The Korean company LG Electronics has got a 40-hectare site near Moscow for building a factory.
According to a high-ranking official in the administration of the Moscow region, the factory’s first stage – manufacturing refrigerators and washing machines – will be started up in the middle of 2006. Further on, LG will make domestic electric appliances – televisions, audios and videos, microwave ovens. Investments in the first stage will constitute 50 million dollars, in the second stage – over 100 million dollars, the official said.
The LG Moscow office said that “only the LG Korean office has information on the project” and refused to comment.
Opening of own factory in Russia will let LG get a stronger hold on the Russian market. “Own production in Russia will make LG logistics easier, livelier reaction to changes on the Russian market and, most importantly, appreciably cut the cost of products. Lower customs expenses axe manufacturing cost by at least 10 to 12 percent,” said Viktoria Popylkova, marketing and sales manager of the MIR company (has a far-flung chain of household appliances and electronics shops).
Market members say that foreign manufacturers are showing an increasing interest in Russia. In the opinion of Ivan Tynkovan, president of M.Video (domestic appliances and electronics chain of shops), many Western manufacturers are seeking how to open their production lines in Russia. “Many have been impressed by the example of Italian Merloni. Making appliances in its own factory in Novolipetsk, it has gained a lead before European and even Asian competitors,” he believes. Their prices have fallen by 10 percent and the sale of Merloni washing machines in the M.Video chain have increased by 20 percent following the start of their manufacture in Russia.
From Russian News Agency Novosti
