CLEAR STRATEGY

Veneto, Italy 2020 | INDUSTRY | VIP INTERVIEW

TBY talks to Armando Donazzan, President of Orange1 Holding, on maintaining market position, future acquisitions, and protecting the environment.

What strategies have been put in place to ensure Orange1 Holding is the leading European manufacturer of electric motors, foundry, and turning parts?

From the beginning, the strategy was to be the best player in the market and have a complete range of products for the business. In the first phase, from 1998 to 2008, we tried to grow internally. However, it was difficult to do this because the market where we are is competitive. We acquired CEG in 2009 and another two competitors in our market, Unielectric and Elprom, in 2011. With them, we reached EUR80 million in turnover. The strategy was clear: to acquire competitors and look at different segments so that we could offer a full portfolio to our customers. In 2014, we had the chance to acquire a company in a different sector, the die-casting business, and the first one was called Metalpres, which had a plant each in Romania and Italy. We are a one-stop shop—our main customers in the electric motors business also use die-casting parts. At the same time, during this period we bought other two companies in die-casting, and we now have four companies. We also acquired other three companies in the business of electric motors, and thanks to these companies, we arrived at EUR120 million. In the business of electric motors, we produce we produce motors from domestic applications up to wind generators and we are specialized in customized products. In the die-casting parts, we are both in the business of industrial as well as automotive, where we produce for many customers such as FCA, Renault, BMW, and Daimler with a turnover of 90 million euros. Our last division is turning parts, and we acquired a company in 2015 in order to produce precision-turning parts for different kinds of applications such as hydraulic and water pumps. That is a company that will have a turnover of EUR10 million this year.

How do you see your acquisitions evolving in the future?

We have acquired 17 companies over the past 20 years, and the next step is to reduce the number of production plants from 15 to a maximum of 7/8 in 2020 and to consolidate. We have to be quick in terms of new technology and provide great service; this means we need to meet customers' demands. Mainly, we prefer to stay with medium to small customers. We need to work on constant stock and predict what we will need as some products require eight weeks' notice. We need to be strong and efficient in such a situation.

What markets are the most important for you, and where do you want to be present?

The most important market for us is Europe, mainly Italy and Germany. Other than that, we are strong in the US, though we also deliver all over the world. In the future, we want to be more focused on other countries, but Germany and the US will remain major markets for us. These are the two countries where we want to push hard to offer our products.

Can you tell us about the company's journey toward reducing its impact on the environment?

For a company like ours, sustainability is the future. There are of course some limitations on the products we are doing because they are custom-made. We have the technology and we offer the best products that we can with high efficiency, though sometimes the main driver is still the price. We are launching new high-quality motors, I4 and I5, and this is because we want to be ready.

What roles do digital transformation and technology innovation play for Orange1 Holding?

In electric motors, we do not see any possibility in such innovation. We are still looking in the business of die-casting because there are many possibilities preparing prototypes. The strategy is to have such digital equipment to be faster in terms of developing the prototype for this business, though it is not possible for electric motors because there are some materials at the moment that are impossible to remove.

How have your origins in Veneto influenced your international profile and performance?

Veneto is an amazing area because there is a huge culture here in terms of work. Veneto is a great place not only for owners but also for the employees, who remain close to the company. Veneto is an excellent place to conduct business as one can find anything they need.

What can we expect from Orange1 in 2020?

2020 will see consolidation. I prefer to have a better EBITDA, so consolidation in 2019 and 2020 will give us a strong base to launch a new program. From 2021, we will be ready to acquire more competitors and we'll start evaluating the possibility to open our capital to new partners and within 2025 to place the company on the Milano's stock exchange. What is important for us is the marketing strategy we have done in the last four years. When we acquired many companies, we had a different name. However, we created the brand Orange1 because we felt the need to introduce the brand in the market. We worked hard on marketing and linked our brand to Lamborghini. We are one to its main partners. We are proud to say Orange1 won many important races such as 24h Daytona twice, Sebring, BlancPain European Championship. We won against all the biggest automotive players like Mercedes, Ferrari, Audi, BMW and are extremely proud of the partnership with Lamborghini. In August, Lamborghini produced 36 new HURACAN cars in the USA that were launched with our livery. This was amazing as it is a tribute of our partnership.