Market announcement
Luterma
Category
Other price sensitive information
Date
30.01.2008 14:15:21
Title
Kalev makes production of baked goods and flour confectionery products more efficient
Message
In late 2007, Kalev Chocolate Factory AS launched a transition to product-group-based production as a result of which baked goods and flour confectionery products will be manufactured in different production units. The goal of the specialization process is to increase logistical and production efficiency. According to member of the management board of Kalev Chocolate Factory, Mait Nilson, by raising efficiency, the firm is aiming to curb rising production costs stemming from the rise in the price of raw ingredients last year. “In addition to halting the rise in production costs, the change also has the objective of concentrating know-how into one production unit. We would like to activate the product development process, which is of paramount importance for operating in this field,” said Nilson. Nilson said the first stage of the specialization process will encompass the consolidation of baked goods production at AS Kalev Jõhvi Tootmine's Kiviõli production units. This will be accompanied by a launch of a new line of baked confectionery products in new, modern flow packaging in early February, which will allow productivity in the given group to be increased to a noteworthy degree. Kalev Chocolate Factory's market share of turnover in the baked goods segment has grown to 11.3 per cent over the year, on the strength of which the company rose to the second position in the survey conducted by AC Nielsen in October-November 2007. In the second stage of the process, baked goods production will be transitioned in full to the Jõhvi unit. Part of the workforce freed up as a result of the first stage of the process will be transferred there. The baked goods group includes breads (both dark and light) marketed under the Kalevipoeg, Linda and Sakala trademarks; and the cakes, pastries and small rolls marketed under the Linda trademark. Flour confectionery production, which encompasses the cakes under the Linda trademark as well as Kalev cakes, will be concentrated in the production units of AS Vilma in Viljandi. The sales figures for the latter units have increased by over 30 and 60 per cent, respectively, in a year. Production of flour mixes, which is showing a strong growth trend, will also remain at Vilma. The specialization process is planned to be implemented by the start of the second quarter. From that point on, both production units will shrink by an estimated twenty employees. Founded in 2006, AS Kalev Chocolate Factory's primary activity is the production of chocolate confectionery and sugar confectionery products and sales of chocolate, sugar and flour confectionery products and baked goods. Most Kalev Chocolate Factory products are sold on the Estonian market. The primary foreign markets are the Baltic States and Scandinavia, with Russia also having a share. Allan Viirma Head of the legal service 616 1916