Frenzied production relocation felt on home appliances market

Hans Straberg, CEO of Electrolux group says Romania is still an attractive location for a future plant, as the Swedish group has already opened 9 plants in countries viewed as low-cost production platforms in recent years.
As part of the relocation programme, started in 2004 and worth 8bn Swedish krona (850m euros), Electrolux, a leading global producer of electrical home appliances, has closed down 17 plants and also cut back activities in another 3 units.
“Romania, together with other neighbouring countries, continues to be an attractive destination for a future plant. However, the production situation and the current capacity of our production units does not allow for such an investment at present,” explains Straberg.
Since 1997, the company has owned a plant that manufactures cooking stoves in Satu Mare and has invested almost 30m euros in expansion, development and personnel training at the unit. In the first 3 quarters of this year, Electrolux generated turnover worth 111.3m euros in Romania, up 10.6% against the same period last year.
After the car industry, where the frenzied relocation of production units is most visible, major producers of electrical home appliances are beginning to follow the trend and relocate their units.
As part of the relocation programme, which company officials believe will cut costs by 3bn Swedish krona (319m euros) starting in 2010, the company has closed down 4 plants in Western Europe. At the same time, no less than 4 plants were opened in Poland. “Eastern Europe has developed to a great extent and I believe we will witness a similar effect in Romania – improved standards of living and higher wages, in the coming years. (…),” states Straberg.
He says that, as part of the decision to make a new investment in a production facility, the location is selected depending on the level of the respective country’s economy and consumers’ purchasing power.
To boost the home appliances segment at a European level, Electrolux counts on incentives designed to speed up the rate at which old appliances are replaced with new ones.