Romanian refrigerator producer Arctic has doubled production capacity following a 9 million-euro investment, and estimates to log 140 million-euro turnover this year. The stakes are even higher, though: Arctic will actually double its production capacity again by 2006.
"We want to attain a 1.6 million unit production capacity by 2006, double the current levels," said Mustafa Koc, chairman of Turkish Koc holding, which became Arctic's owner last year.
The local producer completed an assembly line this month, wherein it invested 9 million euros and which allows it to attain an annual output of 750,000 units instead of the 325,000 units last year.
"The increase in the production capacity was based on the expansion of the export markets. After all, 65% of Arctic's output this year will be exported," Oguzhan Ozturk, general manager of the Romanian producer explained.
The Romanian producer last year achieved a nearly 80% turnover growth to 94 million euros, going for 140 million euros in 2004.
"It's been a year since we came here and results are way beyond our expectations. Arctic is Arcelik's (the Koc-held company that makes electronics and home appliances and is Arctic's majority shareholder) biggest asset outside Turkey and we will use it as a product supplier for our growth on the international markets," Mustafa Koc added.
The Turks released an almost entire range of Arctic-branded home appliances on the Romanian market last year, so that the refrigerating products are now accompanied by washing machines, cookers and vacuum cleaners.
"The market impact was better than we expected for these products, which allowed us to attain 30% of the Romanian home appliances market. After all, 45% of the refrigerating equipment bought last year were Arctic," Ozturk specified.
Whereas Arctic-branded refrigerating equipment is made in Gaesti, the other home appliances categories are made by Arcelik factories abroad and imported on the Romanian market along with another brand of the group, Beko. The Romanian refrigerating equipment maker was established in 1968 and the first fridge came out in 1972. Competition at the time was in form of Fram, made at Sadu and the Russian Zil model.
After 1989, the company's best year when it exported 340,000 refrigerators, Arctic found itself cash-strapped, so that a strategic investor became necessary. The privatisation was done in 1997, when the company was bought by the European Bank for Reconstruction and Development (EBRD) and Societe Generale Romania Fund (controlled by Societe Generale). The new shareholders implemented a retooling and upgrade plan starting 1998, which cost $30 million and conducted a restructuring programme throughout 2000-2002.
ionut.bonoiu@zf.ro
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