If energy efficiency were a chocolate, what would it taste like?

Through IFC's Sustainable Energy Finance Program in Russia, a local confectionery manufacturer significantly increased production volumes and reduced the amount of energy it uses to produce one ton of chocolates. The new machinery also enabled the factory to improve product quality helping it to compete with other high-end confectionery from Moscow and abroad. The overall modernization of chocolate production line is expected to reduce energy consumption per ton of output by 33%.

The food industry, traditionally an important sector of the economy in Russia, is currently experiencing a fast growth stimulated by growing spending power of the population. This has fueled the high pace of development of "Kuban", a confectionary company located in Southern Russia.

When Kuban conducted an analysis of the market for confectionery products they identified high growth potential new upmarket chocolate products where the consumption has been growing steadily at an average pace of 245% per year.

In order to compete with Moscow-based confectioners and other international players, Kuban realized that they had to improve production quality, quantity and efficiency.

In response, Kuban talked to their bankers, CenterInvest Bank, who are one of IFC's partners in the Russia Sustainable Energy Finance Program. IFC assessed the proposed project to confirm that the investment in a chocolate machine produced by the Swiss firm Awema, would result in an improvement of energy efficiency. CenterInvest Bank then provided a 3 year lease to finance the purchase. ,

The new machine has allowed Kuban to increase production capacity by a factor of 12 and has significantly improved product quality. The investment has also had a huge impact on the costs per ton of output:

• 34% reduction in electricity consumption
• 32% reduction in water consumption
• 55% reduction in consumption of cooling water
• 45% reduction in consumption of hot water
  

Thus, overall reduction of energy cost was 33% or US$23 per ton of product. This amounts to an annual economy of US$8,500 related to energy saving. The annual labor cost saving is US$194,500 (these staff have been re-deployed to other parts of the company. The investment in purchasing new machine is expected to be paid back in less than 2.5 years. More importantly the company has a premium product that is able to compete with other high quality confectionery.