Olvi

In 2009 the central objectives of the Olvi Group were to improve profitability while retaining the good market position and the successful takeover of the OAO Lidskoe Pivo –Brewery, situated in Grodno, Belarus, which is a new market-area for Olvi. The Group’s market position remained good. The market position was slightly even improved in beers, ciders and long drinks. In the Baltic countries and in Belarus the market position of kvass became very strong.

The Olvi Group's turnover improved by 9.9 percent to MEUR 244.2. Sales volumes increased by 22.9 percent to 419 million litres and business profit increased to MEUR 27.8 improving by MEUR 10.3. The result improved significantly, even though it included single payment -type revenue from Belarus in the amount of MEUR 3.2.  

Domestic result also improved significantly due to improved production performance and the product mix. The Baltic countries as a whole nearly reached the business profit level of the previous year, regardless of the deep recession. Belarus obtained good results even though the rouble depreciated heavily, almost by 30 percent, with respect to the euro.

Investment brought results: Olvi is a secure product supplier

The investments made in the previous years brought productive efficiency. The effect of the investments was concretely visible in that also during the busy periods the delivery certainty was first-class. Domestically the internal logistics started to function well after the transformation stage of the packing systems.

Costs decreased in all Group Companies. Delivery certainty was excellent throughout the year and products in all forms of packaging were delivered to the market meeting the demand.

After the domestic increase of canning capacity, emphasis of Group investment transferred from capacity increase to increase of automation levels and development of internal logistics. Belarus was defined as the future area of priority in productive investments and plans for Belarus were made until year 2014. In 2009 the value of total investments was MEUR 48.4, of which MEUR 29.1 was directed at acquiring minority shareholdings in OAO Lidskoe Pivo, increasing the share of ownership to 87.84 per cent and increasing the share capital of A/S Cēsu Alus. 



















Consumers reacted to recession

In the Baltic countries depression affected consumer behaviour. The markets declined clearly. The decline was apparent in particular in ciders, long drinks and mineral waters. In beers, the emphasis of consumption moved to cheaper alternatives, to refundable and recyclable plastic bottles. In Estonia, Olvi’s total market position as the leading operator in the field was strengthened. In Latvia Olvi retained its strong second position in beers, whereas in ciders and long drinks its position was strengthened. In Lithuania, the market position of beers strengthened and in kvass Olvi became the market leader. Kvass became a new, strong cornerstone for operation in the entire Baltic region and Belarus and this had a positive impact on profitability.

Retail trade launched new private label –products and the average price in the markets decreased. Olvi’s total market position remained on par with the previous year, strengthening in long drinks, where the emphasis in novelty products was directed. Furthermore, in soft drinks Olvi was the only manufacturer to specialise in the consumer-friendly 0.95 litre package size with a high-quality product family that contains several different flavours. Improved product mix increased profitability. 

Olvi got going in Belarus

The most central changes in taking the market in Belarus were recruitment of a new managing director, renewal of the sales organisation, creation of a product strategy and a systematic investment plan in production and logistics made for the next few years. The structure of the sales organisation was renewed and objectives were set for its operation. The products’ outlook was modernised and a marketing strategy was prepared for the Company. The Company logo was revised by appreciating, utilising and respecting the 130 years of tradition. Development of the production and logistics processes commenced successfully.