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WHITE-GOODS PRODUCER COULD BECOME EUROPE'S LARGEST BY NEXT YEAR

Poprad frees land for industrial expansion

WITH a decision of the city council in the eastern city of Poprad, home appliance maker Whirlpool Slovakia looks set to become Europe's largest maker of washing machines as early as next year.
On May 9, the council approved the allocation of 120,000 square metres of municipal land for development that Whirlpool says it needs if it is to transfer manufacturing activities to Slovakia from western Europe this autumn as planned.
"We are under great time pressure and have to work quickly, because in October our production from Germany should be moved to Poprad," said Whirlpool Slovakia director Errico Biondi.


EVEN more washing machines should be rolling off the production line in Poprad later this year.
photo: TASR

WITH a decision of the city council in the eastern city of Poprad, home appliance maker Whirlpool Slovakia looks set to become Europe's largest maker of washing machines as early as next year.

On May 9, the council approved the allocation of 120,000 square metres of municipal land for development that Whirlpool says it needs if it is to transfer manufacturing activities to Slovakia from western Europe this autumn as planned.

"We are under great time pressure and have to work quickly, because in October our production from Germany should be moved to Poprad," said Whirlpool Slovakia director Errico Biondi.

"If we didn't have the land, we would have to move production to Poland," he said.

Last November Biondi was already promising a 50 percent increase in production and investments of over Sk1 billion (€24.3 million) into Whirlpool's Slovak operations, but only if construction on a new manufacturing hall started by this coming June, and if the government granted a series of tax and investment incentives.

Whirlpool plans to build a new production hall in Poprad and expand a nearby industrial park as it consolidates suppliers and boosts output. The firm forecasts production of over two million washing machines per year by 2005, double its current production.

"The global strategy of Whirlpool is to focus individual types of manufacturing towards businesses able to produce the highest quality and at volumes for all of Europe," said Biondi to the weekly Trend in December.

"But we are afraid that bureaucratic problems could halt our development. We cannot wait for a long time," said Biondi.

In late March, however, Prime Minister Mikuláš Dzurinda again promised Whirlpool that it would have the government's support. While not specifying what concrete measures that support would entail, Dzurinda did bring up investment stimuli the state currently has on offer, including 10-year tax holidays and funding for job creation and employee retraining.

With incentives now seemingly taken care of and land issues settled with the Poprad city council, Whirlpool officials say they will be investing €30 million (Sk1.2 billion) this year, and creating up to 700 jobs in the near future. The company currently employs 838.

The expansion will also mean increased output at Whirlpool's Slovak-based suppliers, including Italian-owned plastics maker Prima, already active in the Poprad industrial park, and Brazilian-owned compressor maker Embraco, located in nearby Spišská Nová Ves.

Embraco is also set to grow on Whirlpool's acquisition last year of Polish refrigerator and home appliance maker Polar, located in the southwestern Polish city of Wroclaw. Whirlpool Slovakia officials say other supplier production for the Polish plant will also be coming to Slovakia.

"I am happy that the [members of the city council] understood that Whirlpool is securing another 600 jobs for Poprad," said city mayor Anton Danko after the decision was announced. Unemployment in Poprad was 17.1 percent at the end of March, compared to a national jobless rate of 16.5 percent.

Whirlpool was one of the first foreign investors in Slovakia, launching its operation in 1992 with the acquisition of a minority stake in washing machine producer Tatramat Poprad. When the company started, it was producing around 97,000 machines per year.

Since raising its stake in the company to 100 percent in 1996, Whirlpool has been steadily increasing investment and output. Total investments of both Whirlpool and Embraco top €100 million, and Sk605 million (€14.7 million) flowed into the Poprad operation last year for new technology and equipment.

Whirlpool Slovakia saw turnover of Sk7 billion (€170 million) in 2002, and is projecting the figure to exceed Sk10 billion (€243 million) this year. More than 80 percent of its products are exported, mainly to neighbouring central European states.

Early last summer, Whirlpool announced it was moving production of top-loading washing machines from its plant in Amiens, France to Poprad, and further consolidation is likely to follow.

"I didn't believe that it would be possible for us to turn an old factory into Whirlpool's largest plant in Europe," said Biondi last summer in an interview with the weekly finanical magazine Profit.

"Today we are making over a million washing machines a year, and we are preparing to expand our capacity and broaden our product range," added the Whirlpool director.

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