Japan’s Panasonic, Daikin Invest in Post-Covid China

Japanese companies, including Panasonic Holdings and Daikin Industries, are increasing their investments in China amid the post-Covid shake-up of global supply chains.

From 2022 to 2024, Panasonic’s investment in China will exceed JPY50 billion (USD385 million), including transferring its production line of electric rice cookers to Hangzhou, the Osaka-headquartered firm told Yicai Global recently.

Panasonic will also build or upgrade more than 10 plants to produce home appliances and air conditioning supplies in China, an insider said. The Hangzhou plant will become Panasonic’s first newly-built home appliance plant in China over the past 18 years. The facility will go into operation next year to make CNY2 billion (USD296.2 million) worth of microwaves, electric rice cookers, and other cooking appliances per year.

Strategic Decisions

Transferring the production line of electric rice cookers to Hangzhou is not a recent decision as it was made after long and thorough deliberation since the Covid-19 pandemic, Tetsuro Homma, regional head of China & Northeast Asia at Panasonic Holdings, told Yicai Global.

The basic idea is to sell products where they are produced, Homma said. “We see that supply chains in China are resilient and we are willing to bring the advantages of Chinese supply chains into full play.”

Besides Hangzhou, Panasonic also produces electric rice cookers in India’s Chennai, Homma said, adding that the eastern Chinese city has advantages in policies on bonded areas, technologies, and supply chains while India has lower labor costs.

Another Japanese firm Daikin will start building its third production base in China in Huizhou, Guangdong province, next month. The new plant is scheduled to start production in August 2024 and achieve CNY7 billion in revenue per year.

Daikin’s rising capacity indicates that the air conditioning giant is confident about the potential of the Chinese market and its after-market demand, said Fei Teng, analyst at research platform ChinaIOL. “Users in the central A/C market, in particular, speak highly of Japanese products

Whirlpool production hit

Whirlpool’s production volumes took a 5% hit in Q4 because of a “one-off” disruption at an unnamed supplier that has since been resolved, CFO Jim Peters told investors Tuesday.
Peters described the firm as a “critical supplier providing a common platform of parts for multiple manufacturing locations and products.”
The issue was fixed in mid-January, but the finance chief noted that there were confidential “ongoing discussions” with the supplier, which prevented Whirlpool from sharing additional details about the disruption.Supply Chain Dive
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DIVE BRIEF
Whirlpool’s production takes a hit after supplier disruption
Published Feb. 1, 2023
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Ben Unglesbee
Senior Reporter
The Whirlpool logo is seen on a display of clothes washers and dryers
The Whirlpool logo is seen on a display of clothes washers and dryers. The appliance maker’s profits took a $100 million hit after an interruption at a key supplier. Justin Sullivan via Getty Images
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Dive Brief:
Whirlpool’s production volumes took a 5% hit in Q4 because of a “one-off” disruption at an unnamed supplier that has since been resolved, CFO Jim Peters told investors Tuesday.
Peters described the firm as a “critical supplier providing a common platform of parts for multiple manufacturing locations and products.”
The issue was fixed in mid-January, but the finance chief noted that there were confidential “ongoing discussions” with the supplier, which prevented Whirlpool from sharing additional details about the disruption.

Dive Insight:
While Whirlpool did not disclose specifics, the interruption at the supplier took a toll on the home appliance company’s sales. Net sales fell 15.3% in Q4 and organic sales declined 10.8%, which the company attributed to the supply chain issues.

The disruption, coupled with a previously announced production reduction, also led to a $100 million hit to the company’s profits, CEO Marc Bitzer said on the earnings call.

The hiccup comes after Whirlpool spent two years working to make its supply chain more efficient and resilient amid the many challenges of the pandemic era.

In that time, the company slashed its active parts from 110,000 to 70,000 to reduce complexity in its supply chain, Bitzer said. He added that in the medium-term, Whirlpool management sees a path to getting that number down even further, to “well below” 50,000 parts.

The appliance maker has also “significantly expanded” into dual sourcing, putting priority on high-value strategic parts and components, according to Bitzer.

“But we still have a tail end of lower value parts that are single source,” the CEO said. “This will be our focus in the coming months and years.”

Looking to the year ahead, Bitzer said that “flawless execution of our supply chain” is one of Whirlpool’s top operational priorities, along with “very significant” targets for cutting costs. The company is eyeing $800 million to $900 million in potential cost reductions.

The two goals are closely related. As part of the cost cuts, Whirlpool expects to remove over $250 million in what Bitzer described as “premium costs and inefficiency in our supply chain operations.”

The company also expects cost reductions in raw materials of up to $400 million, with some help from easing inflation.

Electrolux to discontinue production at Nyíregyháza factory in Hungary

Electrolux has decided to discontinue production at the Nyíregyháza factory in Hungary from the beginning of 2024. The company will take a restructuring charge of approximately SEK 550 million which will be reported as a non-recurring item affecting operating income for Business Area Europe in the first quarter of 2023.

The decision follows a review of production capacity needs including an investigation into the competitiveness of the Nyíregyháza factory, which employs around 650 people and manufactures refrigeration products. The strategic direction is to optimize the refrigeration production footprint from a cost perspective through both outsourcing and own-production leveraging Group scale.

The decision means that remaining investments in refrigeration products that are part of the earlier communicated global re-engineering investments of SEK 8 billion, which started in 2018, will be revised and redirected in line with the strategic direction of Electrolux.

Electrolux is exploring possibilities to divest the factory in Nyíregyháza and is committed to collaborating with relevant authorities and stakeholders to support its employees in the best possible way during this phase.

The cash flow impact is estimated to be approximately SEK 300 million, mainly in 2024-2025. The final operating income and cash flow effects will be determined by the exchange rate on the relevant recording dates.

EuroChef USA To Be Exclusive US Importer Of Lofra

Lofra Italy has announced its partnership with EuroChef USA as the exclusive US importer of the brand’s kitchen appliances. Lofra has been manufacturing high-quality Italian home appliances since 1956. Designed and manufactured in the hills around the city of Padua, each Lofra appliance is carefully designed and built with the high-quality standards of a “Made in Italy” brand.

Forza @KBIS


Forza, the ultra-premium Italian cooking appliances brand, spotlights its new 48-inch Professional Range Tops at the International Builders’ Show (IBS) and Kitchen & Bath Industry Show (KBIS) in Las Vegas, Nevada, from Jan. 31 to Feb. 2 with the American Gas Association in booth C2108.

“We are excited to add the 48-inch width to our lineup of professional range tops,” said Marco Guerzoni, Forza Director of Marketing and Product Development. “You can expect this handsome appliance to have the same high-quality power and radical Italian design that we showcase on each of our products.”

Ultra-premium Italian cooking appliances brand @ForzaCucina expands its range top line by adding a 48-inch model, which will be debuted at the 2023 International Builders’ Show in #LasVegas. @IntlBldrsShow #IBS2023 https://www.forzacucina.com/product-category/range-tops/

KEY FEATURES OF THE 48-INCH PROFESSIONAL RANGE TOP:

The 48-inch Professional Range Top features eight full brass burners—four front-range dual-flame burners that adjust from 685 Btu for simmering to a powerful 20,000 Btu, and four single-flame burners in the back that range from 2,200 to 12,000 Btu—for precise cooking control.
It is equipped with Forza’s continuous Infinito™ Grate System edge-to-edge cast iron grate system with an integrated bullnose – the industry’s largest continuous usable cooking surface.
It also comes with a fastback porcelain trim that provides a seamless integration into your kitchen island while increasing the usable cooking service even further for maximum efficiency.
The black porcelain spill tray makes cleanup simple while providing a dramatic aesthetic for the range top that emphasizes the brass burners, while the stainless-steel knobs with a red “racecar” stripe elevate your kitchen design.
Its bold form and style embody the soul of radical Italian design with the heart of an American muscle car, featuring unique angular racecar-inspired lines.
The new entry to the product line joins the previously released 30 and 36-inch models.
About Forza
Forza delivers dynamic Italian design with ultra-premium, professional cooking appliances. Designed and built in the heart of the famed Emilia-Romagna region in Modena, Italy, Forza appliances include professional gas ranges, dual convection electric wall ovens, professional range tops, high-performance ventilation hoods and a powerful, energy-efficient dishwasher. Forza is the American brand of parent company, Glem Gas, which has been producing high-performing appliances that embody the spirit of Italian craftsmanship for more than 60 years. For more information about Forza, visit forzacucina.com.

Arçelik Whirlpool update

During the presentation of the fourth quarter results, Arçelik communicated the name of the new company that acquired the assets of Whirlpool Emea. This was reported by the Market screener website which quotes Arçelik’s quarterly report presented to shareholders yesterday.

It will be called Beko Europe BV, it will be a company incorporated under Dutch law and will have a production capacity of 24 million household appliances a year. The 20 thousand employees (6 thousand of Beko, added to the 14 thousand of Whirlpool) currently work in the 2 Romanian plants of Beko, in the 14 plants of Whirlpool in Italy, Poland, Slovakia and the United Kingdom, in the 25 offices of the European subsidiaries of Beko and across 38 Whirlpool EMEA locations.

In addition to the brands of the Arçelik group, Beko Europe will own the Hotpoint, Indesit, Bauknecht, Privileg and Ignis brands and will have the license to use the Whirlpool brand for 40 years.

Groupe Brandt

Every 22 seconds: this is the frequency with which a cooking appliance was manufactured in Groupe Brandt factories in Orléans and Vendôme in 2022. 🎯 More than a slogan, sustainable French manufacturing is for the Brandt Group a commitment that continues in 2023 with: – Product innovations thanks to the unique know-how of their teams – Certifications and partnerships to promote French industry Origine France Garantie La French Fab – Services, tools and content to extend the life of our products:

Whirlpool not to vanish from Europe

The future of Whirlpool EMEA has been in doubt for months, and there was long speculation that the US home appliance maker would exit Europe, Middle East and Africa entirely, but the company has finally opted for a less radical solution in the form of a joint venture with arch-rival Arçelik, which is present in Europe primarily through its Beko brand.
The two firms have announced that they will transfer their European subsidiaries to a new entity to be called Beko Europe BV. Upon completion of this transaction, it is expected that 75% of the new company will be owned by Arçelik and 25% by Whirlpool. The business still needs to be approved by the responsible institutions, and the entire process of creating a new joint venture will take up to a year. Until then, the two companies will operate completely independently and without changes.
Market fears that the established and well-known Whirlpool brand could completely disappear from European stores in the event of the sale of Whirlpool EMEA will ultimately not come true. The newly formed company will have regional rights to both the Beko and Blomberg brands as well as the Whirlpool brand. And for 40 years. But he will also work with others such as Grundig, Hotpoint, Indesit and Bauknecht. The KitchenAid division is being spun off and will remain fully owned by Whirlpool.
Personnel issues and other specific steps regarding the structure and functioning of local offices are not yet known. However, the optimization and merger of branches in individual countries appear to be inevitable parts of the whole process. Both companies have so far refused to discuss the future structure in any way.

We are preparing a detailed analysis of what this change will mean for the home appliance market in Europe and here.

SEVERIN WITH KITCHEN APPLIANCE EXPERTISE

SEVERIN is exhibiting at the Ambiente consumer goods fair with a portfolio focused on innovation and kitchen expertise. The company demonstrates how filter coffee convenience can be rethought with the unique fully automatic filter coffee machine, FILKA. A new range of cordless kitchen aids opens the year of the kitchen at SEVERIN and rounds off the portfolio of the trade fair presence.


At the start of 2023, Ambiente is also returning from the compulsory Corona break. From February 3rd to 7th, 2023, the big reunion of national and international exhibitors and trade visitors will take place at the exhibition center in Frankfurt am Main. The world’s leading trade fair for the consumer goods industry welcomes the industry under the motto “Home of Consumer Goods”. As an established brand in the kitchen and household appliance industry, electrical appliance manufacturer SEVERIN will also be there again. SEVERIN CEO Dr. Joyce Gesing:

“Even if Corona has brought many changes with it, the high relevance of this platform for the industry can hardly be despised. That’s why we appreciate this opportunity to exchange fresh ideas, unique developments and a focused portfolio. We look forward to first-class discussions with our trading partners and customers and also welcome new faces to our stand.”

In Hall 8.0 at Stand A14, the Sauerland company will once again be demonstrating its many years of expertise in the filter coffee preparation segment. The innovation FILKA, a fully automatic filter coffee machine, combines comfort and enjoyment in a unique way. At the push of a button, the FILKA freshly grinds coffee beans and brews a single portion or up to ten cups of coffee in a cup, to-go mug or pot.

Ambiente follows on from the successful market launch of the product in autumn 2022. If you haven’t had the chance to experience the new product live, the SEVERIN team will be happy to welcome you with a cup of fresh filter coffee at the stand.

At the same time, the manufacturer is introducing a new series of wireless kitchen appliances. The cordless hand mixers, hand mixers and multi-choppers herald a year of numerous kitchen innovations from the brand. With them, the user enjoys unlimited freedom in indoor and outdoor kitchens. This means more flexibility in the use of the work surface due to independence from socket positions. At the same time, cables no longer block the way or end up in the food.
SEVERIN is a leading international manufacturer of intuitive, innovative and sustainable electrical household appliances. As a German quality brand with a 130-year history, SEVERIN stands for reliable and durable products that make everyday life easier for customers. With its headquarters in Sundern (Germany), six of its own sales companies in Europe and a long-standing presence in Asia, SEVERIN is globally active and supplies customers all over the world.

Low carbon steel to be used in increasingly more homeappliances: BSH Hausgeräte GmbH and the Salzgitter Groupstep up of their collaboration

Low carbon steel to be used in increasingly more home
appliances: BSH Hausgeräte GmbH and the Salzgitter Group
step up of their collaboration
/ With a 95 percent lower carbon footprint in production,
green steel supports the decarbonization strategy of both
companies
/ Use of recycled steel scrap makes a valuable contribution to
the objective of the circular economy
/ Green steel will soon be used in a variety of BSH’s large
home appliances
Salzgitter and Munich, January 16, 2023. Europe’s largest home appliance manufacturer,
BSH Hausgeräte GmbH, is continuing to drive forward the decarbonization of its value
chain using materials produced in a climate-friendly way. A Memorandum of Understanding
was signed with Salzgitter Flachstahl GmbH – a subsidiary of Salzgitter AG – to source
green steel from a new production route from 2025. The steel will be produced by means of
the new hydrogen-based production route SALCOS® (Salzgitter Low CO2 Steelmaking).
This means that carbon emissions in production will be reduced gradually by some 95
percent by 2033.
BSH has already been sourcing initial quantities of green steel from Salzgitter Flachstahl GmbH
since 2021 with a reduction in the carbon footprint of more than 66 percent. This steel is already
being used to produce mounting brackets for washing machines in the BSH plant in Lodz in
Poland.
The home appliances manufacturer is now taking the next major step to significantly reduce
carbon emissions in its value chain. BSH and Salzgitter Flachstahl GmbH signed a Memorandum
of Understanding on January 13, 2023 which provides for large volumes of green steel from 2025
for the European market with increases each year.
What is special about this green steel is the new production process that Salzgitter AG intends to
use. Together with partners from business and research, Salzgitter AG has laid the foundations The key elements are electricity from renewable sources and its use to produce
hydrogen by means of electrolysis. The green hydrogen produced will replace coal, which is still
being used at present in the conventional blast furnace process. This is made possible by direct
reduction (DR) plants, involving the direct reduction of iron ore into iron in the solid state using
hydrogen as a reducing agent. Using this technology, steam is emitted instead of carbon dioxide.
SALCOS® is thus following the carbon direct avoidance strategy to avoid the generation of carbon
in steel production as early as the production stage. Salzgitter AG therefore intends to reduce its
carbon emissions overall by 95 percent. Phillip Meiser, Sales Director at Salzgitter Flachstahl
GmbH: “We are looking forward to growing the collaboration with BSH in such a pioneering way.
The transformation toward a climate-neutral economy can only succeed as part of a network of
strong partners, who ensure that the market for carbon-reduced steel products continues to grow
steadily.”
BSH’s development and manufacturing at all its locations worldwide have already been carbon￾neutral since 2020. And the company has set itself a further sustainability target for 2030: “We
intend to reduce our indirect scope 3 carbon emissions resulting from the purchase of raw
materials and parts and through use of home appliances by a further 15 percent compared with
2018. On the one hand, we therefore always offer our consumers products that are especially
energy efficient. On the other hand, however, we also closely examine how to improve processes
over which we have no direct control – for example, the production of materials that we use for our
appliances,” says BSH Chief Operating Officer Lars Schubert. “I am therefore very pleased that we
are decisively driving forward the reduction in carbon emissions in our value chain together with
the Salzgitter Group.”
In addition to reducing carbon emissions, another positive effect of the new production process is
that an even higher percentage of steel scrap is used. “The recycling of materials and appliances
is an important future issue for BSH in order to avoid wasting resources and generating waste,”
explains Lars Schubert. “Our goal is to be ready for a circular economy.” The company therefore
also increasingly offers circular business models in which home appliances are leased or used
communally. The appliances are taken back following use, reconditioned for re-use, and recycled
in an environmentally sound manner at the end of the product life cycle. This is also in line with the
Group strategy of Salzgitter AG in terms of focusing on the circular economy