White goods manufacturers seen to prepare for new wave of CEE investment
Monday, February 28, 2005, 00:00
Europe?s leading manufacturers of electric household appliances present in France, such as Electrolux, Whirlpool, Bosch Siemens, Indesit and ElcoBrandt, may open new manufacturing plants in Hungary, Poland, the Czech Republic or Romania, French daily Le Monde reported. The article identified two reasons: first, the price of raw materials doubled in 2004, prompting manufacturers to cut labor costs instead; second, companies are seeking to reach consumers in the ?New Europe? and take advantage of the economic boom in the region. The 12.8 million washing machines, dishwashers, ovens, refrigerators and dryers sold each year in France will soon be manufactured in one of these countries, the newspaper summed up the new trend. Jacob Broberg, the spokesman of Sweden-based Electrolux announced plans to relocate 15 of the 27 plants it operates in developed countries to the eastern part of the EU, a move primarily motivated by poor results in Q4, which brought a 37% decline in revenues. Electrolux was one of the first Western European companies to move production to Central Eastern Europe. U.S.-based Whirlpool is also seeking to cut costs, but instead of seeking out cheaper ways of manufacturing, it will make consumers pay for the higher raw material costs, which are expected to rise by 7%-8% this year. Whirlpool hiked its prices by 5%?10% in January, however, this was not enough to cover the higher manufacturing costs.