Russian drinks group cuts costs with bottle plant investment

Related tags Bottle

Russia's OST group, one of the country's biggest alcohol producers,
has built a new bottle plant near Moscow which will supply it with
up to 600 million bottles a year - and save it more than $10
million, writes Angela Drujinina.

The new plant, in the town of Electrostal in the Moscow district, cost OST some €44 million, and the company claims that it will be one of the biggest glass bottle factories in the world once its maximum capacity is reached. At present, it can produce around 260 million bottles a year.

The OST group, which consists of more than 30 companies, had previously sourced its bottles in Ukraine, Latvia and Finland, spending between $10-15 million per year on its packaging requirements. The savings generated by supplying its own bottles will be substantial. "Our own glass bottles are of very high quality, but they are 20-35 per cent cheaper to make than to import,"​ said Evgenii Yarochkin, deputy director of the OST-TARA plant.

He said that the costs could be kept down because the main raw material supplier for the bottle plant, Ramensky GOK, is based near the new facility.

The OST-TARA plant will produce more than 25 glass bottles of different designs and volume - from 200 gram jars to 1.5 litre bottles. At present, the plant is capable of producing 12 different varieties.

The new plant is equipped with the latest production technology: glass forming lines from Germany's Emhart Glass, other lines from Weimann + Wahl, a kiln with capacity of 300 tons a day from Zorg and packaging equipment by MSK. OST-TARA is also highly mechanised - just 250 people are employed at the facility.

The plant is also environmentally friendly, with a full waste-recycling system.

Elena Sorokina, general director of the OST group, told​ that the economic advantage of the new plant was clear. "Having our own glass bottle plant is very profitable. Not only has it helped our own group companies save money on buying expensive imported bottles, but some 35 per cent of the plant's output will be sold to other companies, a totally new revenue stream for us."

The Russian Committee on Entrepreneurship in the Packaging Segment had no available data for glass bottle consumption in Russia - "We are trying to collect this data,"​ said Evgenii Smotriaev, deputy chairman of the committee - but a representative of the National Alcohol Association of Russia said that "up to 25 per cent of Russian alcohol is bottled in plastic and cartons, which are considered convenient by consumers and which offer greater possibilities for original designs.

"In the next few years, the amount of plastic and carton beverage packaging could increase to 30 per cent or even 40 per cent, but our legislators have the role to play - they have been trying for a long time to pass a law requiring all beverages with an alcohol content higher than 9 per cent to be bottled in glass."​ Should that law be passed, companies such as OST-TARA would clearly benefit from an increase in demand.

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