39% Savings in Energy
Client
One of the largest Romanian Manufacturer of packaged mineral waters with two bottling water plants and operations in countries from Eastern and Central Europe.
IndustryBeverage ManufacturingServicesExpense ReductionCategoryEnergy – Electric Power
The Result
39%
Savings Rate
Total Annual Spend:
€404,895
Total Annual savings:
€157,926
In just a 7-month period Energy, related costs were significantly reduced by an average of 39%, increasing the Client’s profit margins rendering them more competitive.
The Challenge
1
The Client uses electricity to run the mineral water bottling processes in the two factories in the portfolio. Starting this year the Client was served as a Last Instance Supplier – FUI by one of the most important electricity suppliers in Romania, with a significant market share. This arrangement occurred without a contract with the supplier, thus specifying a fixed energy price. The energy supply is in accordance with Emergency Ordinance 27 of 2022-03-18- consolidated form, Article 2 (1) and Government Decision 357/2022, whereby the selling price was capped at 1300 lei/MWh, VAT and regulated taxes included, for non-domestic consumers who are not provided for in letter a) - e). The primary challenge that VERALLIS team was faced with, in this project, was finding suppliers willing to agree in a one year contract with fixed energy price for the entirety of its duration. The reason behind this was rooted into the market conditions, under which both visibility & available quantities were limited for no longer than half-year terms. Furthermore, managing to secure a contractual price below the capped price of the existing supplier was a significant barrier to overcome.
The Method
2
VERALLIS initiated a tender process for the provision of Electric Energy services to more than 20 pre-qualified suppliers, including the current supplier of the Client. The commercial negotiations with the potential suppliers and the agreement on the terms and conditions of supply were carried out in order to cover the high-energy needs for both factories in Romania, for a one-year period. VERALLIS recommended that the Client entirely switch from their current Energy provider which lead to a reduction of their electricity expenses by € 92,000 for just a 7-month period, whilst maintaining the running conditions of the energy supply activity. This switch resulted in significantly reduced costs of 39%. Furthermore, the agreed contract price for active energy will be fixed and guaranteed for the entire duration of the contract. At the same time, our Expert Analysts – proactively - carried out negotiations with the current supplier in order to optimize the costs of the Client for Energy Procurement for the first semester of 2024.