APU operates a vodka factory with an annual capacity of 200,000 hectolitres of finished product, and has since 2008 been making pure alcohol from wheat in a greenfield distillery, up to 38 tons of it per day. The vodka portfolio, comprising more than ten different brands, chief among them “Genghis Khan”, covers 60 per cent of the market. Another line of business is filling milk made of milk powder from New Zealand into cartons at a capacity of 80,000 hectolitres and with a market share of 22 per cent. APU vigorously upsized this segment, by starting up a new dairy for fresh milk, UHT milk, yoghurt and drinking yoghurt in 2013. The company is serving the soft-drinks segment with flavoured carbonated beverages (10 per cent market share), juices of the “Frutta” brand (24 per cent market share) and APU water (23 per cent market share), which has as from mid-2013 also been available as carbonated water – a first for Mongolia.
In the beer sector, APU is represented with twelve different brands, first and foremost its main brand “Borgio”, achieving a market share of 52 per cent with them. The second-biggest player in this segment is Heineken, with its Tiger Brewery and a market share of around 24 per cent, followed by a second privately owned Mongolian brewery and a handful of relatively small, state-runbreweries.
APU has since 2012 also been producing its PET preforms in-house, on two injection-moulding machines with an annual capacity of 80 million pieces. The company has transferred the take-back, sorting and cleaning of returnable glass bottles to a subsidiary. Its own sales organisation, APU Trading, supplies more than 7,000 sales outlets in Ulaanbaatar and 21 of Mongolia’s provinces with the firm’s beverages. And last but not least, APU also runs two of its own restaurants and pubs in the capital, and intends to further upsize these activities as well.
Project Number One: in-house canning
Up to the year 2009, there wasn’t a single canning line in all of Mongolia; canned beer was imported in its entirety. “We saw an opportunity to upsize our market share with a canning capability of our own, and so we decided to install a first canning line from Krones”, explains Project Director Avirmed Mendbayar. “In the meantime, imports of canned beer have shrunk considerably; Mongolian money is now being spent on a Mongolian product. In addition to beer, we also intend to fill soft drinks in slim-cans, that’s our next project.” And APU’s Technical Director Gonchig Enkhbileg adds: “Today, we’re canning almost all our beers. This means that capacities are being as good as fully utilised on the 15,000-cph line, which is running in three shifts.” The heart of the line is a Krones Volumetic VOC filler, upstream of which an empty-can inspector does its job, with a Checkmat 707 FG with fill-level measuring by means of gamma rays installed downstream of the filler. Ensuring the products’ shelf-life is the responsibility of a LinaFlex tunnel pasteuriser. A Variopac Pro WTS 30 packer producing wrap-around and tray-/shrink-packs handles end-of-the-line packaging. On APU’s request, Krones integrated into the canning line a depalletiser, conveyors and a can-lid blow-off unit of Chinese manufacture.
Project Number Two: a PET line
The next project was a PET line rated at 12,000 containers an hour, which went into operation during the third quarter of 2012. The existing PET line, with an output of 6,000 bottles an hour, had no longer been able to keep pace with rising demand. “German consumers would drink beer from a PET bottle only if they had no other choice”, says Mendbayar, who went to university in Berlin. “In Mongolia, things are different. In rural areas, especially, PET containers are popular. They’re easy to transport, they don’t break and they can be re-used, for example, for storing fermented mare’s milk, Mongolia’s national drink”, he explains.
Krones installed a complete Kosme line rated at 12,000 containers an hour, combined with labelling technology from Krones. In this line, a rotary Kosme KSB 6R stretch blow-moulding machine with six stations and an integrated preform rinser supplies an Isoblock filler with the containers. For dressing them, APU has a choice of three concatenated labellers: a Contiroll for applying wrap-around labels, a Sleevematic with a shrink tunnel for full-length sleeves, plus an additional cold-glue labeller for shoulder and back labels. The new PET line is now running in one to three shifts, filling beer and soft drinks, with the proportions varying with the seasons of the year. The older, relatively small PET line is today used solely for filling table water.
New syrup kitchen
APU had also a new syrup kitchen installed by Krones as part of the PET project. This features a sugar-dissolving station, a powder-dissolving station and a mixing station, and supplemented by a Contiflow mixer. The sugar-dissolving station operates in batch mode, with a dissolving capacity of 2,000 litres per batch, and comprises two vessels for dissolving, a sugar tank and a heat exchanger with a capacity of 8,000 litres an hour for cooling the syrup. The associated filter system is equipped with four strainers and two bag filters. The powder-dissolving station consists of a concentrate station and a tank with a screw-type agitator. For the mixing station, three tanks, each holding 15,000 litres, were installed. The carbonation unit’s throughput is 10,000 litres per hour. A flash pasteuriser with a speed that can be varied between 5,500 and 13,750 litres an hour provides gentle pasteurisation for beer, juice and carbonated beverages, using plate heat exchangers. The syrup kitchen possesses its own CIP system with three tanks and two separate admission units.
Project Number Three: a high-bay warehouse
When APU chose to cooperate with Krones for the third time, the project involved was a very ambitious one: the first-ever construction of a high-bay warehouse in Mongolia. The biggest challenge this country faces is its endless expanses, extending over two time zones and measuring just under 2,400 kilometres from west to east, and more than 1,200 kilometres as the crow flies from north to south. APU supplies its beverages to more than 7,000 sales outlets, about 60 per cent of them directly from headquarters, with the rest being served by wholesalers. The depot farthest away is in Ölgii, a small town with a population of 30,000, which is located around 1,700 road kilometres to the west of Ulaanbaatar. Beverage transport is very costly and laborious, some of the roads and tracks are not asphalted and difficult to negotiate during the long winter. “But our policy is to make our products available at the same price everywhere in the country”, emphasises Board Chairman Tseveenjav Erdenebileg. “Our advantage, on the other hand, is that more than one third of the populace is concentrated in Ulaanbaatar.”
When he visited Krones in Neutraubling in 2010, he asked to look at some reference projects of automated high-bay warehouses. “This was the first time in my life that I’d ever seen something like this. And since then, it had been my dream to translate such a fully automated warehouse into tangible reality in Mongolia, so as to streamline our logistical processes”, admits APU’s CEO. No sooner said than done.
Storing goods at minus 40 degrees Celsius
In April 2013, APU commissioned the APW System C (Crane) high-bay warehouse from Krones, following eleven months of construction time. With its exterior dimensions of 83 metres in length, 21 metres in width and 23 metres in height, it offers space for 9,240 pallet slots on eleven levels and 70 two-deep slots on the longitudinal axis. The high-bay warehouse has been dimensioned for four serving aisles, three of which have already been equipped with one storage and retrieval unit each. The fourth aisle, incorporated in the layout so the warehouse can be extended to more than 11,000 slots, remains an option for the future. The pallets of fulls are stored on one side of the high-bay warehouse, and withdrawn on the other.
One idiosyncrasy of this warehouse is the climatic conditions under which it has to function. It has to cope with minus 40 degrees Celsius in cold winter nights just as easily as plus 40 on a hot summer’s day. To ensure this, it was given fit-for-purpose insulation and is in winter heated up to five degrees Celsius so as to prevent the beverages, especially the still non-alcoholic ones, from freezing. The central warehouse, which is located about five minutes by car from the brewery directly adjacent to the distillery, is served by all of APU’s facilities in trucks.
80 per cent of the goods go to the order-picking zone
The second part of the storage hall accommodates the area where goods are kept in readiness for dispatch, and then actually dispatched, with a dedicated picking zone. APU also supplies ultra-small customers, like kiosks or inns, directly from the warehouse – even if they order just a single pack. This entails a high proportion of order-picking work, involving up to 80 per cent of the goods. For this purpose, 92 automatically supplied order-picking workplaces are available on a descending roller conveyor with a capacity of two pallets each, which are served by two transfer travelling carriages. In addition, there are another 82 manual workplaces for order-picking C-articles.
The customer’s ERP system sends the dispatch orders to the Krones Warehouse Management System (WMS), automatically determines the proportions of full pallets that can be dispatched as they are and pallets that have to be order-picked, and then transmits the individual order-picking instructions to the personalised handheld terminals via W-LAN. Two printers have been provided for labelling the order-picked pallets, incl. SSCC barcodes.If a source pallet at the order-picking workplaces becomes empty, the warehouse employee books this in his/her handheld terminal and will – if necessary – directly receive new order-picking instructions assigned to the reserve pallet that follows the empty one. At the same time, the system will automatically send a new reserve pallet from the high-bay warehouse into the order-picking zone. Once order-picking has been completed, the finished pallets are then deposited on the lifts and taken to the ground floor for loading, as are the full pallets that can be dispatched just as they are.The order-picked and “dispatch-as-they-are” pallets are then held in readiness in the dispatch zone on 18 descending roller conveyors. A digital LED display shows whether they are either to be loaded directly onto a waiting truck or to be put in intermediate storage in one of the buffer slots, in case the truck will only arrive later.
Not only can the high-bay warehouse be expanded to incorporate a fourth shelf aisle, the order-picking zone, too, can be upsized by means of a third transfer travelling carriage, and two times 17 automatically supplied order-picking workplaces.For Technical Director Gonchig Enkhbileg, building this high-bay warehouse was an urgent imperative: “APU has seen very rapid growth indeed, we’ve quadrupled our output over the past five to six years. This has compelled us to optimise our logistics, because the situation was bordering on critical. We had rented several decentralised warehouses, so coordinating these evolved into quite a tricky business. The new high-bay warehouse saves space, accelerates the speed at which trucks can be loaded, provides us with enhanced data dependability, and thus improves tracking & tracing, plus monitoring of our goods’ best-before dates. We’re already utilising 80 per cent of the warehouse’s capacity now.”
Project Number Four: a greenfield brewery
As Krones was processing the high-bay-warehouse order, they were simultaneously preparing Project Number Four: building a new greenfield brewery on APU’s premises. The new brewery has in a first step been dimensioned for a capacity of 250,000 hectolitres, with an expansion option in the fermentation and storage cellar to 500,000 hectolitres, which means that APU’s total brewing capacity (including the existing brewhouse) can thus be upsized to one million hectolitres.
The brewhouse, with a cast wort quantity of 200 hectolitres per brew and an option for 12 brews a day, is equipped with the latest state of the art, including a ShakesBeer EcoPlus mash kettle, a Pegasus lauter tun, a Stromboli wort boiling system and the EquiTherm energy recirculation system. “With this kit, we’re saving up to 30 per cent in terms of energy. Nor do we need as much cleaning water as we did before, we’re getting a better yield and we have enhanced dependability in the process across the board, starting from raw-materials reception right through to the finished product”, emphasises Technical Director Gonchig Enkhbileg. “Energy-economy, efficiency, a reduction in operating costs and in environmental impact, all of them meet our requirements for certification under ISO 14001.”
Very latest state of the art in process engineering
The likewise-new yeast propagator consists of two units, with a net capacity of 14 and 100 hectolitres respectively, whose propagation time is seven days. Each of the units is fitted with an “Air Injector” aeration system and a vessel recirculation system. Three yeast storage tanks, each holding 35 hectolitres and featuring aeration and circulation systems, have been installed. There are 16 cylindro-conical combined fermentation tanks with interlinking platform and foam separator in the fermentation and storage cellar. Each of these 1,000-hectolitre tanks can hold five brews, with a fermentation time of eight days and a storage time of seven days.
The filtration and bright-beer-tank room accommodates a Twin-Flow System (TFS) diatomite filter and a PVPP candle filter with a capacity of 200 hectolitres an hour. “By installing the new filter cellar, we’ve made sure that the diatomite waste, which was previously drained off into the gully, is now collected, compressed and properly disposed of”, says Project Manager Mendbayar. The filter system is supplemented by a 70-hectolitre buffer tank, a particle filter, a filtrate buffer tank, a beer cooler, a water deaeration system, a carbonator, and four bright-beer tanks. Routes for pipes and hoses are changed by hand, using panels. Krones was also responsible for the utilities, its scope of supply including a CIP system, a CO2 system, an air compressor, a water treatment system, and a chemical concentrate system. All of the process-engineering kit is controlled by a Botec F1 process control system. APU’s previously existing brewery is now also being changed over to feature the new Botec F1 process control system. This refurbishment means that processes can be optimised here as well, and APU’s operating staff have the same, state-of-the-art user interface in both breweries.
“Utilising the very latest state of the art in the field of process technology constituted a major attraction for us. At first glance, it may seem a bit expensive but it’s worth every penny. What’s interesting in this context is the operating and consequential costs, which we’re reducing by using Botec, as well as downsizing our CO2footprint”, emphasises Mendbayar. And Technical Director Gonchig Enkhbileg concurs: “We see this as a long-term project, which can be relied on to pay off over the years.” At the same time as the brewhouse, production under license of Kaltenberg beer started at APU, an alliance brokered by Krones. “Making this German premium beer will further boost our image here in Mongolia”, emphasises Gonchig Enkhbileg.
Defending market leadership
Successful completion of these four Krones projects in succession brought APU up to the international state of the art. But the Mongolian beverage producer’s expansion thrust still has plenty of life in it. “Our strategic focus for the next five years is clear”, says Board Chairman Tseveenjav Erdenebileg. “We want to maintain market leadership in all our product categories, while also further upsizing our market share for soft drinks and milk. Simultaneously, we’re trying to progress exports, and for that purpose we’re putting in place a new infrastructure, so the high-bay warehouse fits in neatly with our plans. Whereas the spirits market is more or less saturated, we see good to spectacular growth potential for beer, soft drinks and milk. For beer, in particular, we’re anticipating further diversification as far as consumer tastes go, which we’re already helping along with Kaltenberg wheat beer, for example. Our declared aspiration of making and selling top-quality products throughout has been given another intensive boost by what has meanwhile become a long-standing alliance with Krones.”