Wednesday, April 23, 2014

Hot-filling in Mongolia with Krones

The still-youthful privately owned company dates back only to 1997. Three siblings, two brothers and a sister, had joined forces with a German investor to set up the company and started off with a pre-owned glass bottling line from Germany. The German investor later sold his stake in the company to the family. Since then, Vitafit has been in the clan’s own hands, and has been proactively inventive in identifying market niches and creating the products to fill them. “Multi” is the best-seller among the firm’s beverage portfolio in Mongolia. This multi-vitamin drink, featuring twelve different fruits with a juice content of 20 per cent, is so popular with Mongolia’s consumers that it accounts for about a third of Vitafit’s approximately 80 million fills. Right from the start, Vitafit maintained a tight focus on quality. Whereas in the initial years of the free-market economy, only introduced in 1992, many start-up companies wanted to make a quick buck with products of inferior quality, which usually ended up with declining sales and ultimately going out of business, Vitafit accepted smaller profits, particularly at first, and re-invested purposefully in technology and marketing.

“Quality smiles”

This has all paid off. Thanks to the motto of “Quality smiles”, Vitafit is nowadays, with a soft-drinks market share of about one-third, alongside the major international competitor from Atlanta, with roughly equal sales. The remaining third of the market is divided up among several smaller national vendors. “As late as the 1990s, 80 to 90 per cent of beverages with a juice content were imported in Mongolia, whereas nowadays the figure is in the low single-figure range”, explains Director Bolorsaikhan S., the middle one of the three siblings.

Vitafit has taken beverage distribution into its own hands. 300 employees alone, with a fleet of around 50 trucks, ensure that the firm’s products reach more than 6,000 customers in Mongolia. It’s true that Vitafit can sell around half of its total output in the capital of Ulaanbaatar, but the other half needs to be physically distributed as well. “Soft drinks are not particularly high-value merchandise, but they’re quite heavy. In terms of distribution with our own vehicles, we restrict ourselves to sales outlets that can be reached either by rail or on paved roads. Offroad links (which Mongolia still has in abundance) are very risky, especially in winter”, explains Director Bolorsaikhan. “Nevertheless, our products can be found in almost every corner of Mongolia. A whole series of customers, too, collect their beverages themselves.”

As far as the extreme weather conditions are concerned, with temperatures dropping to as low as minus 40 degrees Celsius in winter, experience has shown that transportation lasting five to six hours does not yet cause the beverages to freeze. Over greater distances, they do in fact arrive frozen, but after they’ve been thawed out the quality is just as good as before: “Putting in place a properly functioning distribution system in such a huge country was a real challenge”, says Bolorsaikhan. He hopes that in a few years’ time the major cities will be connected by asphalted roads. Vitafit then intends to invest in expanding its fleet of trucks.

A diversified portfolio of kit

Vitafit is no less broadly based when it comes to its actual core business: beverage production and filling. In 2002, the firm began to bottle its “Vita” table water in PET containers and was thus one of the first major water vendors in Mongolia. The speed of the line featuring Chinese machines has meanwhile been doubled to 10,000 containers an hour. An aseptic line fills one-litre carton packages with juices and milk, originally at a speed of 3,600 containers an hour, and now at 11,000 containers an hour, together with a second line. Back in 2005, Vitafit had also put into operation a hotfill line manufactured in China: it is rated at 6,500 to 8,000 containers an hour, and bottles ice tea, juices and pulpy juices in 0.6-litre wide-neck PET bottles. Then, in 2008, Vitafit boldly introduced dry-aseptic filling of juices in PET containers, at a speed of 15,000 containers an hour on a German line. Since 2009, Vitafit has also been the sole Pepsi Cola licensee in Mongolia. For bottling this range of carbonated soft drinks, Vitafit operates another German line rated at 15,000 bottles an hour. Kefir is also filled in 1.0-litre and 1.5-litre PET or HDPE containers, plus small tubs.

A highly diversified spectrum of kit for more than 40 different products under seven individual brands. These include not only “Multi” multi-vitamin juice and the “Goy” fruit juice beverages in eight different flavours, with a fruit juice content of ten to 50 per cent, or Goy ice tea in five different variants but other interesting products, too, like Goy Superfruits with sea buckthorn from regional farms in 420-millilitre PET bottles and “Anar” 100-per-cent juice featuring anti-oxidative fruit varieties with a high Vitamin C content. Since 2011, Vitafit has been bottling an elegantly dressed pulpy Aloe Vera drink in wide-neck PET, and an organic premium 100-per-cent juice in one-litre beverage cartons is yet another must.

Krones as the key vendor

In the summer of 2013, Vitafit expanded its equipment portfolio to include a hotfill PET line from Krones, the first of this kind that Krones has installed in Mongolia. At 18,000 bottles an hour, it’s at the same time Vitafit’s fastest line so far. As the key vendor, Krones was responsible for installation and coordination of the entire line. The Krones machines, for example, serve as signal generators for all other machines in the new syrup kitchen as well. The reverse-osmosis water treatment system in the syrup kitchen, for instance, was manufactured in China, as were the container conveyors or the labeller and the bottle cooler. “For all the ‘critical’ machines, we placed the order with Krones directly”, says Purchasing and Foreign Relations Manager Otgonbayar G. “It was very interesting to carry out the installation work with a decidedly international team: Chinese and Italians for the homogeniser, Russians for the electrics, the Germans from Krones, and our own Mongolian staff. Krones was the ringmaster here and was ultimately responsible for the entire job.” The line went into operation on time at a high efficiency rating in July 2013.

Hot-filling still fruit juice beverages

The syrup kitchen features a Krones deaerator and a VarioFlash shell-and-tube heat exchanger as a flash pasteuriser for the product, which also performs a control function as the CIP master for cleaning procedures. The bottling line incorporates a Contiform H12 blow-moulding machine with a hopper, preform feed and preform interior cleaning, which is monobloc-synchronised with a Modulfill VP-GL-PET filler, where the beverages are filled at a temperature of 88 degrees Celsius. At the filler’s discharge, a Checkmat 731 FM-X+L inspector has been installed whose jobs include monitoring the fill levels in the containers. The blow-moulder/filler monobloc runs in three-shift operation, largely without any manual interventions. End-of-the-line packaging is handled by a Variopac Pro FS non-returnables packer from Krones.

The first delivery package included four mould sets from Krones, for containers with volumes of 250, 480, 500 and 1,250 millilitres, used to bottle eleven different still products, including fruit-juice beverages with a juice content of 20 per cent, essentially the variants of the “Multi” brand and “Anar” juices in hotfill bottles with panel-type sidewalls and a 28-millimetre narrow-neck design. Since the end of 2013, the line has also been filling milk-based mixed drinks in 250-millilitre containers. “For the closure, the market trend is moving towards narrower mouths”, says Director Bolorsaikhan. Lightweighting is another topical issue for Vitafit: “We know we have to make the bottles lighter, and that’s one of our prioritised goals. On the Krones line, we’re already running 500-millilitre bottles weighing just 23.5 to 25 grams, whereas our competitors are still using 28-gram hotfill bottles. But as far as eco-compatibility is concerned, too, we’re aiming to go even further in future”, explains the Director.

One of the reasons why Vitafit opted for a hotfill line instead of a second aseptic line, says Bolorsaikhan, is that the hotfill line is less complex, and correspondingly easier to operate, not least in view of the fact that aseptic specialists are rare and expensive in Mongolia. A comparison of the general cost situation also favoured the hotfill option. It was clear right from the start that Vitafit preferred a monobloc configuration for the blow-moulding machine and the filler, because “the trend on the market is definitely moving towards monobloc configurations, which is quite understandable due to the user-friendlier operator control concept involved”, says Senior Engineer Byambajav D., who had been entrusted with this project right from the start. What’s more, the new line had to be integrated into an existing section of the hall, which meant the reduced footprint of the monobloc was a significant plus.

The hotfill line is already up and running in three-shift operation. Round the clock, it has a heavy workload in the peak season, particularly, which in Mongolia lasts from May to August: in these four months of the Mongolian summer, Vitafit sells 50 to 60 per cent of its annual output.

Plenty of ideas up their sleeves

Vitafit is now employing 700 people, and aiming to upsize its current annual sales of 80 million fills by starting up the Krones line. “It depends on the market, of course”, admits Bolorsaikhan. As soon as in five years’ time, he fears, Mongolia’s beverage market could already be occupied and saturated in every regard. But at present, he continues, there are still enough niches and gaps. “This is why we are developing new brands very quickly.” In the pipeline, for example, is a strawberry-flavoured milk-based drink, which will be bottled on the Krones line, a near-water beverage called “Vitaplus” in lime, apple and pomegranate flavours, plus a vitamin-enriched water. Vitafit also has a concept up its sleeve for a fruit-juice beverage called “Pear + Rock Candy”, and at the end of 2014 aims to launch smoothies on the market. The Mongolians’ fondness for black tea and Georgian green tea is something else that Vitafit intends to translate into a technically viable product, and packaged milk tea would be a project for the future, capitalising on the Mongolians’ traditional drinking customs. A “café au lait” would also be conceivable. “We aim to utilise the capacity of the new hotfill line, and to launch two or three new products every year”, emphasises Director and co-owner Bolorsaikhan.

“Our goal is to stay the biggest producer of soft drinks in Mongolia, by offering our Mongolian fellow-citizens maximised quality at reasonable prices. In the Mongolians’ eyes, Germans are above all dependable, precise and deadline-compliant. Which is why it’s good that we’re able to say we bottle our beverages using German technology from Krones. This gives consumers additional confidence in our products."

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