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MERKO signed EUR 90 million worth of contracts in the first nine months of the year

Merko Statyba UAB signed EUR 90 million worth of contracts in the first three quarters of this year.  This is 56% more than in the same period last year, when the amount of such contracts was EUR 40 million.

Merko statyba’s three-quarter turnover from general contracting this year amounted to EUR 43 million, compared to EUR 26 million last year.

The contract projects include production facilities, residential apartment blocks and wind farms

The first contract projects to start this year are already well underway: UAB Continental Automotive Lithuania’s production building in Kaunas district, UAB Tokvila’s car service centre in Vilnius.

„We once again are pleased that our clients value us as a reliable construction partner and invite us to implement various projects – both production buildings and other objects. The growth of the portfolio of contract works is also due to the reality of today’s search for alternative energy sources – wind farms,“ said Saulius Putrimas, CEO of UAB Merko statyba.

Six such projects have been agreed this year. Four contracts to build wind farms were signed in the third quarter alone.The company is completing the renovation of the barracks building in Kaunas (commissioned by the NATO Support and Procurement Agency (NSPA)), and the construction of the building of the Kaunas County Chief Police Commissioner’s Office. It will be the first A++ administrative building in Lithuania to receive almost all of its operational energy from renewable energy sources.

Among these tasks, we should also mention MERKO’s own projects, such as the Vilnelės Skverai residential apartment complex, which is being built in Vilnius, between the Old Town, Užupis and Belmontas. The construction of the first stage of the project is almost completed and the sale of apartments in the third stage housing has started.

In the first three quarters of 2021, MERKO signed 201 preliminary contracts for the sale and purchase of apartments. The situation was similar last year, with 193 apartments sold under preliminary contracts in the first nine months of the year.

Challenges for the sector: Rising prices of raw materials and energy resources

„The situation in the construction sector remains particularly challenging due to rapidly rising prices of construction materials, disruptions and delays in the global supply chain of materials, and a shortage of skilled labour. This has particularly affected projects that were agreed last year, when no one expected such sudden and dramatic changes.

Despite these difficult conditions, the company did not terminate any general contracting contracts, did not revise the agreed prices, and we are confident that we will be able to implement all the projects – both Merko’s development and contracting projects“, said the Head of UAB Merko Statyba.

According to the him, 2022 will also be a difficult year for the construction sector, not only in Lithuania but also in other countries. The coronavirus pandemic is not over yet, in addition to rising energy and raw material prices, inflation, other economic factors – all this will affect the construction sector as well.

“Therefore, the importance of a reliable, experienced and financially capable general contractor has increased in these uncertain times. Pre-contract negotiations on an equal footing, based on a realistic assessment of the situation and not just on the lowest price criterion, can ensure a mutually beneficial partnership and a guarantee that the contractor will not raise the price, will not go bankrupt and will not leave the project unfinished,“ commented S. Putrimas.

AS Merko Ehitus (group.merko.ee) group consists of AS Merko Ehitus Eesti in Estonia, SIA Merks in Latvia, UAB Merko Statyba in Lithuania and Peritus Entreprenør AS in Norway. Besides providing construction service as a general contractor, the group’s other major area of activity is apartment development. As at the end of 2020, the group employed 666 people, and the group’s revenue for 2020 was EUR 316 million.