Arctic inaugurated a new assembly line in Gaesti last fall, following a EUR24 million investment, EUR10 million of which state aid, and the rest self-financed. The investment will create 572 jobs in 2013-2018, and the first 195 people have already been hired. Another 191 will be hired in January and the rest until January 2018, says Hasan Ali Yardimci, 42, who was appointed to run the local operations of Arctic a month ago.
“We already have 2,500 employees and will continue to hire because of the new investment in Gaesti, which increased production to 2.6 million units a year.”
If the local economy provides favorable conditions over the coming period, the company might even consider a new investment in Romania, in order to expand existing production of refrigerators and freezers or start manufacturing other product categories, the Turkish executive told ZF in his first interview since taking the reins of Arctic.
He replaced Monica Iavorschi, the 40-year old Romanian who had run Arctic for more than six years, a month ago. Arctic is Romania’s largest home appliances manufacturer and Iavorschi left it for a position of marketing manager with parent group Arcelik. Arctic’s revenue rose by almost 70%, profit tripled and almost 500 people were hired during her term in office.
Arctic’s EUR322 million revenue in Romania includes both exports and the sales on the local market, where the company sells the products made in Gaesti and in the other plants of the group.
Arcelik, which posted EUR4.4 billion revenue last year, has 14 plants in various countries throughout the world such as Turkey, Romania, Russia, China and South Africa. It bought Arctic more than a decade ago and has invested more than EUR110 million ever since, the recent EUR24 million included, the new Arctic general manager said.
“The plant in Gaesti is one of the most important for our group.”
Hasan Ali Yardimci joined Arcelik as strategy planning and business development director in 2009. He had previously worked in strategic consulting, retail and consumer goods sectors in companies like McKinsey & Co and SAB Miller.
Artic makes 600 refrigerator and freezer models in Gaesti and its total capacity is 2.6 million units. It is only using 70% of its capacity at the moment and has room for growth, its general manager says.
Arcelik manufactures Arctic and Beko refrigerators and freezers in Gaesti. Arctic is only sold in Romania, while Beko is available both on the local market and abroad. It also introduced a third brand in Romania, Grundig, two years ago, which it uses for electronics and small appliances that its other plants make.
Grundig, Arctic’s general manager says, is a premium and upper-medium range brand. The group’s strategy is to sell both local brands such as Arctic in Romania and Defy in South Africa and global brands on any given market.
The refrigerators and freezers made by Arctic in Gaesti reach 65 countries throughout the world today, the most important of which being Italy, France, Germany, Poland, Turkey and UK. Exports generate about 75% of the revenue of the largest home appliances manufacturer in Romania and still have growth potential, which is one of the priorities of Hasan Ali Yardimci.
He hopes Artic will end the year with higher revenue than in 2013, but the growth will be single-digit, driven by the domestic market, which is healthier than it was in 2013, and by exports.
The domestic and foreign markets will develop at the same time, so the executive will not provide any export percentage estimates, because that depends on the trend of the various markets the group sells its products on.
Artic has a 35% market share with all its product brands on all product segments it operates on in Romania.
“I know it will be a challenge but I think we can grow locally, too,”
The Romanian market is dynamic, converging towards the Western computer and electronics market level. It is a competitive market because the largest international companies are already there, Hasan Ali Yardimci says.
He believes that refrigerators, washing machines and stoves will remain the most important segments of the market, because there is still room for growth, since neither have reached 100% penetration like they did in the West. Smaller segments, like dryers and dishwashers, too can generate growth, he added.
Although the crisis causes the computer and electronics market an almost 50% decline in 2009-2010, the market started to recover, so sales of electronics, home appliances and computer products might exceed EUR2 billion in 2014, for the first time after six years.
Despite the state of the market, Arctic only had one year of decline and bounced back quickly because of exports. The tradition of the brand in Romania, manufacturing technologies, the investments in research and development and in the service network helped, as well, the Turkish executive says.
(English version by Loredana Fratila-Cristescu)