As one of the largest confectionary manufacturers in Ukraine and the Russian Federation,
KONTI has had huge success in producing a variety of products ranging from wafers and sponge cakes, to biscuits and caramel. Founded in 1997, the group has grown tremendously, earning a place among the three major confectionary suppliers in Ukraine, with a 13.5% share of the national market. The group sells its products in 17 countries across Europe and Asia in addition to selling on the national market. KONTI has produced almost 300 products to date, all made from high quality materials that are eco-friendly and do not contain genetically modified organisms (GMO).
The group prides itself on the quality of its products, which are produced with high-tech machines, manufactured by leading European producers. KONTI recently took 27th place in the international rating of confectionary companies. General director of KONTI, Oleg Logvinov, would like to credit this in part to the most important factor in the group’s dealings, which is the practice of making quick and correct decisions. “We constantly invest into the sector, and as a result, 100% of what we produce has changed its structure, switching to new, more technological and innovative products,” he says. “These products differ considerably from those that existed before. As of today, the percentage ratio of new products to the old ones is around 50:50. On one side, we change products within our market and make them more attractive. On the other side, the market is growing by means of an increase in the average price of the product, which means more chocolate content and a more wholesome product.”
‘THE MARKET IS GROWING BY MEANS OF AN INCREASE IN THE AVERAGE PRICE OF THE PRODUCT, WHICH MEANS MORE CHOCOLATE CONTENT AND A MORE WHOLESOME PRODUCT’
‘IT IS EXPECTED THAT BY 2014 THE TURNOVER OF THE COMPANY WILL BE MORE THAN USD 1 BILLION, AND FOR QUICKER DEVELOPMENT, THE PURCHASING OF OTHER ENTERPRISES WILL BECOME NECESSARY’
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To maintain quality standards and to make its products more attractive to consumers, KONTI has developed a very distinctive approach by carefully selecting and working closely with producers of their company equipment to find better technologies and practices, helping KONTI become a company that provides innovation.
“As of today, the market is developing both in terms of marketing and retail, and we should not be so far ahead of the consumer. We should march in step with him, outrunning him a little bit and constantly introducing new products to the market,” says Mr. Logvinov.
KONTI openly welcomes investments and mutually beneficial cooperation, especially with partners interested in joining the company’s distribution network. “I must mention that different companies develop in different ways,” explains Mr. Logvinov. “We work only with bank loans. We don’t want to be placed on the stock exchange, nor do we want to sell the company piece by piece. As management and shareholders of the company, we have high expectations for this outlook, taking into account our aggressive development and quick growth.” On average, KONTI expands around 35-40% each year, and leads an active investment policy which allows for the introduction of innovation technologies and active development.
The company has big plans to expand and strengthen its position in the market through aggressive investment. The company’s investments in Ukraine alone have amounted to about $200 million. KONTI also built another factory in Kursk in 2010, in which another $100 million was invested. With a $150 million investment plan in place for the Kursk factory for the next two years, investments will amount to $450 million.
The group has hopes to become one of the 10 best companies in the next 10 years, producing chocolate and confectionary products all around the world, as well as expanding to other markets. KONTI not only creates new workplaces and develops their product; now the group’s interests also lie in purchasing existing enterprises in a range of markets, likening themselves to transnational companies like Nestle or Kraft.
“On one hand, they construct absolutely new production facilities. On the other, they buy already existing companies with good market share,” says Mr. Logvinov. “Up to today, we have not invested in the purchasing of other companies as our company was only buying production sites. However, it is expected that by 2014 the turnover of the company will be more than $1 billion, and for quicker development, the purchasing of other enterprises will become necessary.”
In addition to setting its sights on enterprises outside of its niche, KONTI also focuses its energy on giving back to the community, already providing over 3,000 people with stable jobs. KONTI is one of the main taxpayers in Konstantinovka, the city of the company’s first production site. Here, KONTI also contributes to social projects, already having built a church, supporting a soccer team, as well as a school where soccer players are trained. “We can confidently state that at least in Konstantinovka, KONTI is the pearl of the city,” says Mr. Logvinov.
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