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Although Russian appliance factories have been shut down for more than a year due to the war in Ukraine, Samsung Electronics and LG Electronics have not yet decided to sell them. Instead, they are looking at minimizing losses by renting out these facilities to local businesses.
According to industry insiders on January 29, Samsung Electronics and LG Electronics are considering leasing Russian home appliance manufacturing plants to local companies.
Samsung Electronics has a factory in the Kaluga region near Moscow, which mainly produces TVs. The company is reportedly in talks with Russian appliance distributor VVP Group over the lease of a TV production line at its Kaluga plant.
LG Electronics, which manufactures TVs, washing machines and refrigerators in the Luj region outside Moscow, is said to be in lease talks with Russian electronics distributor DNS.
Operations at both companies’ Russian plants have been halted due to difficulties in the supply of local components following the war in Ukraine. Samsung Electronics suspended operations in March 2022, and LG Electronics also suspended operations in August of the same year. By March of this year, the Samsung factory will be shut down for two years, and the LG factory will be shut down for about 18 months.
Hyundai recently sold its Russian plant to Volkswagen Russia on the condition of a re-acquisition within two years, while Hyundai has the opposite, with Samsung and LG leaning towards leasing.
This decision was influenced by the size of the Russian market. According to market research firm Mordor Intelligence, the Russian home appliance market was valued at about $11.12 billion last year and is expected to grow to $13.18 billion by 2029.
(Source: HK Image source: freepik)
