Branching out22 February 2006
One Italian crane builder reacted to the declining European market for cranes by diversifying into other markets. Mario Girelli talks to Will Dalrymple
"We started with an idea to go away from the crane business. Prim (and standard crane brand Marte) were only in the crane business. We wanted to enter into material handling in general, and did not want to use a name not so much linked to the crane business.
"The crane business in Italy and in Europe also is not good and we need to have different possibilities to take the customers to us, so that we do not have the obligation to have to take crane projects without any margin. We will continue to produce cranes where and when there is the right margin.
"We were together with Konecranes, and we decided that we did not like the business policy of the international group. We re-bought the sales operation from Konecranes. But we still wanted to enter an international business. We don't want to compete with Konecranes or Demag directly - they focus on the crane business and the hoists. We think the best way is to take the products to the end customers. The idea is not to focus so much on cranes, but to go multi-brand."
One new business is electronic motor speed controller systems. "These controls have nothing to do with cranes. All the world has forklifts, which have a motor powered by a battery, or small machines like scooters, floor polishers and golf carts." Another is heavy logistics: "What you need to move big pieces of steel," Girelli says. "Logistics combined with cranes and trolleys on the floor, and for certain special warehouses. We will make only special solutions for heavy logistics."
How they did it
"To change the business we have changed a lot. With the electronics and logistics we have started from zero, and brought in certain experts. We changed 30% of the organisation. We moved a lot of people that were in the production of steel structures that we don't need now into engineering, parts, and marketing. The total number of people we employ is 80."
Trevolution has also opened an office in Tianjin province, near Beijing, with 20 employees, not just to sell into China, but to take advantages of its lower-cost service economy. "In China at the moment, the company produces engineering services for products that are needed in Italy. They develop the calculations and drawings. We are not a big company, and we need lots of engineering people to do a new project, and in Italy the costs of work are much more."
Meanwhile, the Prim division will continue to target service contracts under its ProntoGru branding. "We have 3,000 cranes under service, and have a plan for 10,000 in three years. In Italy for sure service activity is our big priority, and I think it can develop the rest of the business. For example an engineer going into a factory of Fiat or Iveco can do maintenance, but also there is an entry for logistics systems and the rest." The company will continue to produce its own winches.
But this is not all; the company has just finished an acquisition of an as-yet unnamed Italian company that makes straddle-carriers and travel-lifts (for boats). "We will enter directly into the market of intermodal logistics with straddle carriers, and go into competition with big companies like Kalmar and Noell."
Today 80% of the shares of the 80-year-old crane building company are owned by the Girelli family, and the rest by the managers. Mario Girelli has worked for the business for 26 years, since he was 14. He studied in the evenings until he graduated in electromechanics at 18. After work in electrical assembly, and then maintenance and installation work, he became maintenance manager. He then moved into administration, and became the managing director of the company in 1995.
"I am not so old - 39 years - not to put everything back into the company. We think that Euro 3m capital and Euro 6m equity are enough to start up with Trevolution in five years. We cannot push on the accelerator pedal because money is limited. After 2007 we will make the big jump to ask for help from investment banks."