Nada Stamatovic and Ivan Milicevic, Nelt Group – We Continuously Improve the System of Environmental Management

At Nelt Group, which is considered one of the most successful business systems of the Western Balkans in the field of production, logistics and distribution of consumer goods, as well as tobacco, pharmaceutical and cosmetics products, they recognize environmental protection as an extremely important topic and their long-term strategic orientation.

We talked to Nada Stamatovic, Corporate Communications & CSR, and Ivan Milicevic, Head of Innovation and Development of Nelt Group, about ways to reduce the “carbon footprint” and the sustainable operations of the group.

What are the priorities of Nelt Group in the field of environmental protection?

Nada Stamatovic: Within the quality management system, we continuously upgrade the system of environmental management. Our priorities are the rational use of natural resources, investments in renewable energy sources and the use of technology, equipment and materials which reduce the harmful environmental impact. Considering our primary impact, which is done through transport, we have realized a range of initiatives for reducing harmful emissions. By managing and recycling packaging waste, we are working on reducing our “ecological footprint” by constantly promoting this topic, inside our organization and outside it.



How can logistics and transport be optimized to the end of reducing the environmental impact?

Ivan Milicevic: Intermodal transport is a solution for the optimization of logistics and transport which brings numerous benefits, especially when it comes to a lower environmental impact. The expectations are that the global market of intermodal transport will record a combined annual growth rate (CAGR) of 8.27% compared to the projections for the 2020-2025 period. As a participant in global supply chains and logistics partner of leaders in various industries, Nelt actively contributes to this trend through its own rail-road container terminal, the so-called dry port. Our dry port is connected by rail lines with the main ports of the region and, with that, with the global economy.

The trend of the growth of this service, with all the challenges, continues, because this solution is characterized by numerous benefits – a higher level of security, lower price, simpler goods tracking, reduction of road jams and a large impact on ecological sustainability.

When it comes to road transport, at Nelt, we pay great attention to initiatives which reduce negative environmental impact. By optimizing the routes, procuring vehicles using the principle of the optimal usage of loading space and the power needed to carry out the business task, the consumption of fuel is reduced, and with it the emission of harmful gases as well. By introducing vehicles powered by compressed natural gas (CNG) to their fleet, Nelt wants to secure a cleaner, safer and more cost-effective transport. Although it’s a fossil fuel, it is the cleanest fuel of its kind. For now, there are 18 vehicles with the CNG drive in Nelt’s fleet – 14 for the needs of field sales and 4 cargo vehicles for the delivery of goods to the buyers. One of the initiatives that aim to reduce negative environmental impact is the project Eko Voznja (Eco Ride), which entails a quarterly awarding of the drivers with the most economical driving style.



Are the smart warehouses that you invest in a good way toward the rationalization of energy consumption?

Ivan Milicevic: Absolutely. Our strategic decision is that, parallel with the new investments, the focus be on the optimization of the consumption of the energy needed for the process to be carried out, and in line with the standards required by the business activity. Nelt’s “smart warehouses”, in the central distribution-logistics center in Dobanovci (Serbia) and in East Sarajevo (Bosnia and Herzegovina), are designed and built using the latest technologies which enable the optimization and reduction of energy consumption.

The basic idea of a smart warehouse is to achieve resource optimization through designing the technological process of transport and storage. This entails a well-used volume of the space for goods storage and a well-planned flow of goods through the warehouse.

Furthermore, with the SCADA system, we optimize the use of gas, which results in the overall reduction of the spent energy. In order for the processes to be further optimized and upgraded, over time, new smart devices and sensors have been added to the SCADA system, contributing to new reductions of the impact on the company’s carbon footprint. The connecting of the elements of the system which monitor, on their own, the external and internal temperatures and decide when to activate certain systems, was done. This leads to a reduced consumption of energy for heating, cooling and ventilation in warehouses.

It has been perfected to such an extent that, as per need, external air is used to secure the desired conditions in the warehouse space. Temperature and humidity sensors have also been set up, about which the system can report in the form of a table overview of the measured values.

Both warehouses are equipped with LED lighting of the latest technology with automatic turning-on in the presence of workers in the warehouse and dimming in case there’s no movement or the daylight in the space is sufficient.

How important are recycling and waste management in your operations?

Neda Stamatovic: Care for waste and the consumption of non-renewable resources is an integral part of the business strategy of our company and quality policy. For over 15 years, we have been realizing the national goals of preserving the environment, of which, in the past six, we have been doing so in cooperation with Sekopak, a packaging waste management operator. Through the participation of our company in the system of operators of packaging waste management, the amount of packaging waste that ends up at landfills is reduced, as are CO2 emissions. Savings on CO2 emissions recorded in 2019 and 2020 were at the level of 836.5 tons.

In addition to the systemic management of waste flows, all employees at Nelt contribute to the preservation of the environment – from the colleagues at the warehouse, who collect and separate waste in preparing goods for the distribution, to the office employees, who use the set-up separators in buildings and recycling islands installed in the locations of Nelt’s distribution-logistics centers in Dobanovci, Nis, Novi Sad and Kraljevo. The waste classified this way is collected and pressed in the eco-yard, installed next to Hall 2 in Dobanovci, along with the packaging waste produced in the process of the operations of the warehouse.

In order to further influence the reduction of the amounts of packaging waste from used cardboard transport boxes, in 2017, in Serbia, Nelt implemented an innovation in the system of delivery of goods to traditional stores. Cardboard boxes were replaced with polypropylene boxes. This material is certified and safe when it comes to the transport of food products. The aim of introducing this kind of a return packaging is to increase the safety and quality of goods delivery, reduce packaging waste, more economically use storage and transport space.

In what way are you working on reducing the “ecological footprint” when it comes to paper consumption?

Nada Stamatovic: The Digital Delivery project, which we launched in 2020, considerably automated our logistics processes, with a gradual withdrawing of paper documents from use, so that, in the future, as the end result, we would use digital documentation exclusively. In late 2021, we already realized a considerable reduction of the consumption of paper. Weekly, we use 80,000 copy paper sheets, that is, 160 stacks of copy paper less, which amounts to a total weight of 400 kg. With savings of nearly 25% on corrective documents, it means that, on a monthly basis, we use 1.6 tons of paper less. This way, we save 444 trees a year, which would otherwise be used for the production of paper!

Which initiatives do you plan to realize in the next period?

Ivan Milicevic: In late 2021, there were oscillations in the market of electrical energy. Due to the continuous jump in the prices of base raw materials (gas, coal…) and the sudden increase of the demand following the Covid-19 pandemic, there was a sudden increase in the price of electricity, from EUR 50 per MWh for 2021 to over EUR 120 per MWh for 2022. The uncertainty regarding the prices of base raw materials continues due to the complex global situation.

As owners of production and storage spaces, these events directed us at considering alternative solutions and renewable energy sources. In the past 10 years, the technology of photovoltaic (PV) solar power plants has progressed considerably. PV power plants (so-called solar power plants) are a clean source of electrical energy compared to traditional thermal power plants based on coal or nuclear power plants. We therefore decided to install these systems on most of our facilities within the central distribution-logistics center in Dobanovci, but also on the Fabrika Decije Hrane and Neoplanta factories. These projects are in the realization phase and they will lead to considerable savings on energy consumption from classic sources which have a negative environmental impact.

The phases of construction and exploitation are practically without environmental impact. Upon the expiration of the life cycle, PV panels are dismounted and recycled, in line with the regulations on treating that kind of waste. This phase occurs upon the expiration of the technical and economic life cycle of a PV power plant, which is slated to be a minimum of 25 years.

With the Law on Energy and the Decrees, the Republic of Serbia has opened the possibility for producers of electrical energy from solar power plants which are located on the roofs of existing facilities, and whose energy is partially or wholly used for own consumption to get the status of a “purchaser-producer”, who has the ability to “exchange” surplus energy in one period (May-September, when the production from PV systems is bigger) for the received energy in another part of the year (October-April).

You recently published a report on sustainable business for 2020/21, titled “Continuity, Stability, Agility”. Today, more than ever, companies are recognized for sustainable business operations. What is crucial in carrying out a sustainability strategy?

Nada Stamatovic: It is true that expectations from companies have never been bigger. In order to progress with time, each company has to not just provide financial results, but also show how to give a positive contribution to the market, the local community, the employees and the environment.

The key instrument of carrying out the sustainability strategy is the management of sustainability. The measuring is a pre-condition for good management. You can manage only that which can be measured. Reporting achieves just that, because complex sustainability indicators are used and goals are measured by the defined performance criteria.

Today we have sophisticated forms of reporting on sustainability, supply chain management and corporate sustainability indexes. One example is the GRI methodology, used by the majority of companies in the world, which we also applied in all our reports.

For companies that want to become sustainable, there is no unique formula. It is important to take into account a wider business environment, which includes partner organizations and suppliers.

Working with competing organizations is of great importance for big changes. A sustainable project which works for one company could potentially function for others as well. The best practices should be used as an incentive for organizing the learning process.

Nelt Co d.o.o Beograd

Fabrika dečje hrane d.o.o.

Neoplanta doo Novi Sad

Nelt Group

distribution logistics center Dobanovci

Fabrika dečje hrane

Neoplanta

Nada Stamatović

Ivan Milićević

production of paper

environmental protection

ecological footprint

carbon footprint

smart warehouses

intermodal transport

dry ports

Eko vožnja

Eco Ride

compressed natural gas

SCADA system

recycling

waste management

consumption of paper

RES

solar power plants

prosumer

sustainable business