Italy has for many years been seen internationally as an epicentre for all that is stylish, not to mention expensive. Its fashion industry from Versace to the local bespoke tailor is known for superb craftsmanship. Switch to the potentially less aesthetic, such as the manufacture of items mechanical, and the picture has been less than rosy. Steve Thomas-Emberson climbs into top gear
Despite vast sums of money being thrown at it, Ferrari simply could not get anywhere near winning the Formula One World Championship. The car industry seemed to be the beacon by which anything mechanical was judged.
Fast-forward to today and it is a totally different picture, the most stylish cars are key as always but now with both performance and reliability.
In truth, reality for Italian mechanical manufacturing lies somewhere in the middle and none more so than in the packaging machinery industry.
It is an industry devoid of government assistance, quietly getting on very nicely.
‘Getting on’, that classic British understatement, actually means it is, fabulously vibrant. What manufacturing business in Europe has such an insignificant home market that to export is not seen as the icing on the cake but the fundamental economic issue of the entire industry! And the packaging industry is the business.
Some of the companies quite literally export up to 97% of their total output, making them not only a major player globally in the supplying of packaging machinery but also a significant Euro earner for Italy itself.
The industry has had a long history of double-digit growth and it is only over the last few years that this has settled at 5%, which in any global industry is astonishing given the recent economic climate.
Where business size and performance are concerned, in 2002 there was a growth in turnover of 5% to a figure of EURO2.84bn. This was actually up from 2001 where it had only a 4.7% growth figure.
It is no wonder that UCIMA’s president Dr Guido Corbella stated that he “believed that Italian manufacturers should be pleased with the results of the year that has just come to an end.” Exports were up 3%, with Russia having a 56% growth in Italian imports during the period January-September 2002.
Russia was closely followed by China, which has been importing Italian machinery on a growing scale since 2000. While this is phenomenal growth in a turbulent time, what of this year and how are future challenges going to be met?
Dr Corbella gives an air of quiet confidence: “I can say that for the present time for packaging machinery I am very positive. There are two underlying factors. Firstly, in 2002 we had a 5% growth in turnover and for 2003 I believe it will be the same. Orders are still strong with a backlog.
“Secondly, our strength is that Italian packaging machine manufacturing was born for a global niche market and was not born to serve the home market. Even the very small companies export world-wide and are very strong in specific niche packaging markets. Some companies export more than 95% of their total output.
“Competition is growing so profit margins are being reduced but we view this and the markets we operate in as a natural challenge. Pharmaceuticals are tremendous for us and this sector is growing very fast. Beverages is another niche area with good growth and even food packaging is still quite buoyant.”
Corbella’s overview is confident but what of the long-term position for the Italian packaging industry? Here his optimism again shines through: “I am optimistic and there are many reasons to back this up. Countries need more and more materials to use as a marketing tool for selling. This is important.
“The customer now wants more and more information on the pack and the pack must perform so this is another positive element. Some of our export markets will grow more than others but as we are and have been totally focused on exports since World War II, it is part of our culture. We have for instance now opened an office in Shanghai without government help. It is a UCIMA operation. China and Russia are very important to us so we have contacts in Moscow to aid our export initiatives. It’s hard work but it is also both positive and interesting for the Italian packaging industry.”
The mention of the culture within the Italian industry throws up an interesting question. How did the industry come about? Mr Parini, chief executive officer of Corazza, explains an interesting scenario: “Exports are very high in the Italian packaging industry because between Milan and Bologna there are a lot of mechanical companies that after World War II had to look to produce something else.
“Their markets had either gone or been closed down. It was natural for them to look at markets outside of Italy. Bologna was a leading city in the manufacture of silk so the people already had the knowledge of mechanics and engineering so turned to being producers of packaging and machinery.
“Italy’s education system also helps to provide trained young people because of the way it is set up. There is a high school for electronics and mechanics, another for the sciences and then arts and literature. This means that between the ages of 14 and 19 students start their specialisation so, when they leave for industries like packaging machinery manufacture, they are well versed in mechanics which is ideal for us.
“This specialisation also carries on into the university systems so we have the whole practical and theory elements to draw on. As an education system and structure it has barely changed for over 150 years.”
As a manufacturer of automatic packaging machines, Corazza is also an important part of the developing industrial culture of Italian packaging. It is a member of the Sympak Group, a holding company that owns a variety of specialised packaging companies.
Corazza itself specialises in processed food packaging solutions and, specifically, processed cheese and soup/herb cubes. Parini takes up the story: “We are actively involved in world-wide markets in the provision of totally integrated systems for cheese and soup/herb cubes.
“Our home market is 5%, the European marketplace represents 40% and the remaining 55% is world-wide. As a result of this type of commerce we have been able to set up secure finance methods such as letters of credit or guaranteed bonds that are then discounted.
“Outside of Europe, we are exporting to countries such as Poland and the former Balkan States as well as to North African countries like Morocco, Egypt, Tunisia and Algeria. These markets are interesting because they have come about either by local entrepreneurs or the setting up of subsidiary companies by global packaging machine manufacturers and producers, often after closing a plant in Europe.”
Corazza’s main machine thrust is in innovative concepts for continuous motion pack machinery. Speed, although important, is not the pre-requisite. It has also been able to develop modular machinery to allow flexibility for the client and to promote ease of maintenance and an open interface with the product.
“As well as selling the machines we now have to provide a total management situation which is not always an easy task to perform. We all have to get used to it because it is the global trend,” Mr Parini sums up.
The Italian machinery group IMA has for a long time now majored on the pharmaceutical packaging industry.
It is also the world’s largest supplier of tea bag packaging machinery.
One of the most significant of IMA’s many ‘wings’ is its solid dose division which is able to supply tablet pressing, capsule filling, granulating, coating and checkweighing systems.
The new Imatic 200 high speed, rotary, continuous motion capsule filler is capable of filling up to 200 000 capsules/hr. While this machine is capsule orientated there is an equally impressive model for table pressing.
The Kilian Synthesis 500 features IMA’s Comprima tablet press. The use of special seals and silicone bellows means that the mechanical and compression areas are completely separated and sealed off to prevent produce penetration into the lower compartment of the machine oil.
This means ‘black spot’ free tables and no risk of cross contamination between different batches. These, alongside all of the blister packing equipment, shows that IMA does not stand still.
Moreover, the methodology that it takes in order to promote itself in the global marketplace is exemplary. As part of the group’s 40th anniversary it had put together a working display of over 50 individual machines, many of which were integrated into complete production lines.
Seminars and group get-togethers backed up this show for over 1000 invited guests from all over the world.
Another Italian company – PRB Packaging Systems – has in 20 years built up a reputation in end-of-line packaging machinery based upon the small footprint of its technology. “Innovation enables us to maintain an international presence,” explains chief executive officer Mr Caffarelli.
“We export 80% of our packaging machines. Listening to our clients helps us to develop our product range according to marketplace needs. For instance we have stopped thinking that speed is the most important criteria although efficiency is key.
“PRB is developing machines that are inherently user friendly, easier to manage and flexible as well.” A good example is our Uni-pocket range. With this goal comes the client’s desire for a small footprint and we excel at this. It is our mantra.
“We do unfortunately live in unsettling times but I still believe that this year we will see a 3.5% growth for PRB. The year will be one of consolidation.”
It is becoming hard to see what market flexible pouches will not end up in! Surveys have suggested that, since 1994, global demand for stand up pouches has been running at 21% a year. This trend will bring the global consumption of stand-up pouches to around 11bn.
It is in this field that Gualapack SpA has established itself. Since 1998, when the licensing agreement for Cheerpack production and trade was signed with Japanese company Hosolawa Yoko, Gualapack has been producing pre-made flexible containers as a packaging solution.
The Italian culture of looking towards exports is amply demonstrated by the company’s own 48-hour guaranteed service assistance for the whole production process. Add on the flexibility to rent or buy and ‘just in time’ logistics, minimising storage costs to the customer, further enhance the export offer.
The paradox lies in pack design. “Italian designers are 50 years behind the UK,” says Italian packaging design expert Marcello Minale. “While Italy exports almost all of its packaging machinery it imports the best of branded pack design,” says Mr Minale.
“Traditionally, pack design has been done by Italian advertisers and not very creatively at that. All the FMCG products look the same. Consumers in Italy believe that goods from a corner shop are of better quality than products found in the large stores.
“Italian product companies that wish to export have to invest in the very best of international branded pack design and for that they come to the UK.
“Illy Coffee is a good example. We had to rationalise the packaging into its core components and then elevate the packing as the Champagne of Coffee for a world-wide audience. Its strong links with art were also taken into account.”
While coffee can be branded as an indulgence, Parmalat – one of the biggest dairy companies in the world – could be determined dull. This is precisely what London-based Design Bridge faced. The pack was tired.
The answer lay in using Parmalat’s existing corporate identity in place of the more complex Parmalat deserts logo. Moody photography and a cleaner, simpler pack together with more contemporary type were combined to elevate the packaging and bring it up to date.
Such are the packaging design opportunities in Italy for companies such as Minale Tattersfield and others, these companies have specific Anglo-Italian packaging design teams. As for the machinery manufacturers and suppliers, the recent ‘local difficulty’ has certainly not dented their enthusiasm for exports or the industry’s long term potential. In short they are surprisingly upbeat. How refreshing!