Modernization of production plant and production processes implemented

Modernization of production plant and production processes implemented in Zagrebačka pivovara in period from 1995 till 2012 Borislav Šćulac Zagrebačka pivovara 1

Introduction • History of Zagrebačka pivovara • Modernization of production equipment in period 1995 -2012 • Implementation of modern brewing processes in period 1995 -2012 • Results of equipment and brewing processes modernization • Development so far and plans for future

History of Zagrebačka pivovara • Founded in 1892 at current location – Small brewers manufacturers couldn’t cover increasing demand – Initiators for new brewery were count Gustav Pongratz i baron Petar Dragutin Turković – Production buildings were designed by architect Kun Weidmanna – Initial capacity was 30. 000 hl/year • Opening celebration was 12 July 1893 – Beer garden had electric lights, first in town and 15 years before than city of Zagreb – Ozujsko brand launch, today the most popular beer in Croatia • A large modernization of the brewery happened during sixties and seventies following the growth of beer sales • Privatization in 1994 – Interberew became major shareholder – Today is part of Molson. Coors • Zagrebačka pivovara is the biggest Croatian brewery

Modernization of production equipment in period 1995 -2012 • Privatization in 1994 was followed by huge capital investment scope – Replacement of obsolete brewing & packaging equipment – Production capacity increase – Key performance Indicators increase efficiency increase – Quality Assurance of processes and final products – Assurance of environment protection – Assurance of safety on work • Total Capital Expenditure in 17 years was 63. 845. 000 €

Modernization of production equipment in period 1995 -2012 • The most important capital investments – Brewhouse renewal: Meura Mash filter, hammer mill, wort decantation tank, wort cooler , CIP and other related equipment – New fermentation building with 17 cylindrical conical tanks, yeast propagation and yeast storage tanks, CIP and other related equipment – New beer filtration line with candle filter, p. Vpp, carbonation and blending unit – Automation, Energy and Fluids recoveries – Renewal and reconstruction of glass filling lines – Renewal and reconstruction of KEG line with capacity increase – Installation of PET filling line – Installation of can filling line – Decreasing of noise emission : new facades and noise protection walls – Renewal and reconstruction of cooling plant with increase of safety – CO 2 purification plant – Complete replacement of sewer system with separation of technical and rain water including new buffer basin for waste water • Wide modernization of production equipment has been done

Implementation of modern brewing processes in period 1995 -2012 • High Gravity Brewing – High Gravity wort in brewhouse - 15 Plato to 20 Plato – Adjustment on final gravity after beer filtration phase • Wort fermentation till diacetyl reduction – HG wort fermentation 3 do 4 Plato/day – Diacetyl reduction on fermentation temperature – Green beer cooling starts when diacetyl reduction is finished • Cold maturation – Colloidal stability assurance by maturation on -1 ºC • Implementation of modern brewing processes resulted with better control of brewing processes and with standard quality of finish goods

Results of equipment and brewing processes modernization • Increase of production capacity enabled increase of sales volume – Capacity increase from 1. 100. 000 hl/y in 1995. to 2. 000 hl/y today • Technical productivity increase lower industrial cost

Results of equipment and brewing processes modernization • Lower Energy & Fluid consumption lower industrial cost

Development so far and plans for future • Resources management – Wide modernization of production equipment done in period 1995 -2012 – Strengthened Sales and Marketing teams – Brands development – leading brands in core, premium and value segments – Management System developed for brewing industry • Focus on innovations – First on Croatian beer market with branded crates made of polyethylene – First on Croatian beer market with complete replacement of old bottles – First on Croatian beer market with PET packaging – Complete beer portfolio – 11 beer and beer-mixes brands • Market share increase from 29% in 1995 to 43% in 2013 • Plans for future – Continuation of production equipment modernization related with technology development – Continuation of innovations both liquid and packaging – Already in 2013 capital expenditure of 10. 000 € related with new bottles launch

Conclusion • Zagrebačka pivovara today has modern and efficient production – Wide modernization of production equipment done in period 1995 -2012 • Total Capital Expenditure of 63. 845. 000 € – Implemented modern brewing processes – Realized capacity increase and efficient production – Realized sustainable development with care about environment • Realized leading position on Croatian beer market – Zagrebačka pivovara is market leader with 43% market share – Continuous focus on innovations

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