Electrolux acquires production plant in Ukraine

2010-08-12

Electrolux, the Swedish producer of electronic household appliances, has acquired a production plant in Ivano-Frankovsk, Ukraine, where it intends to produce washing machines for the Russian market. The new plant will also be used to strengthen the company’s presence in Eastern Europe and the Commonwealth of Independent States (CIS), and it will function as part of the Electrolux supply base for markets in Central and Eastern Europe (CEE).
Electrolux has acquired the plant from Merloni for €19m ($25m) and the deal, should it receive the approval of the competition authorities, will be finalised in Q1 2011. At present, Electrolux does not have any production facilities in Russia. The company announced the closure of its sole Russian production plant in St. Petersburg in March 2009, and operations at the factory ground to a permanent halt on March 2010. The company cited the unsuitability of the factory for this type of production as the reason behind the closure.
In its report for the first half of 2010, Electrolux noted an increase in demand for its appliances in Eastern Europe, particularly in Russia.