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Report: Electrolux Plans to Close Factories in Europe & North America
Dec 23, 2011
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Developing markets represent the best long-term growth opportunities for appliance manufacturers, and realizing this, manufacturers are adjusting their strategies and global corporate infrastructures, according to the report Top Global Appliance Companies: Major/Small Appliances 2011 from Appliance Market Research Reports.

Electrolux plans to close unspecified factories in Europe and North America and made two major acquisitions in developing regions: Egypt-based Olympic Group, giving it improved access to Middle East markets, and CTI, elevating its Latin American footprint.

Additional examples of this strategy are Arçelik's acquisition of South Africa's Defy Appliances, which strengthened its foothold in Africa, and Group SEB's acquisition of Vietnamese fan producer Vina Electric Fan, giving it significant market presence in Southeast Asia.

Economic recovery has been tepid in developed regions during 2011 and analysts anticipate sales for 2011 to be less than in prior years. North American major appliance sales are anticipated to be comparable to 1998 levels, a decline of 25% compared to peak sales in 2005. Sales in western Europe are also expected to decline compared to prior periods – approximately 15% in comparison to 2006.

"Cost cutting and focusing on emerging markets are leading appliance manufacturer strategies," says Andrew Humphreys, editor in chief of UBM Canon Data Products. "Despite increased cost cutting, many OEMs are concentrating more resources into product research and development."
Much of the product news in 2011 has been centered around enhancing energy efficiency and green technology development, such as:
• An oil-free refrigerator compressor developed by New Zealand appliance OEM Fisher & Paykel and produced by Whirlpool's South American compressor business Embraco. The revolutionary oil-free compressor improves energy efficiency by up to 30% as well as temperature control and refrigeration design.
• A rigid polyurethane insulation technology for household refrigerators and freezers, developed and patented by Dow Polyurethanes. The insulation provides efficient appliance case fillings, meets appliance manufacturer productivity needs, and offers energy-efficiency enhancement capabilities that will meet government mandates for the next several years.

Due to economic dynamics, cost cutting remains prominent to OEMs and is taking place hand-in-hand with the shift to developing markets. At the same time, many OEMs are putting more resources into research and product development. As consumers become more careful buyers, developing differentiated high-value appliances is becoming more important. This includes providing developing nations with appliances that meet cultural demands.

GE continues to expand its reach in resource-rich regions like Russia, Middle East, Latin America, and Asia. The company is committed to supporting localized research, technology, talent, and operations. GE recently announced plans to open another region-based research center to be located in Rio de Janeiro.

More information is available in Top Global Appliance Companies: Major/Small Appliances 2011 located at http://www.appliancemagazine.com/marketresearch/index.php.

For more information on this report, contact Sandra Baker at +1-215-944-9836 or Sandra.Baker@ubm.com.

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