukas confirmed, their company has been searching possibilities to supply gas for Birac, which presently uses crude oil products. Together with the Russian company Gazeksport four versions have been considered for gas supply. According to R. Palukas, it will be a lengthy process, since both the factory and Bosnia and Herzegovina were listed as debtors to Russian gas suppliers for a long period of time.