Beverages as a new line of business

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Kenya’s demand for more healthy products will soon be on the rise with the consumers’ ever-changing needs and preferences. When bottling beverages with a juice content, for example, preservatives can be dispensed with. Bidco has accordingly become the first beverage producer in Kenya to install a NitroHotfill line, which combines two advantages: firstly, it hot-fills the products, and thus does not require any additional preservatives, and secondly, though, it doesn’t need any thick-walled PET containers of the kind otherwise necessary for hot-filling. For Bidco’s Board Chairman, Dr. Vimal Shah, this technology was one of the determinant factors behind the company’s choice of Krones.

Kenya, with its population of approximately 50 million, is the most economically prosperous nation in the East Africa region. This may also be attributable to the Kenya Vision 2030 programme launched by the government more than ten years ago. It has set the goal of making Kenya a globally competitive nation by 2030, with high standards of living and a safe, clean natural environment. One of the programme’s goals is to make company start-ups easier and improve the ease of doing business.

One man who successfully mastered this step a long time ago is Dr. Vimal Shah. Back in 1985, together with his father and brother, they set up a soap production operation in Nairobi – and today is one of the wealthiest Africans. Over the course of decades, the soap start-up has evolved into Bidco Africa Ltd., nowadays one of the continent’s biggest and fastest-growing companies, with production facilities in Kenya, Uganda, Tanzania and Madagascar and exports going to 20 different African countries. Bidco produces more than 50 brands in the segments of edible oils and fats, baking powder, hygiene and personal care products.

For many years, Dr. Vimal Shah was Bidco’s Chief Executive Officer, until in 2017 when the now-59-year-old became Group Chairman.

He has led the company’s growth and development strategy and with ambitious goals including the aim of making Bidco the first Kenyan company with an annual turnover of more than one billion dollars. Part of these steps was to gain a foot ingin the exciting beverage industry.

Two Krones lines to start with

For the past 3 years, Bidco Africa hascembarked on an ambitious project to put up a state-of-the-art industrial park on an 80-acre site on the outskirts of Nairobi – only a few kilometres away from the Krones Center East Africa. In the first phase, Bidco has put up a factory for noodles, a tetra-pack line for children’s beverages of the Sun top brand and two PET bottling lines from Krones:

  • one for soft drinks, water and energy drinks from the brands of the licensor Monarch Beverages, with whom Bidco entered into a joint venture in 2018.
  • one for juice-based beverages of the house brand Jooz, which utilises the NitroHotfill process.

The CSD line is rated at 27,600 bottles per hour and fills a wide assortment of different products and brands in a total of four different container sizes.

“We opted for bottling under licence, because the technical know-how and the experience of our joint venture partner were important to us in this phase of the market launch. You don’t always have to re-invent the wheel,” says Dr. Vimal Shah.

NitroHotfill for juice

In the juice segment, however, Bidco developed a brand of its own, and opted for a NitroHotfill bottling line.

“This Krones technology offers us a major advantage: we can do without preservatives, and nonetheless don’t have to use any thick-walled containers reinforced with vacuum panels,” explains Dr. Vimal Shah.

The moulds for the 0.3, 0.5 and 1.5-litre bottles were developed by Bidco in conjunction with Krones. Here, the company opted for wide-neck containers with a neck finish diameter of 38 millimetres, to meet the wish for a better drinking feel.

As an alternative to conventional hot-filling, the NitroHotfill process uses nitrogen, which is dosed into the bottle after the filling function has been completed. This increases the internal pressure and equalises the shrinkage behaviour. After the bottle has been capped, its head-space is then sterilised, by bringing the bottle to a horizontal position and thus enabling the product at a temperature of 85 degrees Celsius to fill the entire head-space. After subsequent re-cooling to ambient temperature in the LinaCool, approximately 0.3 bar of nitrogen remains in the bottle, which increases the stability and thus the transportation characteristics of the comparatively lighter PET bottles as well.

Krones likewise installed the entire SyPro S syrup kitchen, with a sugar dissolver for preparing the beverages.

“The collaboration with Krones was brilliant,” comments Project Manager Himanshu Dodhia, and his verdict is shared by Group Director Chris Diaz:

“We are expecting a high overall line efficiency of 95 per cent.”

To remain largely independent of multiple vendors, the plant produces both the preforms and the closures. For this purpose, two preform extrusion machines from KraussMaffei have been installed, which operate with injection-moulding tools from the Krones subsidiary MHT Holding, plus another extrusion machine for the closures.

More beverages are set to follow

“We looked at all the possible vendors and asked ourselves in what league we wanted to play: whether we opt for the world’s technological leader, or for more affordable firms of a similar size, or for smaller suppliers,” explains Dr. Vimal Shah.

“I did, in fact, receive a significantly more affordable quotation from a Chinese manufacturer – but with machines you’re going to use over the next 20 years you’re tied to the manufacturer concerned. Which is why Krones was the only vendor I seriously considered,” he says, and explains the reasons behind his decision:

“The determinant factors were the lines’ high guaranteed productivity, the engineering, and the local after-sales service that Krones offers with the subsidiary in Nairobi. During the course of the project, we also saw that Krones always endeavours to quickly remedy minor difficulties, of the kind inevitably encountered during installation and commissioning. We’re very satisfied with our decision, and will therefore be working together with Krones again for our further expansion.”

Bidco sees its entry into the beverage market as an important step forward for expanding its range of consumer goods – and many other beverages are set to follow. But one thing is clear for Dr. Vimal Shah: his ethical principles preclude investments in the alcohol, tobacco and meat processing markets. This is because he believes most consumers will in future be changing their attitudes to nutrition and adopting a healthier lifestyle.

Bidco has accordingly already begun to add deficiency vitamins A, D and E to some of its products.

He also attaches great importance to putting in place a sustainable supply chain from the farm to the consumer, to developing zero-waste concepts and to progressing the recycling of plastics. Sustainability is engraved in the DNA of the company’s operations. Bidco believes in continual renewal, so that the structures, products, facilities, systems and partnerships remain dynamic.

Mindful of the impact the plastics would bring to the environment, Bidco entered into a strategic partnership with Kenya PET Recycling Company (PETCO Kenya) to work towards a holistic management of plastics waste.

Working with other manufacturing companies, Bidco promotes responsible waste management by developing strategies, initiatives and infrastructure to ensure efficiency in collection, processing and recycling of the plastic wastes. The partnership and subsequent projects not only work towards a cleaner and less harmful environment, but also improve the socio-economic conditions of the waste collectors; by creating a circular economy where the waste generates value. The recycling company has brought on board multiple industry players under the Kenya Association of Manufacturers (KAM) umbrella to champion and take the interest even further forward.

“We believe in Africa.”

“Kenya has seen a lot of major beneficial changes in recent years. One of our biggest growth-driving factors is the rapid increase in the population. Kenya’s population is growing every year by roughly another million people. The second important factor is the population shift to the cities, which is set to continue: two-thirds of our country is not very fertile, which is why prospects for the people there are unappealing. The third major point is the internet. Here we possess state-of-the-art 3G and 4G technology, with 5G set to follow. Kenya is thus placed 31st in the world rankings for digital living. The people are linked up, and are familiar with the global brands, which naturally enough awakens corresponding needs. All this means more consumption and higher demand for packaged products,” is Dr. Vimal Shah’s analysis of the market.

“The opportunities are huge; the potential is enormous. Now is the right time for companies to invest in this market. This applies to the entire African continent. Because in 2050 there will be about 2.5 billion people living here, twice as many as today.” So Dr. Vimal Shah has already decided on his goal: “We aim to make Bidco the market leader for fast-moving consumer goods on the entire continent not later than 2030. We believe in Africa.”