BSH in Eastern Europe: Difference between revisions

30 eggs are a must – every country and region has its own special distinctions that an international home appliance manufacturer has to take into account. In Asia, for example, washing machines are often kept on the balcony, so it's important that there are no holes in the floor panel that would allow small animals to crawl through.[1] Customers in Turkey want large refrigerators that can accommodate entire water melons.[2] In Russia, on the other hand, where apartments tend to be smaller from the era of socialism, the preference is for slimline washing machines and dishwashers.[3] But not only that: Refrigerators for the Russian market have to offer space for 30 eggs since eggs are frequently used in Russian cooking.[4]

After the fall of the Iron Curtain in 1989, BSH turned its attention to Russia and the entire Eastern European region. Since then the region has been a focal point for expansion for the company. BSH has its own sales companies in most Eastern European countries – including the Czech Republic, Serbia, Romania and Ukraine – where it benefits from the high degree of familiarity and good image of its Bosch and Siemens brands.[5]

Gorenje began manufacturing mixers and small appliances for BSH in 1972 under the BSHG brands in the Slovenian town of Nazarje. As a result, BSH has longstanding experience in production in Nazarje.[6]

After the collapse of Yugoslavia, Gorenje broke away from its home market. The plant was also destroyed by a disastrous flood at the start of the 1990s.[7] BSH provided loans to help rebuild it. When Gorenje was unable to repay the loans, BSH took over the plant in Nazarje in 1993. Since then, small appliances have been produced there under the BSH brand names and, since 2003, also large appliances.[8]

BSH started selling Bosch home appliances in Poland in 1990, and from 1992 also Siemens appliances.[9] Two years later again, BSH opened a new plant for assembling washing machines in the Polish city of Lodz.[10] It was the first new plant to be built by BSH in Eastern Europe.[11] The company thus gained a presence in the region as a producer of large appliances, allowing it to exploit its market potential to the full.[12] The washing machines from Lodz were initially intended exclusively for the Eastern European markets, but were also extended to EU countries from 1999.[13] The cornerstone for a new assembly plant for front-loader washing machines was laid in 1996.[14] The inauguration and start of production took place in 1998.  

To mark the opening of the new washing machine plant in Lodz, Polish President Aleksander Kwasniewski sent a letter to BSH in which he wished the company every success for a profitable business and thanked it for investing in the Polish site: "I am delighted to see a modern company open its doors particularly in this city, which has been plagued by problems of unemployment, a company that not only offers new jobs but also state-of-the-art technologies and the best innovative solutions."[15]

BSH invested 30 million deutschmarks in the construction of the assembly plant for front-loader washing machines in Lodz and created 140 new jobs in the process.[16] A logistics center was also added to the plant,[17] with a dishwasher plant following in 2002.[18] This was followed in 2005 by a new plant for washer-dryers, which was also located in Lodz and created 500 new jobs.[19] The new development center for dryers and the Regional Contact Center (RCC) were opened in Lodz in 2007.[20] The RCC was part of a worldwide IT concept and was responsible for receiving and handling IT queries from around 20,000 users from five European sites, including Germany.[21]

The Polish BSH subsidiary was honored again with the "Pearl of the Polish Economy" award in 2009.[22] BSH impressed in the criteria income dynamics, sales profitability, labor productivity and debt ratio. In 2013, BSH acquired the tradition-steeped Polish home appliances manufacturer Zelmer and integrated it in 2016. "Zelmer strengthens our position in Poland and in the region," said Konrad Pokutycki, CEO of BSH Poland.[23]

BSH has enjoyed a presence in Russia since 1994.[24] The Bosch and Siemens brands are also very well known there and sell well. By 1995, BSH was already the largest Western European importer in Russia.[25] In 1997, the company then started looking into options for further involvement in Russia, including production partnerships.[26] It ultimately opted to develop its own production facilities. In 1998, BSH opened an assembly plant for gas cookers in Tschernogolowka, 60 kilometers east of Moscow,[27] making it the first home appliance manufacturer from the West to have a plant in Russia.[28] BSH defied the economic crisis of 1998/1999,[29]  with the Gaggenau and Neff brands being launched on the Russian market between 1998 and 2005.[30]

Construction of a new refrigeration plant and a logistics center in St. Petersburg began in 2007. The center not only sells locally produced appliances, but also BSH imports. The majority of the cooling appliances produced in St. Petersburg are destined for the Russian and Ukrainian market.[31] After just three years, BSH is the market leader with Bosch in the segment of free-standing static fridge-freezer combinations. An assembly plant for washing machines was opened additionally in 2012 in St. Petersburg.[32] In 2008, BSH was able to proudly proclaim that it had a base of 3.5 million customers in Russia.[33]

In 2015, the home appliances market in Russia experienced a drop of 14 percent compared with the previous year.[34] Despite the serious economic situation caused by the EU sanctions due to the Ukraine crisis, BSH has maintained its presence in Russia. According to BSH's calculations, Russia is set to become the biggest market for home appliances in Europe.[35]

The home appliance market in Slovakia is served from BSH's Czech sales company in Prague.[36]

The incorporation of the Regensburg-based Electronics, Drives and Systems (EDS) department of Siemens AG in BSH in 1998 also meant integrating the associated EDS production location for drives (engines) and electronic controllers in the Slovakian town of Michalovce.[37] At the time of the BSH takeover, there were around 930 people working at the location.[38] Since 1999, EDS has specialized completing in developing and manufacturing electronic systems for home appliances.[39]