We have our 2022 results, ready to share with our stakeholders. The year was great, the numbers are outstanding.
Having well exceeded our financial commitments, we could have lost a year without continuing with our firm strategy-execution, thinking our very strong sales and EBITDA were good enough.
BUT we didn't just live comfortably with tailwinds. We worked even harder, achieved supplier mix (direct suppliers), customer mix (geo and segment) and our product mix (value added) targets.
We progressed with our Discovery Program, #digitaltransformation. Can work now with our Inline standardization, upgraded wastewater plant, new lab equipment, automated burners and Artificial Intelligence managed spry drying.
And thanks to the new IT/OT plant, cybersecurity, and fiber-based infrastructure, our new #industry40 #dataanalytics platform with integrated MES and predictive maintenance, integrates seamlessly with our new manufacturing/financial ERP. Real time, really.
Wow, yes, this is what will give us a strong position with headwinds too. Bring them in!
Well done team Prolacto, great job.
Proud of you all.
And thanks also to our industrial and IT partners Tetra Pak, GEA Group, Altice Portugal, SIVE FLUID SYSTEMS SL, FOSS, TECNOCON, S.A. Helix Technologies
Óscar Criado del Rey
It is now one year since we communicated here our Program Discovery, and as promised, we would like to give an update on its progress.
As a reminder, we have three main challenges in our top five: low availability of people for any type of jobs in our geography, energy, and waste. With the new technologies within Program Discovery and its training program we believe we will overcome these barriers. We are transforming people into a problem-solving digitally trained team.
We have and update on these installed technologies:
We are finally working with our new inline standardization and separation installation doubling our capacity, thanks to @tetra and @sive. We are much more energy-efficient, we reduce greatly the resources in an entire phase of the production process liberating them for other tasks, eliminate 3 cleaning processes (and related time/water/energy) and are reducing waste significantly in terms of product components.
This helps not only to reduce losses but also to reduce the amount of solids that go to our wastewater treatment plant, which, also under the Discovery Program, we have finally changed to work on continuous mode installing new equipment from @liberaqua in the last few months, together with a new management model, helping reduce our environmental impact greatly.
Also, we are already in a test mode for our newly installed and configured Artificial Intelligence Optipartner spray drying management technology by @gea linked to the new automated burners installed last year and are already receiving real time data to support the so-wanted increased energy efficiency and productivity.
We have installed critical lab equipment by @foss, altogether in use for around 75% of joint potential, that reduce time spent in some of the analysis from 4 hours to 5 minutes allowing freed time for our quality department to concentrate in maintaining our high standards with line presence and prevention.
The project “Green Cold Water” is also on-going: after complementing our installed systems with the new technology we are moving 100% from ammonia-based to a heat recovery system and photovoltaic powered cold-water generation with the support of @eneor. Equipment is ordered and being worked on, and the clock is ticking for installation time.
Last, but not least, we can finally see in real time all data coming from the production and utilities sensors in our data analytics platform from @helix, from which we can also see alarms, trends and can analyze the most critical information to reduce down-time, predict potential failures and prevent future ones. Given the fact that the fully integrated platform includes a new MES for which we have a pilot test and that we installed recently a completely new manufacturing module of our ERP @primavera, this is a very complex part of Discovery, but the most exciting one!
On most of these systems we are continuing with our change-management and training plan with all teams involved. Doing this right, we will enable our people to grow personally and professionally and our organization to do much more, in a much better way.
The Azorean archipelago is considered the ideal region for dairy production. This small region in the middle of the Atlantic Ocean is responsible for 30% of the total milk produced in Portugal and for 50% of its cheese production.
The Azores’ edaphoclimatic conditions are similar to a sub-tropical region with over 170 days of rain per year; It’s influenced by the Gulf Stream that intersects with the Polar Cold Streams. These conditions are ideal for the growth of a variety of plant life all year, including grass, which promotes a system that creates high-quality milk and guarantees a lower incidence of diseases that can affect the general health of the herds.
The vast majority of the farmers have consistently invested in Holstein-Frisian cows and have worked to create a high-value genetic profile cow throughout the years, with a minority of other bovine dairy breeds like Jersey or Brown Swiss.
The combination of the above conditions contributes to pasture-fed milk with proven high-quality and high percentages of hypercholesteraemic fatty acids like omega-3, omega-6, and linolenic acid.
The region has a long historical tradition of milk transformation mainly for cheese manufacture, which can be traced back to the colonial era with an important influence of Flemish people. Today, the main challenge faced by the dairy industry in the Azores Islands is the high cost of transportation. The main markets are located in the continental part of Portugal, and this geographical challenge along with the lack of marketing campaigns to promote local dairy products, allows the region's milk products to be overshadowed by those produced in other European countries.
A comprehensive SWOT analysis needs to be conducted to identify the potential solutions that could improve the value of the dairy sector in the Azorean archipelago. The most important factors to be considered are the establishment of more efficient milk production systems and cutting-edge technology tools that can create awareness around concepts like carbon footprint, social and environmentally conscious practices, and animal welfare.
The most pertinent option is to value dairy production and that might be best done by focusing on three key areas: greater organoleptic characteristics in milk; an exponential approach to product innovation; and exploration of the region's highest and strongest marketing statement – green pasture-feed dairy cows.
The manufacture of key dairy ingredients that can be applied to the production process of important food and beverages, chocolate and confectionary, infant nutrition and other food products from global food players, differentiated cheese and butter recipes that can apply for a protected denomination of origin (PDO), and organic or non-GMO milk products are just a few examples of an important step towards adding product value.
Many of the industries that are based in the islands are dedicated to the manufacture of different types of cheese. The key by-product of this mass production is whey.
Whey is considered dairy waste and represents a problem for the dairy industry once this residue exhibits very high levels of biochemical oxygen demand (BOD) and chemical oxygen demand (COD). These parameters are an indicative measure of the amount of oxygen consumed by microorganisms in the process of decomposition of the organic matter, monitoring potential environmental polluters. The high levels associated with whey exceed the limits established by national and international standards and therefore it is prohibited direct disposal of whey in the environment in most regions of the world.
The high pollutant load of whey means that is extremely necessary to find effective and permanent sustainable ways of using whey. Many efforts have been made by the industry and by researchers around the world in order to add value to whey.
In the Azores, Whey is mainly sold as a commodity in the dry form, or its use is leveraged by Prolacto by producing whey-mix formulas with a great application for the beverage (vending) businesses.
Nonetheless, it is necessary to find other applications to use whey in the Azores islands, with a focus on increasing the commercial value of whey derivate products. As whey is a good source of nutrients (lactose, minerals, and bioactive peptides), is necessary to extract specific whey components that could be functional for other industries and therefore create other products that make it possible to increase profit margins.
Innovative techniques such as membrane filtration, and chromatography (affinity and ion exchange) make it possible to separate the components of whey. Using this technology allows the concentration of the protein fraction of whey to originate whey protein concentrates, whey protein isolates, and whey protein hydrolysates. These products are very appreciated as supplements in sports nutrition due to their nutritional and biological value, as they are a source of essential amino acids and have a high capacity for absorption and digestion by the body, ensuring a positive protein balance that promotes muscle hypertrophy. Besides, their nutritional value, whey proteins also have functional properties, such as high solubility, gelatinating, emulsifying, and foaming properties that could be beneficial for their use as an ingredient in the food industry.
Isolation of specific proteins from the whey protein fraction can also be a challenge and a trend to be followed. There is considerable interest in isolating individual alfa-lactalbumin, beta-lactoglobulin, lactoferrin, and immunoglobulin fractions. Alfa-lactalbumin and lactoferrin could be used as ingredients for infant nutritional formula because alfa-lactalbumin is the main protein in human milk and lactoferrin ensures antimicrobial, antibacterial, anti-tumor, and anti-inflammatory properties. In its turn, beta-lactoglobulin could be applied in the food industry due to gelling, emulsifying, and foaming properties while immunoglobulins improve the immune system by preventing the adhesion of microbes, inhibiting bacterial metabolism, and neutralizing toxins and viruses. To obtain isolate protein fractions, is necessary to apply combined methods such as chromatography techniques, membrane techniques, and other approaches such as electro-separation, magnetic fishing, and aqueous two-phase separation.
During recovering of whey proteins, it is also obtained a fraction called whey permeate. Lactose is the main component of whey permeate and there are also significant opportunities to convert this component into several added-value products mostly through bioprocesses involving enzymatic biotransformation and microbial selective fermentation.
Lactose in its refined state is significantly used as a pharmaceutical ingredient to produce medicines in the form of tablets, capsules, and inhalers and is also used as an inert carrier of drugs due to its stability (physical and chemical) and purity. In addition to this application, through enzymatic processes and chemical modifications, it is possible to transform lactose into several lactose-derived compounds that are considered health-promoting agents, such as galacto-oligosaccharides (GOS), lactulose, epilactose, lactosucrose, lactitol, lactobionic acid, tagatose, and fructosyl-galacto-oligosaccharides (fGOS).
On the other hand, whey permeate (lactose) could be used as a substrate for fermentation processes that allow for obtaining a wide range of valuable products. Among these products can be noteworthy, biogas (methane), organic acids (lactic acid, citric acid, acetic acid, and itaconic acid), polysaccharides (xanthan, pullulan, dextran, gellan), solvents (ethanol and buthanol), polyhydroxyalkanoates (PHA), yeast biomass (single cell protein) and other biochemicals, such as vitamin B12, 2-3 butandiol, and oils.
Thus, with so many possibilities to develop whey-derived products, it is crucial for the Azorean dairy industry to store whey as a valuable resource instead of being considered as waste. Therefore, it is necessary to invest time to make studies and assays to develop products that can be profitable and that can respond to the current needs of consumers. The use of whey to develop food products meets the requirements for health-promoting dairy products that are a trend nowadays. Whey proteins and biopeptides derived from whey are components that demonstrate a range of immune-enhancing and antioxidant properties that result in effects on hypertension, cancer, hyperlipidaemia, and virus infections.
Additionally, other products could be valuable to other industries besides the food industry, so there are opportunities to try to value Azorean whey with other different strategies from those currently used.
Prolacto, Lacticínios de São Miguel, S.A., began a partnership project with Altice Portugal in order to implement measures to improve all the management of the administrative IT system and the daily operations of the establishment, with the aim of making the transfer and allocation of information and data secure, fast and agile.
This project promotes the growth and modernization of the business, concentrating all the information in a place with the highest level of security, thus ensuring the process of evolution and autonomy of the company.
The implemented solutions will include the migration of the technological infrastructure that previously had its headquarters in Prolacto's facilities, to the Altice Portugal Data Center in Beira Interior (Covilhã), the installation of virtual private servers, and a Cloud Office 5.0 solution.
Data Centers are used by large companies, and in its simplest form, are a physical facility that organizations use in outsourcing, to concentrate their data, applications, as well as critical data and industrial intellectual property.
The design of a Data Center is based on a network of compute and storage resources, which enable the delivery of shared applications and data. Key components of a Data Center design include routers, switches, firewalls, storage systems, servers, and application controllers.
The end-to-end guarantee of industrial management and maintenance of the technological infrastructure, and the management of Prolacto's fixed and mobile communications will be contemplated in a virtual platform. This measure also ensures all the security components of the infrastructure.
The Cloud Office 5.0 solution will allow a fast and efficient virtualization of the administrative environment, enabling a single interlocutor for all components of the IT/IS infrastructure and communications network.
The results will be clear and will provide flexibility for the organization to keep up with business evolution, and to be prepared for the disruptive challenges that modern IT communication goes through, and an integrated, centralized and secure management of IT/IS resources.
In terms of operational efficiency of this project, it will be clear the capacity to host data and applications in a safe way, permanently available for all Prolacto stakeholders, minimizing productivity breaks, and the concentration of data and systems always protected and available.
This external structure contemplates the capacity and flexibility to support the evolution of the business, which will be reflected in gains in productivity, efficiency and optimization of resources, and will avoid the need to allocate internal resources to the management of the computer network, or the need to invest in maintenance and technological upgrades.
The margin of improvement will have clear advantages, and will allow Prolacto's management team and support areas to put all their focus on managing the core business of manufacturing innovative, high value-added dairy ingredients that serve customers with a global geographic spread.
"After three years of great growth (40% sales value), we can say that with this bet we have had greater flexibility and ability to adapt and scale the resources to the dynamics of business growth, with lower operating costs.
We have greater autonomy to be focused on the needs of our customers, by having a technology partner with high know-how and ability to align all our technological resources in an optimized way
Diretor Geral (Managing Director) PROLACTO, Lacticínios de São Miguel, S.A.