Vestel turned on the replay – Newspaper Kommersant No. 205 (7406) dated 11/03/2022
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As Kommersant found out, the Turkish manufacturer of household appliances Vestel, which also owns the Vestfrost brand, plans to resume production in the Russian Federation, which was closed in 2016. We can talk not only about the release of our own products, but also about the contract assembly of other brands. Vestel has prospects for increasing its share in the Russian market, taking into account recognition and democratic pricing policy, experts say. But the manufacturer will have to invest in equipment upgrades.
The Turkish manufacturer of household appliances and electronics Vestel (it also owns the Vestfrost and Luxor brands) may resume production in the city of Aleksandrov in the near future, Alexei Pogudalov, commercial director of Holodilnik.ru, told Kommersant. According to him, in parallel with the release of its own products, Vestel is counting on contract assembly: previously, the plant produced equipment of the brands Whirlpool, Electrolux, Zanussi and others. Another Kommersant source in the household appliances market confirmed that the company intends to “reactivate production in Russia.” However, he specified, there is also a possibility of selling the capacities of a domestic company. At Vestel enterprises in Turkey, the interlocutor of Kommersant added, a wide range of equipment of different brands, including Russian ones, is produced.
According to SPARK-Interfax, LLC Vestel-SNG was registered in 2002 and belongs to the Turkish Vestel Elektronik Sanayi ve Ticaret. In 2021, LLC revenue amounted to 1.4 billion rubles, a net loss of 82 million rubles. The company’s plant in Alexandrov was launched in 2003, the total investment amounted to $40 million. The facility consists of two one-story production buildings with an area of 44 thousand square meters. m. In 2013, the capacity for the production of LCD TVs was 1 million units, washing machines – 350 thousand, refrigerators – 500 thousand. More than 1.2 thousand people were employed at the enterprise and in the office.
Vestel announced the closure of the plant in Russia in March 2016, after a Turkish F-16 fighter shot down a Russian Su-24 bomber in Syria in November 2015. “Our decision (to close the plant.— “b”) is not related to the crisis over the plane. This step was a consequence of the economic crisis in Russia. We’ll take our equipment. There are several alternative options – to open a new enterprise in another country or Turkey,” said Turan Erdogan, CEO of Vestel. But Kommersant’s interlocutors in the household appliances market say that the plant was closed for political, not financial reasons. Vestel “Kommersant” did not answer.
After the outbreak of hostilities in Ukraine, many manufacturers of household appliances suspended deliveries to the Russian Federation and production in the country. As a result, the market shares of leading brands began to fall, for example, Electrolux accounted for 14.7% of the Russian embedded market in February and only 6% in July (see Kommersant on September 2). Brands from China and Turkey began to take their place. For example, Chinese TVs from Haier occupied 20.5% of the market by June (see Kommersant of July 29). Turkish Arcelik (Blomberg, Beko, etc.) bought out the capacities of the American Whirlpool (Indesit, Whirlpool, Hotpoint) in the Lipetsk region (see Kommersant of June 28). Turkish investors are taking the place of European and American investors in other segments of the consumer market.
Vestel produced TVs and large household appliances in Russia under its own brand, and then the facilities were used as a logistics point, Anton Guskov, representative of the Association of Trading Companies and Producers of Electrical Household and Computer Equipment RATEK, explains: “When the plant is reopened, the Turkish brand can take a prominent position in the Russian market “.
But the plant will have to be modernized, which will require an investment of several tens of millions of dollars, Aleksey Pogudalov believes: “Given that the current production at factories in Turkey is scheduled until March, this may well help to meet the high needs of not only our local market, but it is possible that which will give impetus to enter the Asian markets.” In his opinion, due to the decrease in competition from other brands and positioning in the segment below the average, Vestel has a chance to take a significant share in the Russian market.
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