August 2008:

Nekos Oy´s Second Bakery Project in Russia

Installation of an Automated Stacking Crate Handling System in Togliatti started

Nekos Oy supplies its second plastic crate handling system to Russia to the city of Togliatti on the Volga riverbank. Thanks to the close co-operation between the customer and the supplier, all customs formalities were passed without problems, and installation of the equipment started in mid-August. Already in May representatives of the client OAO Togliattihleb, Technical director Mihail Kuzikin and Sales director Oleg Sabanchev, observed the test runs of their system at Nekos Oy’s Loimaa plant.  At the same time, these professional bakers had a possibility to visit the national trade fair for food manufacturing industry in Tampere. While exploring the trade fare attractions, they found a minute to tell us more about OAO Togliattihleb and the ongoing modernization project of the bakery.   

Founded in 1952, OAO Togliattihleb is the market leader in bakery products, as well as the largest bakery company in the Samara region. Its market share in Togliatti rises up to 80% and is considerable also in other cities of the region. In 2007 company’s annual turnover reached 700 million rubles (app. 20 million EUR).  OAO Togliattihleb continues to pursue regional growth: Mihail Kuzikin points out, that the aim is not only to increase production, but to raise market share and expand market area, as well. “Our market strategy is based on expanding our operations, and renewing the packing and dispatch functions allows us to enhance the entire logistics system”, Oleg Sabanchev adds. In addition, OAO Togliattihleb modernizes its production process within existing premises, and therefore optimizing the space utilization in the dispatch department was a crucial aspect. ” Nekos Oy succeeded in overcoming these challenges, as well,” reminds Kuzikin.

Situation on the Russian bakery market is stable: even though the amount of production in tons declines steadily 2-3% each year, the total value of the market raises at the same time.  ”The Russians eat less bread, but have higher quality demands than before. Along with the income level rise our consumers’ expectations and this is a new challenge for the bakeries to meet,” Sabanchev and Kuzikin explain the situation. As the playing field changes, OAO Togliattihleb chooses to invest in boosting their logistics chain. Improved packaging, dispatch and transport solutions will both support the chosen market strategy and contribute in meeting the higher quality demands.

A crucial part of modernizing the bakery in Togliatti is a fully automatic plastic crate handling system, supplied by Nekos Oy. The system receives used crates from delivery vans and, eventually, releases refilled crated in stacks at the dispatch department. The handling process includes:

• receiving and storing dirty crate stacks,
• washing and drying the crates individually, capacity 2000  crates per hour,
• storing clean crate stacks,
• crate filling point,
• automatic stacking of full crates.

The equipment was shipped to Togliatti in the beginning of July, installation began in August and the system will be taken in use before the end of year 2008.  

Thanks to this new system, designed and implemented by Nekos Oy, OAO Togliattihleb will be able to solve many problems within their packaging and dispatch processes. The entire dispatch department will operate more efficiently, and, respectively, delivery times all the way to the consumer will shorten noticeably. Investments in logistics system are essential part of OAO Togliattihleb’s strategy of growth and especially transition to plastic crates is a major step for the bakery.  “Using these plastic crates, we will no longer be bounded to special vans for bread transport that are traditionally used in Russia. This allows us to plan our logistics more flexibly and expand our market area,” Oleg Sabanchev describes.

Automatization of the production process is also a reaction to the major challenge that all Russian manufacturers are facing – the rapid growth of labor costs. Crate handling system will allow OAO Togliattihleb to optimize the amount of labor force in the dispatch department, thus cutting the total production costs. Mihail Kuzikin is convinced that by making the decisions for controlling the labor costs in good time, OAO Togliattihleb will gain a head start in comparison with its competitors.

In addition to costs savings, one of the determinant factors in choosing the crate handling system supplier was thoroughness of the offer.  ”Nekos Oy left its rivals behind, because it succeeded particularly well in accommodating the system within existing premises and equipment. The offer and the attached layout were prepared thoroughly, genuinely considering our needs, and that is why it caught our attention in the first place,” says Mihail Kuzikin.  Detailed approach of the offer gets positive comments also from Mr. Sabanchev, who acknowledges the importance of technical issues in selecting a supplier for a system of this scale. Reference visits to a bakery with similar system in Oulu and to Onninen Group’s headquarters in Vantaa convinced the client of the expertise and solid background of Nekos Oy. 

Mihail Kuzikin is apparently satisfied with the choice made:”I consider Nekos Oy’s system a first-class, high quality product and I am sure that the installation and commissioning of the system will proceed according to our plans, as well. We have had many possibilities to pose questions and discuss the plans with Nekos Oy’s experts, we have been given thorough answers and the supplier has been very flexible, and now I’m looking forward to the system commissioning before the end of this year.”

For Nekos Oy the project at OAO Togliattihleb opens new possibilities in the Russian market, since this entirely Russian-owned company has taken a leading position in the development of its regional bakery market.  Mihail Kuzikin also believes, that creating a well-functioning system for OAO Togliattihleb will bring upon many interested contacts for Nekos Oy – especially since for the majority of Russian bakeries this kind of renewals are merely at the stage of consideration.  ”According to the Russian proverb, the first pancake is always spoiled, but Nekos Oy is a company with long experience and through our system they can show also their potential customers in Russia that they have no unsuccessful projects,” accompanies Oleg Sabanchev.