Home Household machines Haier acquires Italian home appliance maker — RealnoeVremya.com

Haier acquires Italian home appliance maker — RealnoeVremya.com

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Company officials in Russia say they are ready to develop two washing machine factories at the same time

Industrial Haier ”Chinatown”, which is under construction in Naberezhnye Chelny, unexpectedly received a Candy washing machine manufacturing plant (Kirov Oblast). The Chinese company Qingdao Haier Co., Ltd. bought Italy’s Candy SpA for $0.5 billion late last year. As a result, the famous Vesta factory in Kirov, which assembles washing machines, can stifle the ambitions of Chelny’s projects. The well-oiled assembly at Vesta or the newly built factory with tax advantages from the PSEDA in Chelny: what will the Chinese bet on? Haier’s business development manager in the Russian Federation, Lyudmila Romanova, told Realnoe Vremya Candy in Kirov that she had no plans to close with the launch of the Haier washing machine plant in August. However, experts say you don’t have to be an economics guru to realize that the special tax regime at PSEDA will outstrip any other production site. Realnoe Vremya tells the details.

Italians confuse the roadmap of the Chinese in Russia

It was learned this week that Qingdao Haier Co., Ltd. has reached a global agreement. on the absorption of one of the leading household appliances Candy SpA of Italy. According to Chinese media, Qingdao Haier Co., Ltd. bought the famous European producer for 0.5 billion dollars. The Chinese have paid this money to expand their presence in the European home appliance market.

By the end of the mega-deal in the European market, Haier had successfully established itself in Russia. It is known that the Russian subsidiary of Haier Appliances Rus PLC obtained the status of resident of the priority social and economic development zone of Naberezhnye Chelny in April 2016. Moreover, it became one of the first and richest in this region. The unprecedented tax advantages of the PSEDA have aroused Chinese interest in the opening of the Chelny plant, which has thus become a launching pad for entering the Russian market. The Chinese first launched a refrigerator assembly plant, investing $50 million in it. The line of refrigerators with an installed capacity of 250,000 units per year settled on the territory of the Master KIP Industrial Park. As Realnoe Vremya has already said, the Industrial Development Fund recently granted the Chinese a loan of 500 million rubles at 1% per year, which will allow them to double the assembly of refrigerators to 500,000 units per year d 2023 and to start the chase with Russian producers (including the Pozis factory in Zelenodolsk). Having become addicted, Haier has embarked on the creation of an industrial “Chinatown”: the Chinese intend to build 12 assembly plants with a declared investment volume of $1 billion on the territory of the independent industrial park. A $50 million washing machine assembly plant has been chosen to be the first project in China’s industrial district.

The Industrial Development Fund recently granted the Chinese a loan of 500 million rubles at 1% per year, which will allow them to double the assembly of refrigerators to 500,000 units per year by 2023. Photo: Sergey Afanasyev

Just before the end of its construction, news of the absorption of Candy SpA, which had settled in Russia much earlier, came from Haier’s headquarters in Qingdao. The Italians had been assembling washing machines at Vesta in Kirov for already 13 years and reached a peak of 500,000 units per year. In 2005, the Italian Candy Group, Europe’s sixth-largest home appliance maker, bought the Russian washing machine maker Vyatka-avtomat. Then Candy invested 15 million euros in the project and estimated that the factory would only produce 250,000 washing machines per year.

The effect of the news of Kirov’s Vesta inclusion in Haier’s structure was as overwhelming as the historic thunder with heavy rain at the plant’s groundbreaking ceremony, which was in Chelsea. After the absorption, Haier will immediately have two equally powerful factories: the capacity of the Chelny factory is also 500,000 units. Players in the Russian home appliance market are still guessing: what will they bet on? Which factory could stop assembling? Should a new player be allowed in when there is proven Vesta?

Vesta from Kirov to wait for Haier from Chelny?

Haier’s business development manager in the Russian Federation, Lyudmila Romanova, told Realnoe Vremya on January 21 that Haier’s deal with Candy “would not affect Haier’s approved plan for project development.” and ”the Kirov factory has no plans to close for the time being”. First, she explained that, in fact, “Haier Corporation officially purchased Italian Candy on September 28, 2018”. The Russian Federal Anti-Monopoly Service registered and approved the deal on December 14, 2018. So the Chinese company had enough time to decide what to do with the next development strategy. Now they have decided to do as the Russians do – ”Don’t swap horses when crossing streams” as the saying goes.

As Romanova said, the construction of the Haier Industrial Park with a total area of ​​127 ha in the Naberezhnye Chelny Industrial Zone will continue. The launch of Haier Laundry Machine Rus PLC’s first washing machine production plant is scheduled for this August. “A new range of washing machines has been created taking into account the demand and needs of the Russian market. All products will bear the Haier brand…New updated job opportunities will be created in the factory,” she noted. At the same time, the Kirov washing machine manufacturing plant will continue to produce devices under the Candy brand. “At this time, Haier Corporation does not plan to close this plant,” she said.

As Romanova said, the construction of the Haier Industrial Park with a total area of ​​127 ha in the Naberezhnye Chelny Industrial Zone will continue. Photo: prav.tatarstan.ru

Candy CIS PLC managing director Gleb Mishin, meanwhile, assumes that no changes are to be expected until the first factory in Chelny is up and running. ”I think there will be no dramatic changes in the short term, at the moment the Haier washing machine manufacturing plant in Naberezhnye Chelny has not been fully commissioned. In addition, organizational changes in sales in Russia are not expected in 2019. Haier’s Russian office will be responsible for selling Haier-branded products, while Candy’s office will be responsible for devices from Candy and Hoover. Both structures will operate simultaneously. From a production management point of view, the two sites – in Chelny and Kirov – will obey Haier’s global production subdivision.”

Division by price

Mishin is confident that Vesta will maintain its demand in the market. ”The demand for Candy factory washing machines manufactured in Kirov is growing at a high rate. Candy bought it in 2005, it was the Vyatka-avtomat factory producing washing machines with a rich history. I assume that the capacities of the Kirov plant will be further loaded, while Haier will manufacture additional products with its own brand at the new site. The Chelny plant is expected to manufacture high-end Haier washing machines, while the Kirov plant will manufacture Candy machines, which come in the middle price segment. I think the production could be redistributed in the future when the new plant reaches full capacity. If necessary, certain Italian production technologies can be relocated to the production site in Chelny”, assumes the general manager of Candy CIS PLC.

Kirov Oblast’s deputy industrial policy minister, Artyom Nopin, not only shares Mishin’s optimism. According to him, the region’s administration has received a notification from investors that Vesta’s production volumes will increase over the next three years (but he did not give figures).

According to Artyom Nopin, the region’s administration has received a notification from investors that Vesta’s production volumes will increase over the next three years. Photo: kirovpravda.ru

Vesta might give a cold answer

However, the shadow of uncertainty also hung over the refrigerator tracking program. In 2015, Candy closed its refrigerator factory in the Czech Republic and moved them to Kirov, increasing Vesta’s capacity by 60,000 units per year. On January 21, Haier’s business development manager in the Russian Federation, Lyudmila Romanova, told Realnoe Vremya that there were no plans to shut down production or move it in the short term because the refrigerator factory Haier Fridge Rus PLC is currently being updated to increase production. capacities. “There are plans to introduce new models of refrigerators for the Russian market as well as components,” she added.

Market participants believe that the opening of the Chelny plant will significantly increase the positions of the unrelated company – two plants will complement each other. ”Haier’s share of the washing machine market in monetary terms is 8%, Candy holds 6.4%. Together, they will hold nearly 15%. Today, Haier imports products directly from China, therefore it pays customs duties. But Chinese devices are unlikely to be cheaper after they are localized in Russia. However, they will be closer to the consumer and reduce the production-sales cycle, which will increase the flexibility of the company from the point of view of the sale of the products, ” a representative of a manufacturer of household appliances who wished to remain anonymous. “The PSEDA offers gigantic concessions, so you don’t have to be an economics guru Adam Smith to figure out that the special PSEDA tax regime will surpass any other point of production in Russia.”

By Luiza Ignatyeva

Kirov OblastTatarstan