On  August  19,  2001  JSC  Supervisory  and  Management Boards

resolved  to  transfer  the  dividend  payment  date  from August 16 to

October 21.

Last  year  Company  worked  at  a  profit,  and it was resolved to pay

dividends  LVL  0.03  per  share.  According to the projections made in

spring,  Company  should  have  sufficient  cash in August for dividend

payment.  However,  unforeseen  changes  in  the  market  situation - a

shrinking  input  market,  changes  in  the market demand structure and

reorientation  to new markets - tied up the cash invested in production

and  led to deviations from the projected cash flow in August.  Company

management was compelled to postpone the dividend payment date.

The factors that caused the delay with dividend payments are:

1. Input suppliers have changed their payment policies: they require to

pay  versus  delivery,  or  even  pre-payment  (as opposed to 30-40 day

credit last year)

2.  Market  diversification strategy implemented by "Kaija" envisages a

shift  from  the  Russian  market  (currently  representing only 20% of

exports)  to East European markets (Czech Republic, Slovakia, Hungary),

which  are  more  attractive  owing to higher returns, and involve less

economic  and  social  risks.  However, to enter the markets, we had to

accept the terms of payment (45 to 60 days) dictated by the supermarket

chains.

3. The traditional markets in Russia and the CIS countries are stagnant

instead of the anticipated growth.

In  this  situation  "Kaija" management opted for investing in business

and  to  postpone dividend payment to a later date, which we believe to

be in the best interest of shareholders and the company.

August 21, 2002 

16.35.