BONJOUR L'ESTONIE

Newcomer poaches tens of employees from Estonia’s largest IT company

Priit Alamäe, CEO of Estonia’s largest IT company Nortal, said he had a real shock recently when he found out that Nortal recently lost a contract to a company that included some of Nortal’s former and current employees, writes Äripäev.

Alamäe said that at the time when the competing bidder by the name of Iglu made its bid some of the employees listed by Iglu as service providers were still working for Nortal.

“I don’t want even to talk about it, it’s like washing dirty laundry in public,” said Alamäe. “It’s so personal and nasty. One day you trust people, on the next they stab you in the back,” he added. Äripäev has learned that a large number of employees have left or are leaving Nortal. It was claimed that the company was laying off the whole personnel department.

According to Alamäe, three employees of the personnel department have left the company, but said that it was a consequence and not a cause. Speaking of the exodus, Alamäe said that Nortal has been losing middle managers also before, but this time some of Nortal’s IT people were participating in a competing tender at the time when they were still employed by Nortal.

Accordign to Alamäe, Iglu has been poaching Nortal’s employees and has also offered its services to Nortal’s customers. Alamäe says that Iglu has approached about 30 employees of Nortal, most of whom are now employed by Iglu.

In the last few months, Nortal has lost about 40 employees, most of them to Iglu. Iglu Ltd belongs to Mart Nõmper, attorney at law of law firm Rödl  & Partner. One of the company’s board member is Kaarel Kuddu who is a former employees of Nortal and left the company in January.

Nõmper refused to comment the relations between Iglu and its customers, referring to confidentiality agreements. He did not say whether Iglu has participated in tenders by offering services of employees who were still employed by Nortal. Nõmper said that he had no information that Iglu has been using people who are being employed by Nortal.

“You have to ask Nortal about it, I don’t have such information,” said Nõmper.

Toomas Hõbemägi

Estonian Air rents one aircraft to new Lithuanian airline

Estonian Air signed an agreement to rent one Embraer aircraft to Air Lituanica, the recently founded Lithuanian national carrier, until the end of 2015.

The two airlines also plan to cooperate on the commercial side of the industry, including ticket sales and transfers, the Estonian state-owned company said in a press release today.

The 76-seat Embraer 170, along with another Embraer Air Lituanica has leased, will increase the number of flights from Vilnius to Brussels, Amsterdam, Berlin, Moscow, Prague and Munich.

The maiden flight for the airline will take place on June 30, just one day before Lithuania takes over the rotating Presidency of the Council of the European Union for six months.

According to Estonian Air, the new company will grow to four or five aircraft after three years, to service between 10 and 12 lines.

European Commission recommends car tax for Estonia

Estonia has again dismissed a recommendation from the European Commission that the country should introduce a car tax and/or higher excise duties on motor fuels, as an environmental incentive to improve energy efficiency.

Instead, according the Finance Ministry, the government intends to remain focused on existing measures, such as an electric car programme. When the EC recommended a vehicle tax last year, Finance Minister Jürgen Ligi told the media that the government did not want to put extra burdens on car owners, and that to do so would be "regionally painful."

The EC's recommendation was published in a document responding to Estonia's 2013 stability programme for the period 2012-17 and the country's 2013 national reform programme. It forms one of five country specific recommendations (CSRs) in relation to the EC's Europe 2020 strategy for growth and jobs.

The EC notes that Estonia has made some progress in meeting CSRs for 2012, in particular by limiting the budget deficit to 0.3 percent of GDP, but that some reforms efforts "appear insufficient." As well as introducing the tax, the EC recommends implementing the structural budget balance rule in the Treaty on Stability, Coordination and Governance, complemented by more binding expenditure targets; better-targeted labor market policies; making education and training more relevant to the labor market; and local government reform to ensure that the whole population has access to services such as child care, family support services, healthcare, education, and transport.

Ulrika Lomas

No thanks, Estonia

At any given moment, 20 million people are video chatting with friends and relatives in distant lands. Skype, the ingenious software that makes this possible, was developed in Estonia, a tiny nation in northern Europe, hard on the Baltic Sea.

Ocean-going tribes, sometimes called “pagan raiders,” have lived in Estonia for thousands of years. During World War II, Estonia was invaded, first by the Soviet Union and then by Nazi Germany, before being overrun again by the Soviets at the end of the war. The country did not regain its independence until 1991.

Today, Estonians boast of having the world’s first “digital democracy” — Internet voting — and the lowest debt levels in Europe. It is said that a person can open a laptop in an Estonian forest and have faster download speeds than are available in most American living rooms.

Although Estonians revel in their newfound freedom, their society remains captive to a Stone Age energy system, one based on primitive and polluting technologies that it hopes to export to the United States. Estonia has no oil, coal or natural gas; what it does have is the world’s richest deposits of oil shale, stubborn rocks that only surrender their hydrocarbons if heated to 900 degrees.

Estonians burn oil shale in enormous power plants as if it were coal. They bake millions of tons each year in large ovens, or retorts, to produce fuel for ships. At one time, they used oil shale to power their locomotives.

Estonian Air wins court battle with Bombardier

Canada’s Ontario Supreme Court has ruled in favour of Estonian Air in the airline’s dispute with Canadian aircraft manufacturer Bombardier, writes Postimees.

Estonian Air’s CEO Jan Palmer confirmed that the court case was over and that the court ruled in favour if Estonian Air. Palmer was unable to say how much the court case cost the airline.

The company has not announced the compensation amount that Bombardier had been demanding from the Estonian state and Estonian Air for cancelling its order to new aircraft. It is known that Estonian Air paid Brazilian aircraft manufacturer Embraer around EUR 8m for cancelling its order to buy two aircraft.

Estonian Air and Bombardier made an agreement in 2011 that Estonian Air will buy five new Bombardier aircraft CRJ900. The transaction was financed by the Canadian export credit agency.

When Estonian Air cancelled the aircraft purchase agreement with Bombardier, the Canadian company claimed that the Estonian government had interfered in the decision-making process of Estonian Air and had forced the airline to cancel its agreement with Bombardier so that it could buy five Embraer aircraft.

Embraer delivered three planes to Estonian Air, but the order for two was cancelled when the state changed the strategy of Estonian Air and the airline no longer needed so many planes.

Sales manager of Bombardier, Robert Baseggio, claimed that he was informed by Estonian Air CEO Tero Taskila that Embraer was lobbying the Estonian government to buy aircraft from Embraer instead of Bombardier. The Canadian supreme court ruled that there was no evidence that the Estonian state had influenced the decision of Estonian Air.

Estonian milk production posted a new record in March

Estonia fulfilled 95.96% of the milk production quota that was allocated it in the quota year that ended with March as the dairy herds of 901 quota holders produced nearly 658,400 tonnes of milk, LETA/Public Broadcasting reports.

The results posted are a record in both the amount of milk and quota fulfilment percentage. The milk quota year lasted from April 1 last year to March 31 this year, the Agricultural Registries and Information Board (PRIA) reported.

The European Commission quota for Estonia was 686,000 tonnes for this period. Out of this, 672,000 tonnes had been distributed to quota holders based on their applications.

Although the number of quota holders fell in a year by 60, the amount of milk they produced was by around 22,000 tonnes bigger than in the preceding quota year.

In the new quota year that started on April 1 this year, the European Commission set Estonia's milk quota at 692,926,049 kg. At the start of the 2013/2014 quota year, there were 856 milk quota holders.

A large part of vegetables imported to Estonia comes from Latvia

Over 30,000 tonnes or 22.3 million euro worth of vegetables was imported to Estonia in 2012, a large part of it from Latvia, LETA/Maaleht Online reports.

10,800 tonnes of tomatoes, that have the biggest share in the import of vegetables (35.6%) was imported to Estonia in 2012, most of it from Holland (51.6%), Latvia (20.2%) and Spain (9.1%).

4,400 tonnes of cucumbers was imported, by 22% more than in 2011. Most of the cucumbers came from Latvia (25.0%), Germany (18.8%) and Poland (16.8%).

Over a third of imported vegetables is formed by salad, of which 1,200 tonnes was imported, by 155 tonnes more than in 2011. Most of the salad came from Holland (36.6%), Finland (24.5%) and Latvia (14.5%).

Onions were imported mostly from Holland (31.2%), Poland (24.3%) and Latvia (23%).

4,700 tonnes of cabbage was imported, by nearly a fifth less than last year. Cabbage formed 15.6% of imported vegetables. Most of the cabbage came from Latvia (54.8%), Poland (12.9%) and Holland (12.2%).

2,400 tonnes of root crops were imported in 2012, most of it from Latvia (31.5%), Holland (18.4%) and Poland (16.8%). 1,800 tonnes of potatoes was imported, most of it from Latvia (27.6%), Finland (27.8%) and Holland (17.3%).

Lithuania shows interest in Estonian Air

With Lithuania's presidency of the Council of the European Union drawing closer, Estonian Air could play a role in providing Vilnius with more direct flights.

The Lithuanian government has expressed an interest in short or long-term cooperation with Estonia's national airline, but the Estonian minister of economy, Juhan Parts, said it is too early to predict if that interest will materialize.

Lithuania's own carrier, FlyLAL, grounded its fleet four years ago, and the nation's cabinet is looking for ways to increase the number of direct flights to and from Vilnius. Lithuania's presidency of the Council of the European Union begins in July of this year. The government says the current lack of flights is a problem.

Parts concurred that Estonian Air is flexible enough and has the resources to lend Lithuania a hand. A common Baltic airline is a long-standing idea, but has not been accomplished and is highly unlikely to manifest, said Toomas Peterson, an ex-CEO of Estonian Air.

“Estonian Air currently has big problems and Air Baltic is likewise fighting Brussels, and if we were to join these troubled companies into one, that synergy would not be an advantage,” said Peterson.

Lee Cooper eyes expansion into Estonia and Lithuania

Global denim brand seals new partnership with Poldma Trading to move into markets.Popular denim brand Lee Cooper has signed up Poldma Trading as its new Estonian licensee.

The deal means that the brand will now expand across both the Estonian and Lithianian markets. An introductory Lee Cooper collection will debut for autumn/winter 2013, followed by a full line for spring/summer 2014.

Initially, Lee Cooper will be exclusively available through Poldma Trading's 25 multi-brand Dream Denim stores, located across Estonia, Latvia and Lithuania. Further retail expansion is expected to follow.

"We are very excited about the future prospects for growth in the Baltic markets and this reflects the increasingly strong position of Lee Cooper across the markets, from the Baltics down through Central and Eastern Europe, all the way to the Mediterranean markets," said Andy Dunkley, CEO of Lee Cooper.

Samantha Loveday

Estonian Air passenger number down 25% in a year

National carrier Estonian Air said it carried 168,206 passengers in the first four months of 2013, which is 25.2 percent less than during the same period a year ago.

In the first four months of 2011, the airline carried 224,801 passengers and in the year before that 168,583 passengers.

In April there were 46,513 passengers, down from 85,644 passengers a year earlier and 48,427 passengers in April 2011.

Rauno Parras, chief operations officer of Estonian Air, said it makes more sense to compare this year's passenger numbers with the pre-enlargement year 2011. "The results for the first quarter and April are in the line with the restructuring plan targets set at the beginning of the year," said Parras.

Estonian Air operated 3,800 flights in January-April, of them 950 in April.
Estonian Air embarked on an extensive downscaling of its operational volumes in January, aiming to focus on serving the Estonian market with a core network of routes for which there is solid fundamental demand. The Estonian government approved the restructuring plan on May 2, 2013.

Estonian Air flies to Stockholm, Copenhagen, Amsterdam, Brussels, Oslo, Moscow, St. Petersburg, Kiev, Vilnius and Trondheim. In addition, Estonian Air will fly between Tallinn and Paris from June to August, and to Nice from May to September.

Government supports Estonian Air with 40.7 mln euros

The council of Estonian national carrier Estonian Air submitted on Thursday to the government the company's restructuring plan, which prescribes recapitalisation of the company with 40.7 million euros, which is less than estimated initially, informs LETA.

By now the company has received from the state a bit more than 25 million euros. The government decided today to allocate the company 12.1 million euros more which means a total of a bit less than 38 million euros, explained Estonian Air's council chairman Erkki Raasuke.

In the near future, economy minister Juhan Parts will submit a restructuring plan to the European Commission that prescribes recapitalisation of the company with 40.7 million euros. If the Commission grants permission for state aid, the loans will be redesigned into equity capital, of which the company will return to the state emergency aid loans and interests.

The plan to be submitted to the Commission will reduce the company to a level where it is strong enough to service destinations vital for Estonian people but the company will be financially independent.

It was estimated earlier that it will take 50-70 mln euros to support the company.

Eesti Pank issues the new 5-euro banknote into circulation

Estonian central bank Eesti Pank announced that it started releasing the new, second series five-euro banknote to orders from the commercial banks today, reports LETA.

They will then enter into circulation through banks, cash machines, retailers and the other standard channels.

At the same time Eesti Pank will continue releasing new five-euro banknotes of the first series until stocks run out. This means that the new five-euro banknotes will enter circulation only gradually. All the central banks of the euro area are following the same procedure.

Banknotes of the first series will continue to be valid for payment, and there is no limit on when they can be exchanged at the central bank. They will gradually be withdrawn from circulation and at some point they will cease to be legal tender. An announcement will be made well in advance.

The five-euro notes have some new and enhanced security features. The new note also features short raised lines on the right and left edges of the banknote, which will be particularly useful for the visually impaired.

The overall design of the new banknotes is the same as for the first series, continuing the theme of 'ages and styles' and with the same dominant colours. The five-euro note is grey and features the classical style of architecture.

Government approves state budget strategy for 2014–2017

The Government has approved the state budget strategy for the years 2014–2017 as well as the stability programme. During the next four years the Government will continue with a conservative budget policy, aiming to achieve a government sector budget surplus and to start restoring the reserves that decreased during the economic crisis.

According to predictions, the revenues in the state budget will increase in all four years compared to the last state budget strategy. The growth will result from increased tax revenues due to an improved economic situation and the predicted receipt of external funds.

The predicted total expenditure for the four-year period is 33 billion euros. This is 2.4 billion euros, or 7.9 per cent, more than the total size of the state budget strategy for the previous period. Compared to the previous state budget strategy, expenditure will increase by about five per cent annually in the 2014–2016 period.

The Baltic States are becoming a very lucrative market for investors

Against the background of struggles with offshore companies, the Baltic States are becoming a very lucrative market for investors.

Alexander Zadvornov – head of the Estonian consultancy company, CMI Solutions – remarked that: “in particular, from this year in Latvia, corporate income derived from the sales of shares is no longer subject to income tax – with the exception of offshore companies. Moreover, from next year, dividends and royalties paid by foreign companies will also be exempt.”

He also drew attention to Estonia which, given its long-standing zero-rate of taxation on profits, remains an attractive investor destination on a par with Latvia.

He continued: “Generally speaking, as a buffer zone, the Baltic States are very attractive to investors from Russia and the CIS in terms of investment protection. Their location is also advantageous for export-import operations in Europe and beyond.”

The great interest of Russian investors in the Baltic States is evidenced by the success of the Latvian programme offering residence permits to foreign investors.

Prisma Peremarket to open a new store in central Tallinn

Prisma Peremarket that belongs to Finnish SOK group has signed a contract to ope a new store in central Tallinn, writes Äripäev.

The new store will be located on the corner of Hobujaama and Ahtri street in the complex that will also include a bus terminal.
The company plans to invest about EUR 30m in the store.

Janne Lihavainen, CEO of Prisma Peremarket, says that the company has been looking for central location in Tallinn for some time and plans to start competing, among others, with the grocery unit of Tallinna Kaubamaja.

According to Lihavainen, it took about two years to sign the contract. Prisma opened its first store in Estonia in 2000. It employs more than 1,200 people in Estonia.

Toomas Hõbemägi

Tallink pays highest-ever dividends on Tallinn Stock Exchange

Estonian passenger ferry operator Tallink announced yesterday that it will pay out to shareholders almost EUR 33.5 million in dividends. This is the highest-ever dividend payment by a company listed on the Tallinn Stock Exchange, writes Äripäev.

The amount of dividends – 5 cents a share - that must first be approved by the shareholders at the general meeting of shareholders on May 14 came as a surprise for many analysts, most of whom expected the dividend to remain at 3 cents a share.

Infortar that is a holding company owned by Enn Pant, Kalev Järvelill and Ain Hanschmidt will earn EUR 12.06 million in dividends. Tallink’s largest private owner Enn Pant will in addition earn 0.4m euros in dividends.

Second largest shareholder Baltic Cruises Holding L.P will earn EUR 5.87 million.

Commenting the reasons behind the dividend proposal, Enn Pant, board member of Tallink says that last year was very good for Tallink and the first year when results were in line with expectations.

Finns spend record amount in Estonia

A recent survey commissioned by a Finnish merchants association finds that over 80 percent of Finnish tourists bought alcohol and 58 percent bought sweets while visiting in Estonia in 2012.

Last year, Finnish citizens spent 501 million euros in Estonia, a record that exceeded the 2011 figure by 8 percent, reported Finnish broadcaster YLE.

The merchants association says trips from Finland to Estonia are at a record-breaking high. Around 20 percent of southern Finns visited Estonia at least twice last year.

Half of the survey's respondents cited low prices as an important reason for undertaking the trip to Estonia. Often referred to as the 'vodka rally' by the Estonian media, nearly a quarter of all alcohol purchased locally by Finns is loaded onto vehicles and then ferried away to Finland.

Now, according to the survey, Finns have developed a sweet tooth as well, apparently due to a Finnish excise tax on sweets, ice cream and soft drinks. The association said there is a correlation between rises in the Finnish consumption tax and the volume of goods consumed in Estonia by Finns.

Estonia takes active part in exhibition TransRussia 2013

In an annual fair and conference TransRussia 2013 which takes place on April 23-26 in Moscow, Estonian presence has been especially wide this year, informed LETA, referring to the Estonian national broadcasting corporation ERR.

This year, a national stand and ten more separate stands of Estonia will be present at TransRussia.

A total of nearly 30 Estonian companies will take place in the marketplace event. This is the record number of Estonian enterprises – the participants of TransRussia – during several last years.

It is not a big surprise that the number of participants at TransRussia grows with every year, a company's BaltMarketConsult Board Member and the project TransRussia's Trustee Tatjana Eremina emphasized.

"The improvement of economic relationships between Estonia and Russia has been noted recently, and commodities' turnover between the states grows yearly. Current economic and political situation makes a good base for Estonian entrepreneurs to cooperate more with Russia's partners, the companies have more chances for attracting flows of traffic. In current situation Estonian companies have a possibility to fight for the right to handle the freight, because much depends on themselves and activities in Russia are unimaginable with participation in TransRussia. This is one of the aspects," said Eremina.

Estonian Air to change pre-flight and in-flight services from 01-May-2013

Starting from 1 May 2013, Estonian Air will introduce several changes in pre-flight and in-flight services which concern the number of fare types and selection of on-board food. From August check-in procedures will be updated.

In January 2013, Estonian Air started an extensive restructuring process to become cost efficient and competitive regional carrier providing flights to the destinations critically important for Estonia, where the demand is constantly high.

“During the first three months we have been focusing on adapting our network to the real economic demand of ten flight destinations and reducing costs in accordance to new flight capacities. Regarding this we have reviewed all the activities and cost items related to our services,” said Rauno Parras, the CCO of Estonian Air.

From 1 May 2013, Estonian Air is reducing the number of fare families from the current five to three. The three basic fare families are: Eco, Flex and Business. The Light fare family - meant for travellers with hand luggage only - will remain as a campaign product, which has a lower price but less flexible terms compared to other fare families.

On board all passengers will be offered with a common selection of food and beverages. Passengers with Business and Flex tickets are served complimentary food and beverages. Passengers holding Eco tickets can buy food and beverages on board. Estonian Air also offers a possibility to pre-order meals through Estonian Air homepage at least 36 hours before the flight. For product list, pricing and ordering please visit Estonian Air website http://estonian-air.ee/en/travel-information/during-the-flight/on-board/.

OEG: comment on building a new hotel and casino complex in Tallinn

Olympic Entertainment GroupCompany Announcement OEG: comment on building a new hotel and casino complex in TallinnFollowing the annual general meeting of shareholders of OEG that was held on 18 April 2013, some media channels published information about the plans of OEG to build a new hotel and casino complex in Tallinn on the place of the current Reval Park Hotel & Casino.

The Group's representatives confirmed that such plan is currently under development and assured the participants of the general meeting that shareholders will be notified through the stock exchange system as soon as a final decision has been made and/or necessary contracts for the implementation of this project have been signed.

OEG confirms that, as of today, no final decision has been made about the exact manner and timetable, therefore any information related to this issue that has been or will be published in the media is purely speculative and has no factual basis.

Madis Jääger - CEO
Olympic Entertainment Group AS
Tel + 372 667 1250
E-mail madis.jaager@oc.eu
http://www.olympic-casino.com