Latest industrial legends of the Baltic States declare bankrupt

Последние промышленные легенды Прибалтики объявляют банкротами

In Latvia declared insolvent famous cosmetic firm Dzintars. The legendary brand of the Soviet era mired in debt and lost markets. Bankruptcy Dzintars is a new phenomenon in the economic life of the Baltic States. Begin to close the flagship of light industry, which the ruling nationalists are not attributed to “Soviet monsters”, and called “fit into the market.” Now deindustrialization came up to them.

Problems in the enterprise Dzintars is a lot of years. The path to bankruptcy representatives of the company count since 2008, when the global financial crisis fell sharply sales volumes and decreased traditional markets of cosmetics.

No sooner had the plant to recover from this crisis, as it covered the sanctions crisis of 2014 in Russia. Post-Soviet countries — the main Latvian buyer of perfumery and cosmetics. Perfume and cream Baltic republics on the Eastern markets promoted nostalgia for the Soviet era, as “Dzintars” was an iconic brand of the Soviet era.

It seemed that formed in the USSR, the attractiveness of the brand will be the eternal guarantor of keeping the company afloat and keep GUAM from bankruptcy.

The image of a bottle of GUAM in the minds of its buyers age was inextricably linked to a positive image of the Soviet Baltic. The very refined, understated, always fashionable among the intelligentsia and generally pleasant in all respects.

This positive perception of the Soviet Baltic States has created a market advantage of the products that brought pleasant memories.Including why local light industry for the most part escaped de-industrialization and remained as a single cluster. Fabric, cosmetics, food and jewellery from Estonia, Latvia and Lithuania in the former a single part of the land bought of habit, and because the same Dzintars was not considered to be an inevitable victim of de-industrialization, as some of the Liepaja metallurgical plant.

As it turned out, in vain.

Paradowski court of Riga on November 12 issued a decision on insolvency Dzintars, in other words, declared the famous cosmetic factory bankrupt.To date, the total amount of debt of the company is 11.4 million dollars. The turnover of the company just over 6 million euros. To pay off the loan Dzintars is no longer able. Attempts to restructure debt, is to persuade the creditors to wait to sell the old production halls and so on were not successful.

Representatives of the cosmetics company convince the public that a Declaration of insolvency does not mean the closure of the facility, and GUAM to bury too early.

“In any case, Dzintars does not disappear, because the brand and all the patents as intangible property owned by [the factory owner] Ilya Gerchikov,” says Board member, Dagnija t-Shirt.

“I want as many people as possible know about it. We will be sure to produce Dzintars continue, and keep all the main line,” says Ilya Gerchikov.Latvians these statements have not especially comforting. “Liepaja Metallurgist” too, a few years took up life after bankruptcy filing, but ultimately the property of the plant last year was sold under the hammer.

Until this is way past hundreds of other industrial enterprises in the Baltic States.Bankruptcy, stop production, unpaid leave of employees, sale of parts, debris and scrap. And on paper some of the industrial giants of the Baltic States still exist. Just who was last seen new products WEF or “Radio”?

The rulers of Lithuania, Latvia and Estonia was not sorry for these factories. According to their ideology, it was “Soviet monsters”: bulky, energy-intensive, environmentally harmful and incapable of surviving in market conditions. Their elimination has become the natural rehabilitation of the market — process of the same type that the extinction of the dinosaurs. Small, nimble, adaptable survived, large and clumsy dropped out.

Light industry was just called as an example that even in the Baltic States industrial enterprise not destined to disappear. Adapted to the new conditions, has proved its effectiveness and now bring profit to the budget.

Bankruptcy Dzintars is a terrible sign that now the Baltic wave of de-industrialization has come to light industries.Who will be next in line for the Declaration of insolvency? Confectionery factory “Laima”? “Riga black balsam”? Dairy enterprises, a few years surviving in a war of sanctions with Russia? Ultimately, the order is not important.

It is important to emphasize the failure of the myth of the “success” of the market economy of the Baltic countries. And there was no “recovery” of the economy, closure of unprofitable enterprises. There is no “recovery”, comes the drying, compression and degeneration of the economy of the Baltic States as such, with the result that the most famous Baltic brands go down in history.
Aleksandr Nosovich

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