Whirlpool was established in Slovakia in 1991. What was the strategic interest of Whirlpool in choosing Slovakia as an investment destination? Could you also give us a brief overview of the steps and achievements that marked its development since it became a full subsidiary of the Whirlpool Corp. in '94?
In November 1991, an agreement between the former Slovak company "Tatramat" and the Whirlpool Corporation was signed in order to establish a new company. Operations did not begin, however, until the company's official registration in May 1992 so in 2002 we will be celebrating our 10th anniversary! For those who are interested there is a case study available which was specifically produced for Slovakia`s economic students about the development of the Whirlpool Corporation here.
Looking back to 1988 and 1989, it was clear that state subsidies would gradually diminish. So we realized that we must do something about our production strategy, half of which was being exported to former Eastern European countries. We also understood that opening markets within Europe was our potential target as at that time our volume of production exceeded the customer demand within the Czechoslovakian market.
At first, we thought that we would be able to develop new technology and products that would be accepted by the rest of Europe by using our own resources. However, after acknowledging other companies within this sector we realized that this was not possible. Fortunately, at that time the "Velvet Revolution" occurred which made it possible for us to meet foreign partners with extensive knowledge and experience. We also understood the importance of having a brand name and access to foreign markets.
At the time of Whirlpool`s global realization, the company bought the European home appliances division of the Philips company. When we started discussing new technology developments and potential companies for capital investors with Whirlpool headquarters, "Tatramat" was one of our options.
Whirlpool essentially provided us with our management, our people with production know-how and experience of corporate culture, philosophy and teaching processes. More importantly the company gave us access to European markets.
How many expatriates from Whirlpool did you have here at that time and today how many are still remaining?
From the very the beginning, we have continually had a foreign director of production here, and over the years there were also two others - a financial controller, and a marketing strategy specialist. The first few years of working with Whirlpool was a time for change and for learning, from an expected dynamic progress to an actual steady development. The main purpose of our new co-ownership was to obtain a high level and quality of production, change in personnel thinking, an understanding of corporate culture, and to gain new technology and skills. Initially we only produced products for the domestic market, but as our people were very keen to learn, we quickly achieved the same production levels as other Western European countries.
We read that your company has invested around 35 million USD since 1992 in Slovakia, so we would like to know more about those investments, what did you actually need to improve and what were your main achievements related to those investments?
Over the years Whirlpool Corporation has invested 2.1 billion SKK, 450 million SKK of which as capital investment for shares procurement. The rest was invested into redesigning production and technology structures, and into training.
We are interested in what were your main achievements, in terms of goals for your business activities resulting from these investments. We found out that your turnover for the first ¾ of 2001 was 4.9 billion SKK. Is this figure in line with your plans, and what are your expectations for 2002?
In the year 2000, our company produced 1 million washing machines which is quite a significant number. Somewhere in the years 1994-95, when our company reached the same level regarding production, flexibility, quality, and management control as other companies, we started to use its main internal corporation advantage, meaning low cost. Since then, our company has had access to the European market, and we have proven that we have a strong and significant status among all other European companies.
What are the main countries that you are targeting with your production?
Apart from the "Poprad" plant in Slovakia we have other plants for washers mainly responsible for producing top segment products, and we are responsible for producing low and middle segments due to the market requirements. | Our main target countries are essentially within Central Europe, but countries such as in Latin America, especially Argentina are also of interest. A recent shift in demand for higher rotation speed spinning in our products calls for changes so that we can address these new market requirements, too.
What is the production figure for next year?
From the very beginning until today we have produced more than 4 million products, which shows you how we have developed. This year we expect a slightly smaller percentage than last year as we have recently started rebuilding the plant, which should be finished by next year. This will allow us to increase our production ability.
How many foreign suppliers have decided to delocalize their production alongside Whirlpool?
There are three companies that have built and are still building new capacities in Poprad and that certainly came to Slovakia and to Poprad because of us. They are mainly from Italy, making products from plastics, polystyrene packaging, concrete counter weights, and also from the Czech Republic, making the cabling for us.
We heard that you are taking part in developing a new industrial park in Poprad, which is a result of a signed cooperation agreement with the Ministry of Economy. Could you provide our readers with more details about this agreement and your expansion plans?
In Slovakia, there are ambitious intentions to build several industrial parks especially in the areas with high unemployment, that would give great opportunity to investors. State support will also be significant especially regarding infrastructure and state-owned property relations.
Over the past ten years that Whirlpool has been present in Slovakia the company has been actively preparing for a similar process. Ten years ago Whirlpool signed a land-leasing agreement with the Slovak authorities. We gradually purchased the land and used it to expand our own production capabilities and, together with our suppliers, we have been building a suppliers' base. Thus, this concept is similar to that of an industrial park, except that the construction of infrastructure is funded by our company by attracting suppliers to establish themselves in the close vicinity of final producer.
Do you think that there is space for potential suppliers to set up their businesses in this industrial park?
The suppliers which are using this area are already defined, but there is certainly room for new ones.
Within your development strategy we would like to know whether you intend to remain within your core business or to diversify your activities?
The future plans of our company are up to our strategy leaders in our head office, but my personal view is that our core business will remain our focus.
Do you believe that Whirlpool would require further partnerships or alliances with potential suppliers or expertise from various local and foreign companies, in order to develop your activities in the country?
Yes, this is absolutely true and certainly it would benefit all sides.
How do you see Whirlpool company within the next five years in Slovakia?
The Whirlpool company in Slovakia is not only a production plant. The mark Whirlpool is the most known brand on the Slovak market, and until now we have sold more than one million products. We can proudly say that every second household within Slovakia owns a Whirlpool product, and that is a serious commitment for our company and a great step forward. Our goals are to maintain and develop our client base and in terms of company development I can only say that "it would be a sin not to use the potential that we have".
What is your final message to the potential investors abroad?
Come here and we will show you that it works here!
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