Iran’s largest household appliance manufacturer, Entekhab Group, is in talks to acquire a refrigerator manufacturing plant in Russia’s Tatarstan, owned by Chinese brand Midea Group, Russian daily Kommersant newspaper reported on September 25.

The deal follows Entekhab Group’s unsuccessful negotiations to purchase the Vestel plant in Russia’s Vladimir region earlier this year, where an additional $80mnn would have been needed to retool the mothballed plant.

The Iranian firm is now focused on Midea Group’s facility in the Alabuga Special Economic Zone (SEZ), which has the capacity to produce 350,000 units annually.

"In addition to refrigerators, washing machines and other built-in appliances will be manufactured there, whereas in Alabuga, it is only possible to assemble refrigerators without doors, as this component is not manufactured in the Russian branch," a Russian source said the paper.

The financial terms of the potential deal were not disclosed. IntelliNews reached out to the Iranian company for further information, but they have not responded. 

According to sources close to the talks, Entekhab Group’s move into the Russian market comes as the company seeks to capitalise on opportunities created by the exit of Western and Chinese appliance brands from the region.

Entekhab Group had previously considered other major plants, including those of Samsung and LG, before shifting its focus to Midea’s facility in Tatarstan.

Midea Group launched the Tatarstan plant in 2020 in partnership with Continent Production Solutions LLC. However, the Chinese company withdrew from the capital of the Russian factory this year as it shifted its focus to building a new facility in Belarus.

Midea’s Tatarstan plant will require retooling if Entekhab Group moves forward with the acquisition, according to industry insiders.

According to another Kommersant source among top managers of a large retail chain, the Chinese Midea withdrew from the capital of the Russian factory this year, as it began construction of a new enterprise in Belarus.

“Entekhab Group’s entry into the Russian market presents one of the few opportunities for the company to expand production,” said a representative from Marvel Distribution, a supplier of electronics and home appliances.

“If Entekhab Group can deliver appliances at the right price-quality ratio, it could establish a new market foothold in Russia.”

"Considering that Iran has long been under international sanctions, Entekhab Group's entry into the Russian market is one of the few opportunities for the company to expand production," a distributor representative believes.