BSH Bytovye Pribory, the daughter company of German company Bosch und Siemens Hausgeraete (BSH) in St. Petersburg, is to spend $25 million on a washing machine plant in Strelna, outside St. Petersburg.
BSH has already laid the foundations for the washing machine factory, which is due to be built by 2012 and will produce 300,000 machines per year, according to Harald Richter, commercial manager for BSH Bytovye Pribory.
Recently the plant launched a new line of washing machines and a second line of refrigerators at its existing plant in Strelna. It also announced the expansion of its logistics center.
“It is really profitable to produce household appliances here,” said BSH Bytovye Pribory commercial manager Harald Richter. “St. Petersburg has a lot of advantages. The presence of the airport, ring road and port help us to export our goods.”
In addition to 22 refrigerator models, the company’s factory will now produce three washing machine models. The refrigerators produced at the plant in Strelna, which occupies about 24.3 hectares, are exported to Ukraine, Belarus, Kazakhstan and the EU, as well as being sold in Russia.
Russia’s household appliances market is fourth by size in Europe. BSH occupies 17 percent of the market, putting it in third place.
“We are seeing great demand for our products here,” said Richter.
Production in Russia is profitable in terms of logistics, Alexander Onishchuk, president of the Russian association of electronic and household goods companies, told Vedomosti. The biggest producer on the market is Indesit, he said. Onishchuk said that sales of household electronics had fallen by 50 percent during the crisis due to a slowdown in sales of apartments, adding that the real estate market has now picked up, and demand for technology is returning.
The Strelna factory employs 420 people, and expects to create 100 new job opportunities with the expansion of the production line.
BSH has high requirements regarding personnel, and could run into a lack of specialists, Yelena Kolkova, director of the St. Petersburg branch of Staffwell, told Vedomosti newspaper. She estimated the salaries of production staff at BSH at 30,000 to 35,000 rubles ($965 to $1,125) per month.
Electrolux closed its washing machine assembly plant in St. Petersburg in the second quarter of this year because it was not profitable, and does not plan to resume manufacturing, Fatima Gazanova, an Electrolux representative, told Vedomosti.
Retailer M.Video predicts that the household appliances market will grow by 10 percent this year. The washing machine market will grow by three to five percent compared to the crisis period, and competition will increase, particularly in the low-cost segment (items costing less than 13,000 rubles or $418), Gazanova told Vedomosti.
Nadezhda Kiselyova, an M.Video representative, said that the most demand is seen in the mid-price segment.