Merloni Elettrodomestici has announced a £60 million investment program in the UK, in spite of the government's continuing delay in joining the European single currency.The 3-year project by Merloni is aimed at increasing production from the company's four UK factories near Bristol, at Peterborough, in North Wales and in the Midlands by 10-15 percent between last year and 2005.
The company is also attempting to increase the proportion of its UK output that it exports to the rest of Europe, from 5 percent to 15 percent.
Marco Milani, chief executive of Merloni's UK operations, said: "If the UK entered the euro, it would make life easier for us at Merloni, by a long way. But if the UK does not become part of the single currency, then this does not make Britain a bad place for us to invest in."
Merloni's main products sell under the Ariston and Indesit brands. It also took over last year the Hotpoint brand, one of the best known names in the UK white goods business. This was accomplished through a two-stage, £309 million deal to take control of General Domestic Appliances, a white goods maker formerly owned by the UK's Marconi and General Electric of the U.S.
Merloni sales in Britain last year, including imports, were about £500m, or roughly a quarter of the company's total annual revenues. Mr. Milani said that, taking into account issues such as labour rates and factory performance, "manufacturing competitiveness in Britain is as good as anywhere else in Europe".
A large part of the expansion will be in tumble dryers -atype of machine that Merloni hopes will be a particular export success - as well as in refrigerators and washing machines.
Merloni's main production operations up to now have been in Italy, while the company has also set up manufacturing units in Poland and Russia. (Financial Times)
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