If you have a look at the last year turnover level before the excise duty was paid, the drop was 24% by volume.

Last year both levels of profit and company turnover decreased. However, such decrease had been forecasted in prior, thus AS “Latvijas balzams” evaluates its performance approvingly. Moreover, if we compare last year results with other companies in the industry, and taking into account that AS “Latvijas balzams” is a production plant with substantial and fixed expenses, we assume that the achieved result is good in current market environment.

According to AS “Latvijas balzams” observations the company turnover continues to decrease at the domestic market because of total alcohol sales volume decrease in Latvia.

Due to export volume increase by 23,4%, AS “Latvijas balzams” states that the total turnover growth is going to be 4.2 % and profit growth - 7,4%.

Such growth should make a positive impression on total sales volumes.

Estimating by-past quarter it’s necessary to tell, that prior planned growth wasn’t fulfilled, because the situation at the most nearest export market wasn’t so splendid. At the same time, if we have a look at the year in total, AS “Latvijas balzams” has reasonable ground for optimism, that’s why we think that the capacity rate objectives set in the beginning of this year will be achieved.

Last year the total volume of AS “Latvijas balzams” produced export products including S.P.I. Group orders constituted 65%. Conversely, if we have a look at company’s trademark product export, it constituted 28% from the total volume. In 2009 AS ‘Latvijas balzams” started exporting to the markets of Morocco and Slovakia, but currently we are going to open new export markets in Hungary, Bulgaria and Guatemala. 

It’s planned in 2010 that the total proportion of export could be increased by 8%, reaching 73% of total sales volumes.

AS “Latvijas balzams” produces beverages of own trademarks, as well as fulfill orders for other customers. The most popular are brandy-like beverages; their basic market is the Baltic States and Poland. Vodkas are also in great demand; the majority is sold in Poland and the Baltic states as well. Sparkling wine is also popular; its export markets are the Baltic States and partly Russia. And the biggest sales market for “Riga black balsam” is Russia.  

All the same time the interest of AS “Latvijas balzams” for private label trademark market segment is growing, because the increase of export volumes is counted largely with operations in this sector.  Activities in this sector, first of all, can increase rapidly the export volumes, and, secondly, to get through hard times at the local market.

This year AS “Latvijas balzams” plans to launch new products to the market in both strong and light alcoholic beverages. It’s planned that in total there are going to be up to 10 different new products.

AS “Latvijas balzams” is going to make investments in amount of 1,9 million lats. The biggest investment projects of this year are the construction of a new material warehouse, investments in production technology improvements, particularly, the updating of bottling equipment. The substantial investments are provided for replacement of Enterprise Resource Management System.