Lipetsk Special Economic Zone Development
(about 50 Euros). Through negotiations at company level higher salaries can be
established, this is the case of Stinol.
The offer by Merloni was considered the best one in comparison with other Asian
potential buyers, considering the old relations between Merloni Elettrodomestici and
NLMK.
The doubts expressed by some analysts regarding the selling of Stinol to Merloni
were rejected by NLMK highlighting that it was very difficult for a big siderurgical
company to efficiently manage a business working in the sector of household
appliances.
NLMK decided to focus on its core business whose exports amounted to 1,5 billion
US Dollars in 2003, in comparison with a revenue of 110 million US Dollars for
Stinol.
The big investments by Merloni in the CIS follow a strategy based on industrial
development. These investments had already been planned through a capital stock of
150 million Euros in the bond market, aiming at new takeovers.
This was made by keeping a balanced financial structure and the same profitability
target even though the pay back expected after this investment is about 8 years.
Various factors have contribute to this decision. The main reason is the willing to
complete the range of products sold on the markets of the Russian Federations and
Republics of the ex Soviet Union. Another reason, even if not very important, was
linked to the likely decision by the Russian government to introduce duties in order to
discourage imports and promote domestic imports.
The level of sales of refrigerators to Russian families is still lower in comparison with
Western Europe. Merloni has opened itself to a market with 280 million consumers
and whose refrigerators are quite old, thus needing to be renewed.
After this operation, in the year 2003 Merloni acquired a total market share of 35% in
Russia with its brands Ariston, Indesit and Stinol, compared with the most important
competitor whose market share was 14%.
The new washing machines factory has contributed to local development, also
considering its capacity to attract other suppliers. This is the case of other industrial
compounds were Merloni has settled.
On the 31st December 2003, Merloni employed 19,476 people.View entire presentation