Jekaterina Stuge on being a CFO within the beverage industry
Jekaterina Stuge is the chief financial officer of Amber Beverage Group (ABG), a company that consolidates Baltic operations (Latvia, Lithuania and Estonia) of the SPI Group, globally known mostly for the production and distribution of the Stoli and Moskovskaya vodka brands. Jekaterina joined SPI Group before ABG was created and one of the first projects that she worked on was the creation of the unified Baltic holding company. Main objective for the creation of the holding was to establish a strong vertically integrated operation covering production, distribution, logistics and retail, all sharing the common goal of being the leading beverage production and distribution company in the Baltics. The organisation’s objective was centralisation of all administrative functions within Baltic companies under one roof, so that subsidiaries could concentrate on their primary business objectives. Here Jekaterina tells us more about Amber Beverage Group, the advantages of operating within the Baltic region and introduces us to the ins and outs of her role, as well as her recent accomplishments.
Please tell us more about Amber Beverage Group?
The Amber Beverage Group (ABG) consolidates the majority shareholding of the beverage production company Latvijas Balzams JSC, and the 100% owned distribution and logistics entities Amber Distribution Latvia SIA, Bravo SIA, Amber Distribution Estonia OU and Bennet Distribution UAB. Previously, the Baltic companies of ABG had operated under the direct supervision of SPI Group HQ in Luxembourg.
To achieve successful consolidation and integration, we have made significant effort to create engaging and ambitious culture amongst our managers and staff. During the process of restructuring, we concentrated on taking out all administrative support functions from operating companies and creating a holding company that will provide shared services of Finance, HR, IT and Central Marketing for our Core Brands. We put a lot of effort on reviewing the processes to exclude duplication of functions within operating companies, in order to make the communication lines clear and effective. Our central team structure now is a good platform for further expansion of ABG.
A good example is our recent acquisition of Fabrica de Tequilas Finos, a company that owns a tequila brand and has a production facility in the town of Tequila, Mexico. Despite this company being located in a completely different part of the world, we manage to take over IT and Finance functions within 2 months and are now providing support services from Riga.
As the CFO of ABG, I have defined my focus on the continuous improvement of our ability to deliver excellence starting with day–to–day tasks. I was leading a project concerned with the implementation of common ERP (Enterprise Reporting Platform) for our companies in the Baltics, as well as common Document Management system and several other Business Intelligence tools. Implementation of common ERP was a crucial step to unifying and automating processes within our operating companies, which supports our objective to minimize the unnecessary routine tasks. Full implementation of ERP system in all our 6 companies is underway and is expected to be fully operational in 2017.
What motivates you most about working for Amber?
I truly enjoy driving progress. Every day I challenge myself and my team/colleagues for a more efficient, smarter way to achieve our business goals. I have many ideas and initiatives that at first appear impossible and it is so rewarding to see them implemented and contributing to our business performance. Our goal – to deliver excellence in everything we do – to me is not just a slogan. It’s a good reason to raise the bar!
During the last 3 years our group companies have changed significantly – transforming from stand-alone, old-school bureaucratic entities to a very modern, progressive, technology-driven holding with dedicated people who work together to achieve the common objectives.
I enjoy being the pacemaker of those changes and I’m proud of the results that we have achieved.
Amber Beverage Group products are sold in over 170 markets around the world – what are the challenges associated with operating cross-border in this sector? How do you overcome these alongside your clients?
The key challenge is always to sell more. We sell our products mainly based on FOB or EXW terms, so from sales support perspective, the major challenges are the legal aspects – registration of all our trademarks in accordance with the local county requirements and ensuring that all back labels include all requested information, according to the different jurisdictions’ legislation.
In terms of market competition, where does Amber Beverage Group stand globally and what are its goals moving forward?
With our newly created and invigorated export team we have made significant steps in building the new distribution network across the world for our brands. Our fast growing international business, which is operating form Riga, Latvia, covers over 50 export markets. We are proud that we produce the 4th largest premium vodka brand – Stolichnaya for SPI Group in our production plant in Riga. Via our network, we are able to reach out to our clients, which helps us to sell our brands in the Czech Republic, Bulgaria, Malta, Panama, South Africa, China, UK, US, Spain, Italy and a number of other markets. Recently we also acquired the Moskovskaya Vodka brand from SPI Group. We are continuously changing and evolving by improving our brand assets and strengthening the position of our leading brands (Moskovskaya Vodka, Cosmopolitan Diva and Riga Black Balsam) across leading spirits markets.
As previously mentioned, we acquired a significant equity stake in Fabrica de Tequilas Finos, Mexico this year. The acquisition is expected to offer us new opportunities, in regards to expanding distribution into the USA and South and Central America.
Our plan is to continue to improve our production capabilities with focus on purchasing, planning and infrastructure improvements to support our goal to deliver quality products at a competitive cost.
What achievements have you made in your role thus far and how have they contributed to Amber Beverage’s performance in 2016?
During the last few years, I have stimulated fundamental changes in the organization, including centralization of the Finance and IT departments and improvement of business processes through automatization of the major business processes, as well as a number of significant improvements in the financial management that affect the healthiness of our financial position. For example, in 2016 I led the restructuring of all of our loan facilities, negotiated additional changes to a number of clauses and covenants that helped us to reduce the borrowing margins. I also implemented effective management of working capital.
Our holding has also benefited from putting all of our cash resources together, in one cash pool – which resulted in both organic and inorganic growth.
The role of a CFO has significantly evolved in recent years – in your opinion, what might the future of CFOs look like in the future?
The role of the CFO has definitely broadened over the past years. Beyond the core responsibilities of financial reporting, audit and compliance, planning, treasury, and capital structure, many CFOs are today playing an important role in operational decisions, and being key advisors to business decision making through the organization. The CFO plays a major role in performance management, and in the development of highly efficient tools to make the decision making more transparent, more straight-forward, and based on more relevant information.
Today CFOs are involved in reviewing and developing efficient processes within their organisations, in order to drive the most cost-efficient performance. This includes automatization of functions and implementing preventive controls from one side, and more flexible business management solutions on the other side, often IT/technology-driven.
I firmly believe that modern financial management should be working with a view of the future – when the finance team is less focused on generating reporting around past performance and ensuring other “passive” support functions, but rather being at the heart of generating the business.
What would you say are the advantages of operating in the Baltic States?
It is a rapidly developing region that still has a lot of unrevealed potential for growth, combined with environmentally friendly living conditions and highly qualified people.