“Klaipedos Mediena” Signed Joint Investment Agreement with IKEA

“Klaipedos Mediena” (Klaipeda Timber) owned by the West Lithuanian Industry and Finance Corporation signed a joint investment agreement with Swedish IKEA for the construction of a furniture factory in Klaipeda and letters of intent for another two furniture factories, one of which will be built in Kazlu Ruda (in Central Lithuania) and another in Kaliningrad. It is planned that total joint investment in these furniture factories will be about USD 18 million and 75% of it will come from IKEA . All the three furniture factories will be controlled by the West Lithuanian Industry and Finance Corporation. The new furniture factory in Klaipeda “Klaipedos Medienos Baldai”, the construction of which will cost about USD 4.5 million, will start operations next summer. IKEA has pledged to purchase the furniture produced by the factory at fixed prices for the period of at least 5 years. State-of-the-art technological equipment will be supplied by the German company “Homag”. Operations of the other two factories in Kazlu Ruda and Kaliningrad are planned for the autumn of 2002 and beginning of 2003, respectively. “The contract with IKEA is proof that “Klaipėdos Mediena” is considered to be a reliable partner and proof that we have chosen the right way in modernising the production process, so that our furniture meets world standards”, said Sigitas Paulauskas, President of “Klaipedos Mediena”. Privatised in 1992 “Klaipėdos Mediena” is now the biggest producer of finished chip board and plywood in Lithuania, exporting about 85% of its products to the USA, Great Britain, Germany, France and other West European countries.