Several divisions, one ambition ZML Industries

SEVERAL DIVISIONS, ONE AMBITION

Mr Bordin, CEO of ZML Industries SpA, talks about the recent developments and the future of this aluminium, cast iron and copper wire company. Barbara Rossi reports.

The roots of ZML Industries SpA go back to the late 1960’s, when the company started manufacturing components for the household appliances industry. ZML, started by the Zanussi group, was acquired by Electrolux in 1984 and then in 2002 a further ownership change took place with ZML being purchased by an American investment fund. Finally, in 2006, ZML was wholly acquired by Mr Valduga, head of the Cividale group, whose core business is steel production for the oil and gas sector, and which employs 1500 employees and has a turnover of €360m. The Cividale group is presently led by the heirs of Mr Valduga, the Valduga and Bernardino families.

Since 2002, ZML has increased its diversification, especially towards the automotive sector. Nowadays ZML Industries SpA, which has 580 employees and a turnover of €167m, is subdivided into three divisions: aluminium, cast iron and copper wire. Currently the activity of the aluminium division is entirely for the production of components for the automotive industry, supplying all major European car manufacturers, with about 70 per cent of this production for the car industry and the remaining 30 per cent for industrial vehicles. The cast iron division is more diversified, with 45 per cent of its products supplying the automotive industry, 40 per cent the household appliances sector and the remaining 5 per cent the mechanical industry. The copper wire division production is channelled towards the automotive industry for 60 per cent of its output and the household appliances for 40 per cent.

The global crisis hasn’t affected the company as badly as it affected foundries working for other sectors, and the ZML product quality has meant that the company has been retained as a supplier by clients, even during the difficult economic times. In addition to this, in production terms ZML has very quickly recuperated from the recession.

A time for new projects

All production takes place at one site, where ZML has a large 300,000m2 plant, divided into three separate factories. Now the company is reconsidering a pre-crisis project, which had been temporarily put on hold and which will require considerable investments, consisting in the creation of a new €12m cast iron production line. At present ZML is the Italian leader in cast iron and the purpose of this project is not an increase in production volumes but an optimisation of production costs and a widening of the range of products offered, especially in terms of new materials, in order to allow ZML to be in the best possible position in comparison to competitors in other countries, such as Turkey, Spain and Germany. This investment will allow ZML to add spheroidal cast iron to its current grey cast iron production. This is particularly important as this new type of cast iron is able to offer a performance similar to that of steel and therefore is in demand from not just the automotive industry but increasingly also from the household appliances sector. This new line will be ready by spring 2012.

Investment will also be directed at the copper wire division, in which the company doesn’t cast copper, but cuts and enamels it. In view of the fact that copper prices are at their maximum historical value, clients are increasingly interested in substitute materials. For this reason in the last two years ZML has developed and introduced in its range of products enamelled aluminium wire. The second tranche of the aluminium wire production should be implemented within the year.

The aluminium division will not undergo significant investments and will mainly be concerned with developing new product design with clients, but logically there is the intention of keeping up with the market in terms of new products.

Research and development is carried out by internal technicians, aided by external universities, such as Trieste and Padua. ZML holds regional and ISO certifications, such as ISO/TS and ISO 14001:2004. Furthermore it is working towards shortly becoming OHCS 18001 certified. All the new production lines will be at the cutting edge environmentally as well as productively. The company has important achievements to be proud of in the environmental field, such as having halved its water consumption in the last three years, with the objective of

Ferrous and non-ferrous waste trading – industrial demolition Active in reclamation activities for 80 years – materials selection and recycling

The De Anna company has been operating for 80 years. Set up in 1930, the company has acquired a leading position in its fi eld, working in all the Triveneto area. Thanks to the experience gained, the company is able to offer skilled services, namely ferrous and non-ferrous waste storage, industrial scrapping, waste collection and transport with own means, container hiring, and land reclamation and environmental cleaning services, available to small, medium, and large fi rms.

Its collection and storage centre is one of the largest in the Pordenone area and is even able to collect large quantities of materials, which then undergo a selection, sorting and volume reduction, to then be delivered to companies which carry out recasting. All activities are carried out in compliance with work safety regulation and current environmental protection laws.

DE ANNA AMBROGIO SNC Viale Venezia 123 - 33170 PORDENONE - Italy Tel.+39 0434 541518-541164 - Fax +39 0434 537053 - E-mail: info@deannaambrogiosnc.it

lowering it by another 30 per cent in the next two. The ultimate objective is that of a nil waste policy, with consumption reduced to a minimum. ZML subscribes to the European Foundation for Quality Management excellence model (EFQM), seeking to implement the best possible practices at various in-company levels. ZML’s intention is that of eventually reaching level 5 of EFQM, the highest level. So far 70 people have been trained and 4000 hours of courses have been implemented to this purpose.

The future is in export

Export markets are crucial to the company’s activity, with 70 per cent of output exported, mainly all over Europe (98 per cent of export) and on a smaller scale to South America (2 per cent of export). Export has been growing since 2006 and now foreign markets, especially in German-speaking countries, are very substantial. This is partly due to the fact that ZML, based near Pordenone, in the Italian north-eastern region of Friuli Venezia Giulia, is geographically close to them, making their supply easy in logistical terms, but also the fact that in the post-economic crisis era foreign markets are growing at a faster pace than the Italian market is having a bearing on this. Specifically 80–85 per cent of aluminium production is for export, along with 65 per cent of the cast iron output and 65 per cent of the copper wire produced. Export could grow by another 10 per cent, for the reasons previously mentioned, but also because of the shorter payment terms encountered outside Italy.

ZML has no intention of diversifying its core business to other market segments, but wants to widen the range of products on offer which could, as in the case of the new cast iron line, bring new clients. The company plans to optimise its activity, without necessarily searching for large volume growth, requiring substantial investment. However, as Mr Bordin pointed out, times of crisis may also bring new opportunities, especially in the steel and cast iron sector, therefore future acquisitions could be possible. n