BlueOrange provides funding for the business development of SIA “LENEK” — a paper napkin manufacturer in Latvia

August 17, 2020

SIA “LENEK”, napkin manufacturer from Latvia, has received funding from BlueOrange Bank in the amount of 670 thousand EUR for business development purposes. The funding allocated has been invested in the purchase of a new production line and packaging plant, as well as in the financing of current assets. SIA “LENEK” is the leading producer of a wide range of paper napkins in the Baltic States, with the production exported to 8 European countries, and the company's products are marketed under the brand names such as ICA, Tork, Narvesen, Optima line, Pica Delhi, and others.

The company currently offers more than 75 types of napkins in different variations of colours, sizes and layers, as well as a variety of print and packaging options. The purchase of new manufacturing and packaging equipment will allow the company to expand its assortment, as well as optimise the production capacity and reduce costs.

“We are very pleased to see that local producers pursue targeted development, acquire stable markets, and the production produced here in Latvia complements the assortment of the world's leading companies. Such producers make a valuable contribution to Latvia's budget and provide jobs for the economy. Small and medium-sized enterprises are the keystone for the recovery and growth of Latvia's economy, so the bank has started to offer a new lending program in the second half of 2020 in order to provide direct support to local small and medium-sized enterprises,” notes Dmitrijs Latisevs, Chief Executive of BlueOrange Bank.

Around 10% of the production of SIA “LENEK” is sold in Latvia, 30% in Lithuania and Estonia, while 60% are exported to other European countries and Russia. The main markets for the company are Sweden, Germany, Estonia, Lithuania and Poland. The company cooperated with the world's leading producers of table-serving and hygiene products, as well as producers for HoReCa (hotels, restaurants and cafes) sector, including Duni Group, Servetta AB, Ragaller, Tork, ICA Group, Gemoss, Maxima, Kulukaubandus OU, Sangaida. SIA “LENEK” produces napkins for both its own brand and for other companies. Among them are the popular trademarks, such as Narvesen, ICA, Optima līnija, Tork, Hellmann’s, Hello Kitty and Franču maiznīca.

The production capacity of SIA “LENEK” reached nearly 450 tonnes in the first quarter of this year and the company employs 70 people. Considering the fact that a significant share of the production of SIA “LENEK” is provided for HoReCa sector — hotels, restaurants and cafes — the pandemic largely affected the company activities in the second quarter with sharp decrease in production demand and major layoffs. However, optimisation of production, business experience and diversification of outlets have helped the company gradually start regaining its position and increasing production capacity at the beginning of the third quarter.

“In the months of the pandemic, we have achieved significant productivity gains by targeted technical modernisation and production optimisation of plants, and currently we are able to produce 30% more with less resources. The stable market and long-term cooperation with our foreign partners have allowed the company to recover 70% of its pre-crisis production levels in July. With the purchase of new equipment, the company will be able to continue expanding and optimising its production, replenishing assortment and entering new markets,” says Vladimirs Zaicevs, board member of SIA “LENEK”.

One of the priorities of SIA “LENEK” is manufacturing of eco-standard compliant products the demand for which is growing rapidly not only in Scandinavian countries and elsewhere in Europe, but also in Latvia. Already, around 5% of the company's output is produced using recycled paper. In the summer of this year the company’s product range was expanded by adding an innovative product — a 100% decomposing eco-napkin in a dispenser box. Not only are the napkins produced from recycled paper, but also the packaging is made of self-decomposing material by using recycled cardboard and corn glue. “We hope this product will be noticed and appreciated on the market. We are also prepared for an increase in production capacity with the increasing demand for eco-production,” adds V. Zaicevs.

SIA “LENEK” was founded in 1996 and is producing a wide range of paper napkins. The production plant is located in Riga, with the area of 800 m2, and the company has also large storage facilities of nearly 1000 m2. SIA “LENEK” purchases raw materials from the leading pulp processing plants to ensure that the produce meets high quality requirements aligning with international standards. In 2019, SIA “LENEK” turnover reached of EUR 3.33 million.