NEWS

22/11

Segezha Packaging LLC has reached new record indicators of ready product sales

Segezha Packaging LLC is one of the key assets of Segezha Group (part of AFK Sistema) in Karelia. The company manufactures industrial and consumer packaging, and has reached record numbers of ready product sales in 2018.

According to adjusted forecasts, the company sold about 590 million sacks in 2018, which is 23% more year on year, and 6% more than established in the company's budget. As of November 21, 2018, due to coordinated work of all departments of the enterprise, the company delivered its 543 millionth sack on the market, beating the “historic high” of 2016, when the company sold 542 million pieces of products. 

“This is an important and logical result of the company’s effective sales strategy,” said Andrey Brotsman, Vice President for Commercial Activities at Segezha Group. “More than half a billion is not just a great number; this fact confirms that we have selected our priorities correctly, when we moved from selling products to customers to offering ready-to-use packaging solutions on the market.”

According to representatives of the commercial service at Segezha Packaging LLC, the success was based on effective analysis and forecasting of the situation on the market, balanced and well-informed positioning of products, and optimization of sales by channels and markets. The company’s production lines worked at their full capacity for the record long time, from March to October, which required the staff to remain concentrated and dedicated, attentive and responsible in their performance of different tasks.

Packaging, as a key product that allows the company to develop its competitive advantages fully, influences positively the value of the business, the OIBDA and creates high margins. This year paper bags and sacks made at Segezha were exported to 57 countries, including 8 markets that were new to the company, that of Azerbaijan, Spain, Cameroon, Colombia, Portugal, Saudi Arabia, Taiwan and the Philippines. The revenue of the Paper and Packaging Division to which Segezha Packaging LLC belongs, will amount to 68% of the revenue of the entire Group of Companies in 2018.

“Segezha Group is one of the largest suppliers of kraft paper for paper packaging and, based on paper sales figures on a particular market, we can clearly see the areas where the consumption of paper packaging is growing,” said Maxim Pisarev, Vice President and Head of the Paper and Packaging Division. According to him, the Division plans to continue expanding its own converting capacities with consideration of current market trends. One of the key goals of the Group is to increase production efficiency, as well as to bring the share of own consumption of sack paper to the level as shown by leading global manufacturers (around 60-65%).

The paper packaging assets of Segezha Group in Karelia, Rostov Region and Europe annually produce more than 1.2 billion units of ready products. The main effect on the business of packaging and its growth is contributed by modernization of Segezha PPM, and growing production of sacks. The company’s products are being used at almost every Russian plant that manufactures cement and dry construction mixtures. They are also in high demand among major retailers, such as IKEA, Auchan, X-5, M-Video and others. The level of availability of own high-quality materials allows the brand of Segezha Group to control the cost of production of paper sacks and compete successfully with European manufacturers, not only on the market of Europe, Russia, and the CIS, but on the market beyond the FSU countries.