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NEO GROUP results impacted by raw materials and supply chain disruption
PET manufacturer UAB NEO GROUP, which operates out of Klaipėda FEZ, saw its turnover reach 366 million euros last year, with 18 million euros in profits. The company’s results mostly influenced by fluctuations in the commodity markets and supply chain disruptions.
Due to the COVID-19 lockdown and reduced consumption in the first half of 2020, there was a drastic fall in commodity prices which led to reduced sales income last year, which were 28 per cent lower than in 2019. The company’s profits also fell by 25 per cent, but nevertheless, manufacturing proceeded in a stable manner, while investment valued at almost 3 million euros was completed in energy efficiency, sustainability and product development.
NEO GROUP general manager Ruslanas Radajevas comments that while there was a decline in packaged beverage consumption last year due to slowdown in tourism flows, this was partially compensated by increased consumption in other packaged food (for home consumption or take-away catering) sectors.
“This year, we plan to maintain stable manufacturing and export volumes. NEO GROUP will continue developing the investment projects that have been launched in green energy, post-consumer packaging recovery, and the circular economy. We have tied our greatest expectations to mass production of PET granules, which, thanks to our proprietary technologies, contain 25-30 per cent of recycled materials, and we will continue investing in this technology as well as market and client education on more sustainable use of PET,” says Radajevas.
This year, NEO GROUP began supplying its customers with the first batched of PET resin, which are produced using 25 per cent of recycled secondary material. This product, dubbed NEOPET CYCLE, was created thanks to the company’s engineers and scientists developing an enhanced recycling technology, which NEO GROUP is currently patenting in the EU. This material allows beverage manufacturers to comply with secondary commodity use requirements, which are due to come into power in the EU in 2025, without adjusting their existing production lines.
Around 90 per cent of NEO GROUP’s production are exports, primarily to the Polish, Scandinavian, Baltic markets, amongst others in Europe.