Kraft Foods Bulgaria CEO Antoine Collette: Bulgaria Moves in Right Direction, Should be Faster
Exclusive interview with Antoine Collette, Executive Director of Kraft Foods Bulgaria, for the "Investors of the Decade" Business Survey of Novinite.com (Sofia News Agency) and Novinite.bg.
Antoine Collette took up his appointment as Executive Director of Kraft Foods Bulgaria, in the summer of 2011. His professional experience began in Peugeot Austria, after that he worked for the marketing departments of Henkel France and Danone France. He continued his career in Danone Hungary & Czech Republic as a Marketing Director. Before joining Kraft in Bulgaria, Antoine Collette worked for Kraft's head office for CEEMA region.
Where does Bulgaria's greatest potential lie for a company such as Kraft Foods?
Kraft Foods attaches great significance to the factor 'location' when selecting the countries to invest in. Situated between Western Europe and Asia, Bulgaria is very well placed, which is why we decided to invest and continue investing here following our acquisition of the two plants in the towns of Svoge and Kostinbrod. Stability, reliability and predictability are the other key requirements for us. We need to know where we are investing, we need to know the laws are not changing from one day to another. In this sense, at least for the moment, Bulgaria is in a good position.
Since it first entered the Bulgarian market in 1994 Kraft Foods has made substantial investments in its existing plants in the towns of Svoge and Kostinbrod. Which are the advantages of these small, but attractive for investors municipalities?
Let me point out that we acquired those two factories, we did not build them. In order to be attractive for investors, municipalities - small or big - should meet the same requirements that a country should – be reliable and solid. The second key factor is the extent to which the municipality is willing to be a business partner. We are competing against all other factories in the network – the Kraft Foods factories in the Czech Republic, Poland, Ukraine and around Europe. The key question for us is how much the local municipality will help us be competitive, create jobs and make life easier.
What is your experience so far?
It is a mixed picture. I seize every opportunity to make people understand this is a win-win relationship. We create jobs in the municipality, we bring direct and indirect business to the place but we are also dependent on the rules and regulations of a municipality and how well its work is organized. We are mutually dependent and should help each other.
How did the investments impact the company's production process, revenues and exports?
The investment in the factory in Svoge 2 years ago was very important since we managed to double its capacity. We are now able to export more than 50% of our production in both Svoge and Kostinbrod to Romania, Serbia, Croatia, Ukraine, Macedonia, Greece, Russia, Turkey and even as far away as Canada.
The investment also impacted the modernity of the equipment. We have now the most efficient line and are therefore able to compete with the other factories from the network.
Two years ago your predecessor Mr Franco Del Fabbro said that the Bulgarian subsidiary of the US Kraft Foods has set itself the ambitious goal to become a manufacturing hub of the company for the Balkans. Is this plan already turning into a reality?
Yes, this is happening and this is very positive. I firmly believe that the more production we roll out at the plants in Svoge and Kostinbrod, the better for everyone. In this way we bring money back to Bulgaria's economy, helping it cope with the crisis it is going through. To put it simply, if you consume Svoge or Nova Brasilia, you are creating jobs in Bulgaria.
Most foreign investors acquire a certain market share by buying plants in Bulgaria. But if it is more profitable for the product to be manufactured outside the country, its production is exported. Which factors do you take into account when choosing where to produce a Kraft Foods product?
Bulgarian brands – Nova Brasilia, Svoge, Mlechen, Suchard - are produced only in Bulgaria. Our consumers will soon notice the fact that we introduced a stamp "Made in Bulgaria" on the pack of our local brands to reinforce this idea.
As for the rest, a number of factors come into the picture and determine our decision. Can we produce this product in this factory or not? Do we have the necessary equipment or not? If not, does it make sense to make a very substantial investment in a new line? Do we have a reliable business plan?
If the answer to the first group of questions is positive, a second group of questions arises. What will be the cost of the product? Do we have the right level of knowledge, the right cost for energy and the other elements of the cost?
It is always a trade-off between the landed cost and the cost of producing the product at the existing factory.
But our decision does not boil down only to the cost. It is also important for us how much the municipality is willing to help us invest. Help does not mean necessarily financial aid, it is about business climate, the environment, construction permits and approval of the official documents.
In fact the competition is not between different countries, but different municipalities.
In what direction does the company plan to develop it production process?
Kraft Foods invests every year a couple of million of dollars in both factories – to improve the quality, increase the speed of machines, meet the high standards of production, make sure that we always give the best product to the consumer. A lot is invested in production sustainability and environmental protection. At the end our goal is to give the best product to the consumer at the best price with less impact on the environment of the municipality and the country.
We are living in times of crisis and it is important that the value of the product comes to the consumer and is not lost along the production chain due to inefficiency. We try to offset the higher prices of the raw materials by being more efficient and cheaper to produce, but always keeping the high quality standards that Kraft Foods has.
How do you assess the actions that the government is taking to sustain the economy and provide new stimulus to foreign investors?
The direction in which Bulgaria is moving in terms of reliability, predictability and sound finances is correct, all the more so when compared to the situation in neighboring countries. But the speed could be accelerated. Bulgaria should develop faster its infrastructure, become even more transparent and reliable.
What will it take for Bulgaria to start boasting greater advantages over other countries in the race for foreign investments in the region?
For any investor, the key principle is how much welcomed you are in the country, how much help you receive, how friendly the environment, how stable the country, how solid the regulations, how developed the infrastructure. We made our choice and picked Bulgaria based on those criteria.
How do you find doing business in Bulgaria different from your experience so far?
My previous jobs took me to different countries, different culture, different continents. But key business principles are true everywhere – transparent rules, open market, honest people.
How has the presence of a multinational company like Kraft Foods impacted consumers in Bulgaria and changed their tastes?
We are not here to change Bulgarians' tastes, but offer people new possibilities and new tastes. Our company continues to produce the traditional Bulgarian products with the same care and selection of ingredients.
The most interesting thing I have witnessed in my experience is that what works in most places, works everywhere. The milk- and chocolate-filled Barni bear biscuits are present on the markets of nineteen countries and Kraft Foods is launching them this year on the African continent. It is exactly the same product – the same recipe, the same products, the same packaging – and people love it. The same holds true for BelVita breakfast biscuits and we are about to announce the launch of new products on the Bulgarian market very soon.
This shows that if the product is good, people appreciate it and it turns into a big success.
It is very important to stress that Kraft Foods does not use cheaper recipes for the Eastern European markets.
In April last year the Slovak Association of Consumers alleged that major food and drink multinationals are packing variable quality products to be shipped to different European countries under the same name.
I can definitely say that for each product Kraft Foods – and this is something that this same study proved - has the same recipe. The Milka chocolate bar in Bulgaria and Austria are exactly the same.
What was your New Year resolution?
I promised myself to get prepared for the marathon in May and make it this year too.
What are your business expectations for 2012?
I am an optimist and I want to stay optimist. I believe that there are always ways to look at the positive side and I hope that 2012 will be a good year. As a manager of Kraft Foods Bulgaria it is my obligation to create space and opportunities to make it possible for the company to get the best.
Kraft Foods logo consists of an upward, red smile exploding into an array of seven "flavor bursts". Which are the seven things you like best in Bulgaria?
I am not chasing seven, but a hundred, quite literally! I have just started to collect stamps of Bulgaria's one hundred national tourist sites. This is a great idea – simple, but great. I am really impressed!
Can you describe Bulgaria in three words?
Let's make it five - a beautiful country with nice people.
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