Poland to become white-goods manufacturing center of Europe
Europe's third largest white goods company, Merloni Elettrodomestici, is investing €65 million in Poland as part of it's strategy of moving production from Western to Eastern Europe. This is only the biggest of several white goods investments in this country, as Poland sets out to become the sector's number one European producer.
The €65 million (zł.297 million), drawn from the company's own resources, is to finance a new refrigerator plant in Łódz, as well as the extension of Merloni Indesit Polska's current cooker factory in the same town, with the aim of increasing production from 600,000 to one million units a year.
Merloni, which is also investing €35 million (zł.160 million) in a new washing machine plant in Russia, plans to move 14 percent of production from Western Europe to Central and Eastern European countries by 2005.
The local market for household appliances is growing at a rate of 9.5 percent, compared to a flat growth rate in Western Europe. It's this reality that Merloni, according to country manager Giuseppe Parma, intends to reflect in moving production from Western Europe to CEE.
"Poland, as the region's biggest market, is very important to us," says Giuseppe Parma. "We hope to benefit from growth on the Polish market by increasing our market share."
Yet Merloni's plans for the next two years see CEE country sales increasing by 14 percent, while CEE production will be doubled. This lends some credence to the view of analyst Tomasz Jerzyk, at stockbrokers DM WBK SA, that the governing incentive behind Merloni's move is not sales on the Polish market, but the advantage of low production costs in this country. This will allow Merloni to benefit from higher sales prices in the West, especially in a sector where prices are falling by one to three percent every year. In his view, Poland itself is not such an attractive market, as prices here are among the most competitive in Europe.
"Domestic market leader, Polish-owned Amica, for example, whose income comes mostly from domestic sales, has been struggling because of falling prices on this market over recent years," he says.
However, according to vice-president of media relations, Jacob Broberg, at European market leader, Electrolux, moving assembly lines to Poland is not a very significant factor in terms of cost-cutting on the white goods market.
Merloni's investment is only the biggest of several recent investments in Poland by white goods companies. Electrolux is spending €30 million (zł.137 million) on its tumble-dryer plant in Siewierz, while Whirlpool, now close behind Merloni as Europe's number four, is putting €650,000 (zł.2.8 million) into its cooker and dishwasher plant in Wrocław. Spanish-based Fagor, meanwhile, is moving all of its gas and electric hub production to its own factory in Wrocław, in an investment valued at €600,000 (zł.2.7 million). According to Giuseppe Parma, we can expect this trend to continue. "Before long the white goods industry will see Poland replace Germany and Italy as Europe's number one," he says.
The €65 million (zł.297 million), drawn from the company's own resources, is to finance a new refrigerator plant in Łódz, as well as the extension of Merloni Indesit Polska's current cooker factory in the same town, with the aim of increasing production from 600,000 to one million units a year.
Merloni, which is also investing €35 million (zł.160 million) in a new washing machine plant in Russia, plans to move 14 percent of production from Western Europe to Central and Eastern European countries by 2005.
The local market for household appliances is growing at a rate of 9.5 percent, compared to a flat growth rate in Western Europe. It's this reality that Merloni, according to country manager Giuseppe Parma, intends to reflect in moving production from Western Europe to CEE.
"Poland, as the region's biggest market, is very important to us," says Giuseppe Parma. "We hope to benefit from growth on the Polish market by increasing our market share."
Yet Merloni's plans for the next two years see CEE country sales increasing by 14 percent, while CEE production will be doubled. This lends some credence to the view of analyst Tomasz Jerzyk, at stockbrokers DM WBK SA, that the governing incentive behind Merloni's move is not sales on the Polish market, but the advantage of low production costs in this country. This will allow Merloni to benefit from higher sales prices in the West, especially in a sector where prices are falling by one to three percent every year. In his view, Poland itself is not such an attractive market, as prices here are among the most competitive in Europe.
"Domestic market leader, Polish-owned Amica, for example, whose income comes mostly from domestic sales, has been struggling because of falling prices on this market over recent years," he says.
However, according to vice-president of media relations, Jacob Broberg, at European market leader, Electrolux, moving assembly lines to Poland is not a very significant factor in terms of cost-cutting on the white goods market.
Merloni's investment is only the biggest of several recent investments in Poland by white goods companies. Electrolux is spending €30 million (zł.137 million) on its tumble-dryer plant in Siewierz, while Whirlpool, now close behind Merloni as Europe's number four, is putting €650,000 (zł.2.8 million) into its cooker and dishwasher plant in Wrocław. Spanish-based Fagor, meanwhile, is moving all of its gas and electric hub production to its own factory in Wrocław, in an investment valued at €600,000 (zł.2.7 million). According to Giuseppe Parma, we can expect this trend to continue. "Before long the white goods industry will see Poland replace Germany and Italy as Europe's number one," he says.
