Iranian manufacturers of household appliances are ready to localize production in the Russian Federation

As Kommersant found out, Iranian manufacturers of household appliances intend to localize production in the Russian Federation. In particular, we are talking about Datees and Emersun, which can buy or lease, for example, the stopped capacities of Samsung and LG. But experts believe that Iranian brands have a “specific design” and are able to interest Russians only in the event of “a severe shortage, which does not exist now.”

Iranian suppliers of household appliances are negotiating the purchase or lease of production lines in the Russian Federation, including considering local factories of LG and Samsung, founder of Smart Solutions and ex-manager of Vestel Huseyn Imanov told Kommersant. General Director of the manufacturer of household appliances Kuppersberg Dmitry Shashkin also knows about the interest of Iranian companies in localization in the Russian Federation: “In Iran, protective duties are 100% on all household appliances, and this is what allowed them to develop the categories of gas and electric stoves, ovens, refrigerators, hoods, etc. Further”. On the other hand, Mr. Shashkin clarified, duties reduce consumer choice, which “affects quality control of Iranian products.”

After the outbreak of hostilities in Ukraine, many manufacturers stopped supplies to the Russian Federation and froze production in the country, including LG, Samsung, Bosch and others. But lesser-known brands from “friendly” countries have flocked to Russia, for example, the M.Video-Eldorado group brought the Uzbek manufacturer Artel to the market (see Kommersant, July 7, 2022).

Holodilnik.ru told Kommersant that in 2022, Iranian Datees and Emersun approached the retailer to promote their products: “The companies wanted to sell equipment in the Russian Federation with their own brands and were ready to place the production of Russian brands in their factories in Iran.” The company added that the price of products from both Iranian companies is higher than that of their Chinese counterparts, since “the components remain imported.”

Iranian companies may have a chance to gain access to production facilities in the Russian Federation on attractive terms. The fact is, says Huseyn Imanov, that the Ministry of Industry and Trade a month ago “delivered an ultimatum to LG and Samsung until January 1, 2024, either to resume production in the Russian Federation or sell it to interested companies, otherwise production may be nationalized.” He did not specify what exactly is meant by “nationalization”.

Three Kommersant sources in the household appliances market confirmed this information, adding that LG has been “trying to find customers for contract production at a plant in the Moscow region for the last month, but to no avail.” Samsung declined to comment; LG did not respond to Kommersant. The Ministry of Industry and Trade only assured Kommersant that they are interested in maximum utilization of all available production capacities in the country: “We strive to expand cooperation with everyone, including foreign investors.”

Equipment produced in Iran is in demand not only in its own country, but also in neighboring countries, says Finam FG analyst Leonid Delitsyn. According to him, the volume of equipment exports from Iran in 2022 reached almost $400 million. But Kommersant’s interlocutor among the suppliers of household appliances believes that Korean factories are too large in their capacity to assemble Iranian equipment: “Iranian equipment is focused on the standards of Asian markets, has a specific design, different from European and, accordingly, Russian.” In his opinion, Iranian technology will be of interest to the Russian consumer only in a situation of “severe shortage, which does not exist now.”

Timofey Kornev