Ten years ago this year, Givaudan, the world's largest company in the flavor and fragrance segment, announced it would build a factory in Makó, SE Hungary, creating hundreds of jobs. Head of Operations and Company Manager Mihály Karkas talks to Diplomacy&Trade about the operations and achievements of this Givaudan plant.
“This important investment project contributes very well to the growth strategy of the company. A diverse operational footprint, from a product segment and geographical point of view, is an essential foundation of the success. The Makó factory is a highly automated multi-technology site where we produce a wide range of flavors. The factory meets all the challenging quality and religious requirements of customers. In addition, we provide a superior customer experience with high level of efficiency and competiveness,” the company manager says.
He adds that in the last years, the number of jobs at the factory has increased by over 40%, which is an important contribution to the wellbeing and economic development of the area. Givaudan Hungary Ltd. is the 9th largest enterprise in Csongrád County and the second largest in the Makó area. Its products are exported to over 90 different countries around the globe.
Strong first half of the year
Since this spring, a lot of enterprises have been negatively affected by the COVID-19 pandemic. As Mihály Karkas points out, the management’s first and foremost priority is to protect our employees. “We are also very committed to supporting our customers. The strength of our business to weather the storm lies in the resilience we have built up through having ‘natural hedges’. This means that we are present in every single market in the world, with the widest diversity of products and customers. These have been built up over many years by the development of a business footprint, and strengthened by the acquisitions made since 2014. These natural hedges contribute to our resilience. In fact, the factory in Makó shipped a greater volume of product in the first half of this year to our customers than we planned.”
The Makó factory’s product portfolio includes flavors for snacks and crackers; savory products like convenient food, plant based products, processed foods, dry soups, instant noodles and sauces; as well as sweet goods and dairy (e.g.: yogurt-desserts, medicines). The company also offers integrated solutions, that is, “value added solutions that integrate multiple functional ingredients and flavors, which enhance value-proposition and create new growth opportunities with our customers,” Mihály Karkas explains.
Valued member of the Givaudan family
The main markets where the Makó site sells products include mature markets in Western Europe, emerging markets in the CEE (Central and Eastern Europe) and AME (Africa and Middle
East) regions and it also supports other Givaudan sister companies by inter-affiliate export. The Makó factory plays an important role in the international network of the ‘Givaudan family’. It is the Manufacturing Centre of Excellence in Europe for powdered flavors. “We integrate the intermediate production process step by step into our activities in Makó and thanks to that, we can fulfil customer needs in a more agile and resilient way with better customer service levels,” the company manager says.
The Makó factory is part of the global operations network that grows together with the business of Givaudan. “We have applied the Continuous Improvement concept for several years now. The LEAN way of thinking helps us to improve performance, reduce waste and eventually provide better quality and service to our customers. We gained the Silver-Gold certification in 2018 and we are going to apply for Silver-Gold plus certification this year. Our production volume has increased by over 35% in the past years and the new product segment ‘Sweet Goods&Dairy flavors’ was transferred to our facility last year,” he adds proudly.
During the last two years, Givaudan Hungary has established a strong partnership with local suppliers in order to reinforce the supply pattern of some of the key ingredients for the Snacks&Savoury business, including natural commodities like sugar. As a result, a Hungarian supplier now provides the majority of the sugar needed for Givaudan’s Hungarian entity. Givaudan Hungary has made a huge step forward in sourcing different locally produced and processed dehydrated vegetables. “We have increased the amount of vegetable powders like spinach, parsley leaves, celery powder and dill we source from local companies. We are also running other development projects focused on key components like carrot, cauliflower, celery, and paprika powders. Another local Hungarian entity is also providing Givaudan Hungary with a specific spirit vinegar item,” Mihály Karkas highlights.
Givaudan is using these raw materials in a processed, powder form; therefore, the quality is crucial, and the selected and approved suppliers must meet the required organoleptic and microbiology parameters of Givaudan. As a joint collaboration with local farmers and a dehydrated vegetable processing company, Givaudan Hungary has initiated an agricultural project to grow and process white onions which meets the Givaudan standard.
A responsible company
For Givaudan, social responsibility is a key issue, and Givaudan is a purpose-led company. As the company manager puts it, employee wellbeing is their top priority. For example, this July is a ‘fruit month’ when every day, everybody enjoys a piece of fruit, which can help enhance their health. During the unprecedented crisis this spring, Givaudan established a Community Fund to help provide assistance to local communities. For example, with money from the Givaudan Community Fund, the Makó factory collaborated with the Hungarian Red Cross and donated intensive care monitors, infusion pumps and masks for the Makó Hospital.
And that is not all. "With the operational support of the Hungarian Charity Service of the Order of Malta, from May, the company has helped provide warm meals for local families in need. We also regularly support local communities in cooperation with the Municipality of Makó. This year’s coronavirus crisis raised the need for masks in vast numbers. With Givaudan Hungary’s help, highly impacted public service employees and citizens of Makó received washable masks for their own and their communities’ protection,” the company manager points out.
Givaudan’s support for the community has been recognized in several ways, including receiving the ‘Blood Donor Workplace’ award from the Hungarian Red Cross in November 2019. Between August 2020 and March 2021, the Makó Factory is collaborating is with the Givaudan Foundation and the Hungarian Red Cross to deliver other types of community support. This includes providing a collection of school supplies in August; supporting ‘Hero training’ (a training of cardiopulmonary resuscitation and First Aid training) and ‘Girl becomes Woman’ educational run by professionals in the local schools. The company also provides support through Christmas food donations; Christmas shoebox donations (educational toys, books, etc.); and the collection of hygiene products. “Altogether, we support at least 400 families and individuals and with the training programs, we plan to reach approximately a thousand people,” Mihály Karkas concludes.