(Aurea 2010) NOMINEE 01: L.A.B.B Group - reusable packaging with RFID technology

L.A.B.B. Group DOO is the first company in Serbia to start production of chipped plastic boxes and the first in the whole world to integrate RFID (RadioFrequency Identification) technology into reusable packaging that circulates within an open system. The investment in unique production unit in Šid, which was opened in November 2009, exceeded RSD 300m, 30m of which were provided by the Executive Council of AP Vojvodina through the Secretariat for Science and Technological Development.

Innovation

Each box has two built-in microchips where complete product declaration is stored by means of manual reader, while the application of RFID technology facilitates positioning, tracking and quicker reading of all data on the product. Boxes are made of the materials that are easy to recycle. They are rented on daily basis to various manufacturers who use them to deliver the goods to their purchasers. Upon delivery, purchasers transport empty boxes to the washing station to be disconnected from the system and thoroughly cleaned and washed. Clean boxes are then sent to the warehouse where they are reconnected to the electronic tracking system.

The innovation of L.A.B.B. Group’s project is reflected in a new business system that comprises the work of four sectors:

1.Manufacturing plastic boxes with built-in RFID tags, intended for rental.

2.Transporting boxes to the users and collecting them once they are used.

3.Washing and disinfecting boxes by means of biodegradable environment-friendly detergents.

4.Sales and marketing sector that finds customers, signs contracts and maintains contact with them in order to meet their demands at any moment.

RFID technology is a new information technology that has a series of advantages over BARCODE, which is, so far, the most used representation of necessary data, that is, declaration of the product that is the subject of transport and sale.

The advantages of RFID technology over BARCODE are the following:

- Reading accuracy is 100 per cent,

- It functions flawlessly in various unfavorable conditions (dirt, damp,low and high temperature)

- There is no need for the product to be within the field of view of the reader.

- RFID tags can be built in products, packaging, etc., and they can penetrate into non-metal materials,

- Several different tags can be read simultaneously, resulting insignificant saving of time.

The advantages of L.A.B.B. Group’s boxes over cardboard and wooden packaging:

- the use of reusable packaging made by L.A.B.B Group is 50% cheaper when compared to the prices of wooden and cardboard packaging

- maximum use of space is enabled during transport and storing, which is not the case with wooden and cardboard packaging

- product quality is better preserved, perforations on the packaging enable better circulation of air during transport and storing,

- they can be used for transport from farm to retail store, without the need for additional repacking of products,

- preconditions are created for implementation of all standards stipulated by the European Union,

- costs of transportation are reduced because 4 trucks loaded with goods in our packaging requires only one truck when empty reusable boxes are being returned (ratio of full to empty boxes is 1:4),

- if the user damages packaging, he is not required to pay for the damage,but only to return all parts of the damaged box, which are then included in the recycling process.

SOCIAL UTILITY

L.A.B.B. Group gave the biggest contribution to the society and economy of our country by directly hiring 40 people (total of 75 is planned to be hired) to manufacture chipped boxes, while more than 500 people will be employed indirectly.

We should have in mind that that company insists on plastic packaging that offers a series of advantages over wooden packaging since it is both cost-efficient and environment-friendly product. It is important to point out that the boxes are made of the materials that are easy to recycle after use. Also, L.A.B.B.Group contributes to environment protection by purchasing plastic items of polypropylene and polyethylene that it first processes and then uses in further production. Within the scope of that project, which was launched in May, the company purchases mainly plastic tables and chairs and other items made of“full“ plastic at the price of RSD 10 per kilogram.

Calculation of how much wood is used in the production of wooden boxes:

According to the data provided by the Republic Statistics Institute, the crop of apples in 2008amounted to 235,601,000 kg. Apples are transported to buyers in wooden boxes.

Total of15,706,733 wooden boxes were needed for aforementioned crop. One cubic meter of poplar can be used for production of 700 boxes, which means that it was necessary to cut 22,435 cubic meters of poplar (note: 60% of wood can be used in production).

When we add to this calculation the need for cutting trees for production of crates and cardboard boxes for other fruits and vegetables, we come to the conclusion that the ecology of our country is seriously endangered in this way. Aforementioned packaging is thrown away after use.

The commercial success of L.A.B.B Group is guaranteed by a big interest of agricultural manufacturers, processors, purchasers and market chains, because the aim of each of them is to increase the productivity of business. In addition to offering series of advantages, L.A.B.B Group’s business system enables each link in the chain of users to make savings.

The company is currently entering the phase of expanding production capacity in order to meet the demands of customers. Since the realization of the investment was finished last year and the negotiations with future partners are underway, it is difficult to speak about some concrete numbers and financial indexes. It is important to point out that L.A.B.B Group has no real competition in Serbia, while the company’s comparative advantage at global level lies in the following: they are the first to implement RFID technology and they offer complete service (including production, transport, logistics and tracking, as well as complete servicing,that is, maintenance of packaging) at incomparably lower price.