Snaige will close its refrigerators factory in Kaliningrad

The Baltic Course. Lithunian manufacturer of refrigerators Snaige made a decision on August 12 to close down its factory in Kaliningrad, Russia, Snaige reported

Manufacturing activity at this site has been suspended as of March 2 2009.

According to managing director of AB Snaige Gediminas Ceika, after devaluation of Russian rubble manufacturing at this country has become highly unprofitable.

"Despite being very hard, decision to close down Kaliningrad factory was inevitable. We do not see any positive changes on the Russian market and even after manufacturing suspension the company is each month incurring loss due to Kaliningrad factory. Such financial burden during the times of economical downturn is too heavy, as a result, the decision to close down the factory was taken," stated Ceika.

The company plans to sell Kaliningrad factory premises.

Refrigerator manufacturing equipment will be transported and used in the main and continuosly working factory in Alytus, as representatives of the company reported.

The company estimates to have 70 million litas worth losses due to failed investments in Kaliningrad.

However, after selling Kaliningrad factory premises, the company is going to raise additional financial reserve.

Currently Snaige has more orders for new refrigerators than it is able to produce; however, it is unable to increase production due to the lack of working capital.

According to Ceika, Snaige does not rule out possibility to sell refrigerators in Russia.

"Economic instability and recession will not go on forever, after reversion of current business situation we will look for ways to recover trading relations in Russian market," Ceika said.