Expats To Watch: Tetra Pak chief: Ukraine business to grow more
Kestutis Sliuzas
Tetra Pak’s ubiquitous packaging for dairy, juice and baby food products is on almost all store shelves in Ukraine.
Kestutis Sliuzas
Nationality: Lithuanian
Age: 39
Position/activity: Managing Director of Tetra Pak in Ukraine
Length of time in Ukraine: since January 2011
Tips for succeeding in Ukraine: Be open-minded. Talk to people, and have patience. Don’t “copy and paste,” but rely on your own experience. Make the right adjustments, the right twists; learn what are the market driving forces here, what are the bottlenecks, the triggers and how the market works before you push the buttons.
About four out of five juices and every third milk package is a Tetra Pak product. But to Kestutis Sliuzas, the Swedish company’s managing director in Ukraine, the dominant position is the natural course of events.
“It’s very difficult to imagine the food industry and store shelves in any country without us being there,” Sliuzas told the Kyiv Post.
Tetra Pak rolled its first commercial order off the production line in 1992 at a plant it bought and built up in an industrial zone on the edge of Kyiv’s Podil district that stemmed from a deal it signed with Moscow in the late 1980s before the fall of the Soviet Union.
And as juice makers entered Ukraine’s nascent market, they chose Tetra Pak’s packaging, which today occupies 90 percent of store shelves.
Sliuzas said some 30 million euros were invested in the 1990s and today the company employs 300 people.
One of Ukraine’s first foreign investors, Tetra Pak is still going strong, boosting packaging production to 4 billion items in 2011. The Ukrainian division expects to increase production 5-7 percent in volume this year on the back of an expected increase in annual juice and beverage consumption to 13 liters per capita against 11-12 liters now.
We don’t compromise on quality and on the supplies we receive. Local companies usually do good on the test shipment but when it comes to the ability to deliver in bulk and long term, they don’t cut it with quality control procedures.
– Kestutis Sliuzas
One reason for Tetra Pak’s success is that it’s still a private company.
“We obviously have quarterly reporting, but those reports don’t go to analysts and the stock market so we actually can afford to take a longer perspective, a longer view, which is helpful when we do business in developing markets, where markets are turbulent and can become more risky at times,” said Sliuzas.
The Lithuanian also noted there’s room for growth. Ukrainians consume twice less juice than Russians, four times less than Germans and three times less than the French.
As for milk, a Ukrainian drinks 34 liters a year, four times less than in Finland, 2.5 times less than in Slovenia and 1.5 times less than in France and Russia.
“It’s difficult to say where Ukrainians are getting their nutrition,” said Sliuzas, speaking about the low juice and milk consumption figures.
The managing director said attention to the production process, sound marketing and end-consumer research, as well as innovation, are “what keeps us ahead of the pack at the end of the day. The point is to try to address every single piece of the value chain,” he said.
So whereas Tetra Pak produced about 1 billion items for the Ukrainian market in 2011, it exported a further 3 billion, with 67 percent going to Russia.
But as a global company that prides itself in making packages that “protect what’s good” by using materials that are recyclable, less than 20 percent of packaging inputs are sourced in Ukraine.
“We have a long-term ambition to localize suppliers,” said Sliuzas.
“We don’t compromise on quality and on the supplies we receive. Local companies usually do good on the test shipment but when it comes to the ability to deliver in bulk and long term, they don’t cut it with quality control procedures.”
Still, it has partnered with paper mills in Zmiyiv and Chernihiv, and hired a recycling company in Kharkiv.
Approximately 15 percent of Tetra Pak packaging, or 3,700 tons, that gets to Ukrainian consumers is recycled. But to scale up and double that amount, Sliuzas said, legislation is needed along with more consumers willing to sort waste. A wiser waste management infrastructure would help, he said.
“It’s not just about company social responsibility… At the end of the day, the consumer must believe and have motivation that they’ve done something good for themselves and their children,” said Sliuzas.
The company also does outreach in schools about the importance of drinking milk and juice and how to unfold and flatten Tetra Pak packages. It also donates notebooks made from recycled paper.
When Sliuzas isn’t working, his family competes for his leisure time. An avid shutter bug, Sliuzas likes to travel “to places [he has] never been to or sometimes where other people haven’t been.” Sliuzas said that one should derive satisfaction from the “process through the journey and the arrival at the goal.”
“In my professional life, I definitely like the fact that as a company we’re doing the right thing…we make food safe and available everywhere, it’s a good objective to have,” he concluded.
Kyiv Post staff writer Mark Rachkevych can be reached at rachkevych@kyivpost.com.