Management report
Field of activity
The enterprise was founded in 1900, but the actual name it has got in 1970. AS “Latvijas balzams” is a leading producer of alcoholic beverages in the Baltic States producing more than 130 different kinds of alcoholic drinks. AS “Latvijas balzams” major shareholder is “SPI Regional Business Unit BV”, having 89.53% of the company’s equity capital.
Results of the business in year 2010
AS “Latvijas balzams” is the biggest producer of alcoholic beverages in the Baltic States as well as one of the largest taxpayers in Latvia. In 2010 AS “Latvijas balzams” paid 34.7 millions lats to the state budget, including excise tax amounting to 25.8 million lats.
The unaudited turnover of the company in 2010 was 74.9 million lats, which is 9% less than in 2009. The decrease in turnover on the local market was 14%, export market 18% while export related to S.P.I. Group orders increased by 2% in comparison with previous year. In 2010 the sales to the EU countries decreased by 17% in comparison with 2009. Sales to Lithuania and Estonia decreased by 24% and 5% accordingly. Decrease of sales is related to the increase of excise tax, decline in consumption on the domestic market while economy is growing only because of export and consumer spending is low, increase of illegal alcohol trade and uncertain economical situation in the main export markets. In 2010 the top focus sales markets were Baltic States, Russia, Poland and Scandinavia; meanwhile new export markets such as Bulgaria, China, Australia and Kazakhstan were being acquired.
The Company has paid great attention to production cost control and improvement of productivity, as a result reaching 3 640 thousands lats unaudited profit, that is 2% more than in 2009, despite the 9% decrease in turnover.
Future business prospects
The economic situation in country has started to stabilize, however, purchasing power of consumers is still very low, therefore company aims to hold existing market share as well as to continue export business development by improving existing products portfolio. In 2011 AS “Latvijas balzams” priorities will be control of production and logistics costs, optimization and increase of production effectiveness, enhancement of company’s competitiveness. AS “Latvijas balzams” will continue to support solutions that are environmentally friendly, persistently improving activities that would reduce company’s business negative influence on the nature by setting high requirements for ourselves and collaboration partners.
AS Latvijas balzams
Chairman of the Board Karlis Andersons
Riga, 28 February, 2011
