Vestel

Vestel is a Turkish manufacturer of household appliances and electronics, it owns the Vestfrost and Luxor brands.

Business in Russia

2024: Iran's biggest appliance maker Entekhab failed to buy Vestel's Vladimir Oblast plant due to need to spend $80 million to restart it

On September 25, 2024, it became known that the Iranian company Entekhab Group, one of the largest manufacturers of household appliances in Iran, stopped negotiations on the purchase of the Vestel plant in the city of Alexandrov, Vladimir Region. As it became clear during the negotiations, the restart of the plant, which has been mothballed since 2016, required an additional $80 million to be invested in the conversion, which became the main obstacle to completing the transaction.

According to Kommersant, negotiations between Entekhab and Vestel continued for several months, but the parties failed to reach an agreement. The Vestel plant, which specializes in the production of household appliances, was closed several years ago, and the restoration of its production facilities would require significant financial investments. Entekhab Group, despite the difficulties, is still showing interest in entering the Russian market, especially after the departure of Western brands from it, which occupied a high price niche.

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Bloomberg

Entekhab Group is the largest manufacturer of household appliances in Iran, producing a wide range of products, including refrigerators, washing machines and microwave ovens. The company owns a large plant in Isfahan, the area of ​ ​ which is 300 thousand square meters. m. However, to expand production and enter new markets, the Iranian company is looking for an opportunity to acquire production facilities abroad. After an unsuccessful attempt to purchase the Vestel plant, Entekhab Group shifted attention to other enterprises, including the Chinese brand refrigerator plant Midea located in the special economic zone "."Alabuga Tatarstan

According to a source close to the company, negotiations with Vestel were finally terminated precisely because of the high costs of restarting production. Against this background, Entekhab began negotiations with Chinese Midea on the acquisition of their plant in Russia. However, even in the event of a successful deal, the Iranian company will have to spend additional funds on the conversion and modernization of production lines.^[1]

2023: Beginning of supply of monitors to Russian companies

In June 2023, it became known that the manufacturer of household appliances and electronics Vestel suspended the resumption of production in Russia. According to the commercial director of the Holodilnik.ru Alexei Pogudalov, the brand will focus on the corporate segment.

In particular, according to Kommersant, deliveries of Vestel monitors to Rosatom, Sberbank and Gazprom have already begun. According to the source of the newspaper in the market, by June 2023, Vestel hires staff for the Russian representative office, which will work in the B2B segment.

Vestel has suspended the resumption of production in Russia and will focus on the B2B segment

OCS (the official distributor of Vestel) told the publication that the company is engaged only in the supply of equipment (monitors, washing machines, refrigerators) of the Turkish brand for retail chains and marketplaces that sell it in the consumer sector. F + tech|Marvell Group confirms that Vestel offers monitors and interactive panels in the corporate sector.

The company has good experience in the production of TVs, which it assembles in its factories. There is a demand for professional displays now, but it is still difficult to talk about the company's prospects, since it does not have any unique offer, the group noted.

The main problem with the previously planned restart of the Vestel plant in the Russian Federation is most likely that the company cannot recruit management, said a representative of the association of trading companies and manufacturers of household and computer equipment. RATEK Anton Guskov

The lines in Aleksandrov have market potential and may well be competitive, so if the company manages to find experienced management personnel, there are chances of resuming work, "he said in a conversation with Kommersant[2]

2022: Reports of a possible restart of production in Russia

In November 2022, it became known that the Turkish company Vestel could resume production of equipment in the city of Alexandrov (Vladimir region), Kommersant writes.

According to the publication, in addition to the production of its products, Vestel plans to engage in the assembly of other brands. Previously, the company produced Whirlpool, Electrolux, Zanussi and other brands at the plant.

Information about Vestel's intentions to "re-preserve production in Russia" was also reported by another source on the market, the newspaper notes. However, according to the expert, the Turkish company can sell capacity to one of the domestic manufacturers.

2021: Revenue of 1.4 billion rubles, net loss - 82 million rubles

According to SPARK-Interfax, Vestel-CIS LLC was registered in 2002, and in 2021 its revenue amounted to 1.4 billion rubles, and a net loss of 82 million rubles.

2019: Discussion of the restoration of the plant with the Governor of the Vladimir Region

Vestel has had attempts to re-launch its production in Russia. In 2019, the Governor of the Vladimir Region Vladimir Sipyagin met, according to the local gazetanga.ru portal, with Turkish Ambassador Mehmet Samsar. The audience discussed, as Sipyagin said, "the development of enterprises with Turkish capital already operating in our region, including the prospects for restoring production of Westel-CIS LLC."

2016: Plant closure after political conflict between Russia and Turkey

In March 2016, Vestel CEO Turan Erdogan decided to close the Russian plant and take away the equipment. According to Erdogan's official statement, the freezing of production is a consequence of the economic crisis in Russia. According to market participants, the plant had to be closed for political reasons. Recall that in November 2015, a Turkish fighter shot down a Russian bomber in Syria.

However, Vestel-CIS LLC continued to exist.

2013: Production of 1 million TVs, 350 thousand washing machines, 500 thousand refrigerators

The company reached the volume of production of 1 million LCD TVs per year in 2013. By that time, according to Kommersant, the plant began to assemble washing machines - 350 thousand per year, and refrigerators - 500 thousand. Vestel provided more than 1.2 thousand jobs in the Vladimir region.

2005: Restoration of the plant after the fire

In 2005, force majeure prevented big ambitions. The entire factory was engulfed in fire, the plant was almost completely destroyed. However, the Turks restored it and launched production again.

2003: Alexandrov Plant Launch

In 2003, the company launched its plant in Alexandrov, investments amounted to $40 million. In the first years of operation, the manufacturer set a goal to collect 1 million TVs and occupy 12% of the corresponding market in Russia.

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