Cooperation between Icelandic Noi Sirius and Kafeko provides reassurance
Operating on an island in the North Atlantic has its challenges.
This was revealed during a visit on a windy and freezing cold day of March to Noi Sirius, a leading confectionery and chocolate manufacturer in Reykjavik, Iceland. In particular, there are lead times for machine parts and for service. However, the company feels reassured due to a long-standing and strongly established co-operation with Kafeko, which among other things represents the packaging machine manufacturer Syntegon on the Nordic market.
Text & Photo: Bo Wallteg
Iceland is home to around 370 000 people, more than half of whom live in the Reykjavik area. Icelanders are clearly a people who love sweets. Noi Sirius produces around 1 700 tons of sweets and chocolate annually, giving it a leading market share of just under 30 percent. In total, it sells about 2 500 tons of products per year through various agencies.
In 2020, Noi Sirius celebrated one hundred years as a company. It started by producing boiled sweets in the centre of Reykjavik, then only with the name Noi, but thirteen years later it acquired a Danish chocolate manufacturer, Sirius, which naturally laid the foundation for today’s chocolate production. Over the years, production has grown to include various products popular in Iceland such as liquorice pastilles under the brand name Topas, chocolate-covered corn balls called Kropp, or pastilles called Opal, to name a few. Noi and Sirius were operated as two separate companies for a long time and they only merged in the late 1970s. In 2013, the company started its own production of liquorice, a business that has expanded rapidly. The company also represents Kellogg’s and Pringles in Iceland.
Throughout the years, Noi Sirius has been family-owned. There are no family names in Iceland, so there is no specific owner name to publicise, but at the same time it is no longer so interesting since the company was sold to the Orkla Group in two stages in 2019 and 2021. The company was not actually up for sale when Orkla wanted to establish itself by buying the market leader, but the owner realised that it was a good step to take to secure future development. Orkla has the considerable financial muscle.
– Orkla’s philosophy is that the companies they buy should in principle build on the existing ones. The companies should not lose their identity, and this means that the staff remaine and everyone continues to perform their tasks as before, says Haraldur Lúðvíksson, who is the production manager at Noi Sirius.
– In other words, we continue to control our development, but naturally in dialogue with Orkla.
Production, storage and administration are housed in an area of 8 000 square meters and around 150 people are employed.
Easter eggs are a major product in Iceland
When we visit the company, the production of chocolate Easter eggs is in full swing. It starts already in January. Easter eggs are a must-have product in Iceland and Noi Sirius produced 580 000 last year.
Around one million end up on the market every year. They involve a lot of manual labour, shaping and assembling the two halves, filling them with different types of sweets and adding a small figure on top that is “glued” with melted chocolate.
– The second half of the year, from August to December, is dominated by the production of confectionery boxes,” says Haraldur Lúðvíksson. So, we are dominated by two seasons, but in the background there is always the production of chocolate bars and other products.
– We are extremely proud of our products and they are easy to bring to the Icelandic market. Large quantities are bought by tourists in all the shops that cater to them. We have a special range for that.
Key role for the past 10 years
The production machines that melt and mould the chocolate play a key role in the production process, but so do the packaging machines. Machines from Syntegon have played a key role for the past ten years. By then they were called Bosch and Kafeko was represented in the Nordic region. Erik Jörgenvaag is responsible for Norway and Iceland and he was involved from the beginning.
“Kafeko plays an important role in our development in terms of both investment in machinery and service. Erik and I have a very good relationship,” says Haraldur Lúðvíksson.”
– I contacted the then production manager at Noi Sirius and told them who I was and about the opportunities we had to help them with a possible project. Pretty soon, they asked about a project that had not actually been realised yet, but which laid the foundation for our close cooperation,” he says.
– I visited them and realised that there were more interesting projects to pursue. It started with the supply of process equipment, followed by carton erectors and a DSN, an envelope packaging machine for wrapping chocolate bars in aluminium foil and a paper wrapper. It was ordered at Interpack six years ago.
Now we have very close co-operation between Noi Sirius and Kafeko. They have found each other and Kafeko is the obvious first choice when discussing new projects.
– Kafeko plays an important role in our development in terms of both investment in machinery and service. Erik and I have a very good relationship, says Haraldur Lúðvíksson.
– We get a very fast reply as soon as we contact Erik and we are very satisfied with that. It feels very natural to contact Kafeko when we are considering new machines or lines. Our relationship is based on mutual trust and I expect it to continue like that.
Noi Sirius currently has four machines from Syntegon, two carton erectors, a flow-wrapper and the DSN machine. Approximately sixty percent of all production goes through a Syntegon machine.
It’s not enough to just sell a machine
Erik Jörgenvaag agrees that the cooperation works well and says that he tries to react very quickly in order to direct Haraldur to the right people in Syntegon, which is a large company where it is not always easy to find the right person.
– We are open and very honest with each other and there are no hard feelings if a project does not materialise for one reason or another, he says.
“We are open and very honest with each other and there are no hard feelings if a project does not materialise for one reason or another.”
– The important thing for us at Kafeko is not only to sell a machine. We should also be available for the customer after it is installed. My attitude is that I would rather sell a machine for EUR 100 000 that is suitable for the customer, than one for maybe EUR 300 000 that gives the customer more than he needs.
By coincidence, a service technician is on site at the factory on the same day. There are some adjustments to be made to the DSN machine. It works with incredibly small, millimetre-based margins, and the adjustment is best done by a Swiss technician, who also happens to be one of the designers of the bespoke machine.
– It’s actually quite rare that we have to ask someone to come here, but this machine is so complicated that we don’t want to try it ourselves, says Haraldur. In this case, the response time was very short. We got the right name from Erik and then it only took a couple of days for him to arrive on site.
– We have technicians in the Nordic region, says Erik, but in this case it was a special assignment. Our technicians are more specialised in vertical machines.
Noi Sirius does a lot of service and maintenance work itself, but it feels reassured if there is an expert on site once a year who performs preventive maintenance. Some tasks are also performed remotely by camera.
Backup of the backup
Being on an island quite far out in the Atlantic Ocean places some demands on the organisation, not least in terms of planning.
– Lead times are a challenge for many companies wherever they are, but we have a little more difficulty here, says Haraldur Lúðvíksson. Our lead times are significantly longer. We have to look far into the future as part of our planning and it is extremely important that our planning systems are accurate and that everyone works with them. It is a large part of our business.
– Our lead times are weeks or months. If something unexpected happens to the machines, we need to have backup plans that are in turn backed up. When we carry out risk analyses for spare parts, we can conclude that we need to have a stock of critical parts, because every day of downtime is extremely costly.
The envelope wrapping machine wraps the chocolate in aluminium foil and paper.
This should include collecting and analysing data from the machines. Haraldur admits that so far they have not been very good at living up to what is usually called Industry 4.0.
– We have a new philosophy about this today and we are working intensively to adapt the business to this, because if you have no data, there is a lot of guesswork and assumptions. The right data and the right use of it provides peace of mind.
More projects on the way
There are several interesting projects in the pipeline that are being considered in collaboration with Kafeko and Syntegon. This includes both new lines and the expansion of existing ones. There is an ambition to grow through investments.
– When we have ideas about a new project, we have discussions internally about how to move it forward. I often end up contacting Erik and sharing our thoughts with him. He contacts the right people at Syntegon and establishes contact. Then he is always there to make sure that communication flows smoothly and that we get a really attractive offer.
“For us, Syntegon is a market leader in many cases and provides high quality. We have good experience in investing in their machines.”
– Orkla is a long-term owner that gives us local freedom regarding how best to win in the Icelandic market. We decide how our investment budgets are allocated, but sometimes individual projects have to be postponed, for example because of our ability to implement them.
– We have an investment budget that is linked to our growth strategy.
Good to invest from the start
As always, money is important and Syntegon’s machines are not the cheapest. Haraldur does not regard this as a real problem.
– For us, Syntegon is a market leader in many cases and provides high quality. We have good experience in investing in their machines, even if they often cost a little more than the alternatives.
– We are prepared to pay a little more for problem-free and long-term production. It costs more in the beginning but pays off in the long run, concludes Haraldur Lúðvíksson, and there’s no reason why Erik Jörgenvaag should disagree!