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UPDATE 1-Italy's Indesit eyes emerging markets as sales drop
July 24, 2013 / 6:03 PM / in 4 years

UPDATE 1-Italy's Indesit eyes emerging markets as sales drop

(Adds comments by CEO on partnership)

By Elisa Anzolin

MILAN, July 24 (Reuters) - Italian domestic appliances maker Indesit aims to find partners in fast-growing countries to counter weak demand for its refrigerators and stoves in its traditional markets, where no improvement is expected for the remainder of this year.

Fierce competition from low-cost producers prompted the company to present a plan at the start of June which envisaged cutting its Italian workforce by a third and shifting some of its Italian operations to emerging markets, including Turkey and Poland.

“The company looks a bit small, so it is time to think about some type of partnership or cooperation to make it broad-shouldered,” Indesit’s chairman and chief executive Marco Milani told Reuters on Wednesday after the publication of second-quarter results.

The plan has brought strikes and protests as the appliances industry is Italy’s second-largest employer and the company is in talks with the government and trade unions.

But the company is also looking at ways to conquer new markets.

“Our first targets are the Middle East and North Africa, but the (political) situation has to calm down in these countries before we can go there,” Milani said, adding there is no specific plan on the table at the moment.

Earlier on Wednesday Indesit reported it made a second-quarter net loss of 21 million euros, double the figure recorded in the same period last year, and forecast a 3 to 4 percent drop in revenue this year as demand in its traditional markets remains subdued and competition from low-cost producers squeezes margins.

Second-quarter sales fell 5.6 percent to 646.5 million euros and the company said it expected its debt to grow in 2013. Net financial debt stood at 520 million euros as of June 30.

“For the rest of 2013 we expect demand to remain weak and we reiterate the company’s commitment to safeguard the group’s profitability,” it said in a statement. ($1 = 0.7565 euros) (Reporting by Francesca Landini and Elisa Anzolin; editing by Tom Pfeiffer and Greg Mahlich)

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