The AVK company has increased its net profit three times
According to the results of the year 2007, the net profit of the AVK Company has increased up to UAH 85 million, which is a threefold increase compared to the same showing of the previous year (UAH 28.5 million). Net profit increase is explained by focusing on the most promising market segments, namely, in the category of chocolate and jelly chewing candies, where the Company has advantages.
The Company had its trade mark “AVK” re-branded in the previous year, trying to create in the perception of consumers the image of “AVK” as the prime chocolate brand. In its priority segments, the Company developed and offered its consumers new high-quality and unique products, which successfully compete with the best world samples. These include the collection of chocolate bars and sweets “Persona-Collection”, bulk sweets “Chocolate Night”, “Creamo”, “Chef-d'oeuvre” with the packaging designed by Paco Rabanne, and sugar-free milk chocolate. At the same time, the Company gradually decreased its range of products in the low-cost segment, and turned down the production of “nostalgia-products” and those, having no significant differences with the competitors’ products.
The Company invested about UAH 100 million in the installation of the new modern production lines and modernization of the existing facilities in year 2007. For the past three years the total amount of investments exceeded UAH 250 million.
The Company has also changed its personnel policy and employees motivation principles in order to stimulate innovations and increase labor productivity. The AVK Company performs the assessment of personnel, creates internal staff reserve, and invests into the increase of employees qualification on the regular basis. Personnel development investment aggregated UAH 1.4 million in year 2007. About 60 % of the Company employees participated in the training arrangements.
“Such a significant increase of profit has not become a surprise for us,” stated the AVK Company director-general Andrey Dikunov. “This is a natural consequence of our consecution of orientation towards the effectiveness of business, and not its scale. In other words, profitability of business is more valuable for us, than its market share. As the result, the AVK Company represents now an effective and financially stable business. Working on the mature market, such as the Ukrainian confectionary market, it is important for us to increase our profits now, instead of increasing the total market share with the expectation of profit growth in the future. Driven by the growing competition and openness of Ukrainian confectionary market, the supply of quality products is going to grow. In the long-term outlook, success will be with the company, which will offer unique products with the distinctive non-material and physical characteristics to the consumers. Only in this case we will be able to compete with the world leaders as equals, and enter new international markets, instead of fighting for the share on the domestic market.”
“Today we are thinking about our consumers above all, - more than ever we spend financial and timing recourses to study consumers’ trends, we are trying to anticipate their expectations by offering confectionary goods with the new characteristics, differing from other products on the market,” stated the AVK’s Marketing and Sales Director, Vladislav Averchenko. “Our latest developments have no analogues on the market – neither by their physical characteristics, nor by market-positioning. The AVK products are in high requisition and profitability, - thus, they are attractive for our strategic partners – retail trading networks. Consumers loyalty, modern products, and mutually beneficial cooperation with the dynamically-developing organized commerce are the basis of our business stability in the long-term outlook.”
