Negri Bossi: “How we’ll get past the crisis”
The CEO of the Italian injection molding machine company, Eugenio Emiliani, tells Polimerica about their plan to relaunch the company.
After delisting from the Italian stock market, which as time progressed had become more of constraint than an opportunity for development, Negri Bossi is reorganizing is production and sales in a radical manner, creating greater synergies within the Sacmi Group, which today is the whole owner. The objective is to put the accounts in order by the end of 2010 in order to benefit from a future market recovery.
Markets that are beginning to show some positive signs. After an extremely week first quarter, the Italian injection molding machine manufacturer recorded a reverse to the trend during and following Plast09 in Milan, with three important contracts signed for Egypt, Poland, and Great Britain. Overall, almost ninety machines are involved, destined for the automotive and home appliance markets.
Our editors spoke to the MD, Eugenio Emiliani (photo), about the present and, most of all, the future of Negri Bossi.
How is the reorganization plan for the company proceeding?
The plan is already being implemented. Sacmi, the shareholder, has performed the capitalization to refinance the company over the last few days. The sale of the company branch dealing with large tonnage two platen presses, Bi-Power series, will be sold to Sacmi. Already today, these machines are manufactured and assembled at the headquarters of the parent company in Imola. The operation will put additional financial resources in the Negri Bossi accounts and will allow us to reduce the level of debt and to benefit from the technical, plant, and financial capacity of Sacmi in order to give our sales offering a better drive. The presses will continue to use the Negri Bossi brand, next to that of Sacmi, and will be sold through the same sales network. The third step involves the development of greater synergy among the sales offices of Negri Bossi in the United States, Canada, and France with the Sacmi organizations operating in the same markets, with the objective of greater rationalization on a group level. All possible synergy will be put in place to reduce costs, increasing customer service through larger organizations. To this end, we have signed an agreement to reincorporate technical assistance within Negri e Bossi UK, which had been separated five years ago.
For all of these operations, and considering the gains from the fiscal consolidation, we will have about € 30 million in resources that will permit us to get past the most critical phase of the crisis that – it must be said – is not hitting only Negri Bossi, but all companies in the injection molding market.
What will the advantages be on a group level?
The Sacmi and Negri Bossi sales organization abroad will become stronger, more diversified, and thus become multi-businesses. The Negri e Bossi organization in Cologno Monzese (near Milan, ed.) will concentrate on small and medium tonnage machines.
This will leave Sacmi to manage the large tonnage machines that normally also require the involvement of complex engineering and sites, where Sacmi has decades of considerable experience.
Will the reorganization also involve cutting jobs?
At the beginning of May, we reached an agreement with the union that does not call for job cuts during this year. The agreement calls for application of a special redundancy fund for one year for 69 employees, who at this time we are only partially utilizing. In May next year, based on the market trends that we will be monitoring constantly in conjunction with the internal union representatives, we will decide together how to proceed.
Once the emergency phase has ended, how will you move forward?
Once the financial resources necessary for daily business have been found, we will move forward with the policy of optimizing the product range.
At Plast, we launched a new series of Janus hybrid presses, which we will continue to promote for the next few months during three open houses we will hold in Spain, Great Britain, and Italy. The latter will probably be held already in September. In terms of production, we have invested in the plant in Cologno Monzese in order to bring the lines up-to-date. The plant in Milan will remain the main production center for Negri Bossi, and for all machining for the machines in the Sintesi series sold under the Biraghi brand.
Is the market showing any signs of recovery?
The first three months of 2009 were certainly very slow: sales were only about € 12 million, but Plast was an important turning point. The second quarter is definitely doing better, in terms of both requests, orders, and, therefore, machines sold. The problem that remains is the average price level, which in times of crisis tends to drop due to the effects of the strong competition among manufacturers. Those who buy today know that they can buy well…
As long as they have the liquidity to purchase the injection molding machine…
It is not by chance that we are working on large orders rather than on the sale of individual machines. Those who have access to credit, or sufficient liquidity, during the time of crisis are always able to cash in on excellent chances for investment.
Have your received any significant orders during the past few months?
Plast, in Milan, went very well. At the fair, we signed an order, which was already under negotiations, for fifty hydraulic presses in the Canbio series, with closing force from 55 to 1,000 tons. The order, with an overall value of € 4.7 million, came from an Egyptian company, already our customer, who works in the home appliance market. The machines, in part already delivered, are for delivery to four plants within the group. Right after the fair we received an order from an Italian company for its Polish plant. This order was for 23 small and medium tonnage hydraulic presses for the production of automotive components, for a value of about € 2.5 million. And another significant order came from an English company in the automotive market for fifteen injection-molding machines. But we have started to sell, especially after the fair, even individual machines well, and in particular the new Janus series hybrid presses for the packaging market in an interesting percentage. This gives us some hope for the future.
And in Italy?
In our country, the market is still relatively slow: transformers are waiting for better times to purchase, or are turning to the used equipment market, which is prospering at this time. The main signals of recover we can see, above all, in Eastern Europe and Great Britain, even if requests are increasing overall.
In summary, what do you expect over the next few months?
We have prepared a 2009-2010 industrial budget that calls for the complete reorganization of the company and the optimization of the product range by the end of 2010. Regardless of the drop in demand during the first quarter, we are meeting the objectives we established. I am certain that Negri Bossi, with the support of Sacmi, will succeed in getting over its financial difficulties in time to benefit from the market recovery, which we forecast will consolidate over the next year.