Hot topics

Slovenia Business Week no. 36/2004: Gorenje Has Big Plans for Latest Investment in Serbia

Household appliance manufacturer Gorenje has recently acquired 5.7 hectares of industrial land in the Serbian city of Valjevo

Household appliance manufacturer Gorenje has recently acquired 5.7 hectares of industrial land in the Serbian city of Valjevo, the second production location outside the company's seat in Velenje after the Czech Republic. Works will start in the autumn, distribution for the wider region will start in the first half of next year and production by the end of 2005, Gorenje CEO Franjo Bobinac told the business weekly Finance.

According to Bobinac, the production of cooking appliances has been rounded off with Mora Moravia (a Czech company Gorenje acquired recently), and the production of the refrigeration programme with the investment in Valjevo.

Nevertheless, the production of refrigeration appliances could also be set up elsewhere in Eastern Europe. "For now, one of the big alternatives is certainly Russia," he stressed, adding that this would optimise the number of production locations.

The company opted for Valjevo for a number of reasons, but foremost because the Serbian market is of strategic importance, it is close and they know it well.

"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 organised distribution centre there," said Bobinac, who also pointed to the cheap labour in Serbia. The savings will be quite significant, he added.

The production facility, which will require an investment of EUR 12m in the first year alone, will be financed with own sources and loans. These funds are part of the planned investment policy and the company's debt will not increase beyond the present level, he stressed.

In addition to its core business of manufacturing household appliances, Gorenje has also been making inroads into the energy sector.

According to Bobinac, Gorenje has already entered the bid for the privatisation of TE-TOL, the Ljubljana steam plant and heating station, but it is also interested in other energy facilities for the production and marketing of electricity.

Gorenje is also keeping an eye on tenders in countries of the former Yugoslavia, he said.

Source: Slovene Press Agency STA

Author: Branka Murn