To Satisfy European Demand, Food Buyers Look for Local Suppliers: KG Group Invests 20M EUR in New Plant in Lithuania
European demand for instant noodles, an Asian food staple, is increasing, while the Covid-19 pandemic is leaving many supply chains broken. As European instant food buyers, such as supermarket chains, are looking for local producers, Lithuanian instant food company invests 20M in a new local production facility.This is the second company’s production facility in Lithuania.
Global Instant Noodles market, according to a new report, is growing despite the Covid-19 crisis, and is estimated to reach USD 32.1 Billion by 2027. Up till now, most of this instant food has been produced and bought from different Asian countries.
However, the coronavirus pandemic is affecting the market of this Asian staple food, among many others. As many companies are looking to alter their supply chains to be less dependent on Asia, especially China, in the wake of the Covid-19 crisis, they are exploring the options of local production. Exclusive reliance on Asian suppliers has shown its drawbacks as supply chains were cut or unreliable during the pandemic.
In order to satisfy the need for instant noodles and porridges in the European FMCG retail market, KG Group - one of the biggest agriculture and food groups in the Baltic States - is launching a modern instant noodles production facility in Alytus city, Lithuania, after having attracted 20M EUR investment.
The newly introduced technologies will not only increase the production capacity, but they will also enable a greater variety of products and speed up the production process by 4-5 times. The capacity of forty million units of instant food in cups that KG Group produces today will be increased up to 180 million units per year.
“We are glad we will be able to meet the increased demand of local buyers, many of whom are European supermarket chains. A new production plant in Alytus city is our response to the rapid growth of consumer demand, and changes in global supply chains,”said Tautvydas Barštys, Chairman of the Board of KG Group. He addedthat Alytus city is strategically favourable from a logistical point of view, as KG Group exports 95 percent of instant food production.
The new facility is an important addition to the KG Group chain of production. To ensure the highest standards of quality the group exerts control over and takes responsibility for all processes of production from field to table. KG Group buys grain from Lithuanian farmers, selects it with care and uses the group-owned mill to ensure the highest quality of flour. The new local facility expands the existing production capacity and at the same time allows to maintain the same level of quality control.
The 6.5 thousand square meter production facility houses state-of-the-art equipment, which the company acquired from leading German, French, Swiss, and other manufacturers in Europe, complying with the latest quality standards (the highest AA grade according to BRC Global Standards Version 8).
The commercial range of instant foods produced by KG Groupincludes instant noodles and porridges in cups and pouches labeled with brands well-known in Lithuania and abroad, such as Sun Yan, Activus, Dorea,and Just Inn. More than forty major foreign companies, includinglarge supermarket chains trust their private label production with KG Group.
The technological features of the production facility help to embrace the competencies and knowledge of the R&D Department even more effectively introducing new products. KG Group produces new categories of instant products in cups such as pasta, cereal mixes, granola mixes, and couscous. Private label services are available as well.
KG Groupstarted the instant product business eight years ago, when the first production facility, operating to date, was opened in Kėdainiai city. Further plans of the company include the development of products and the range of items, an increase of sales volumes, a supply of new products to consumers, development of export volumes. The main focus is on exports to Western Europe, Spain, Great Britain, and Scandinavian countries.