Kalev makes production of baked goods and flour confectionery products more efficient

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