Appliance maker Gorenje announced that it has recently acquired 5.7 hectares (approx. 613,543 sq ft) of industrial land in the Serbian city of Valjevo. This marks the company's second production location outside the company's seat in Velenje after the Czech Republic.
The company says construction will start in the fall while distribution will start in the first half of next year and production by the end of 2005.
According to Gorenje CEO Franjo Bobinac, the production of cooking appliances has been rounded off with Mora Moravia (a Czech company Gorenje acquired recently), and also the production of refrigerators with the investment in Valjevo.
However, the company says the production of refrigerated appliances could also be set up elsewhere in Eastern Europe. "For now, one of the big alternatives is certainly Russia," Mr. Bobinac said.
"We intend to strengthen our supply sources and develop our supply chain. But the main reason why we are hurrying is that we still don't have an organized distribution center there," said Mr. Bobinac. He also said lower labor costs were also a factor to opening the plant in Serbia.
The production facility, which will require an investment of 12 million euros (approx. U.S. $14.5 million) in the first year alone, will be financed with own sources and loans. The funds are part of the planned investment policy and the company's debt will not increase beyond the present level, according to the company.
Mr. Bobinac added that Gorenje is also keeping an eye on tenders in countries of the former Yugoslavia. (Slovenia Business Week)
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