INNOVATION AND ETHICAL VALUES AS DRIVERS OF OUR CONTINUOUS GLOBAL GROWTH

Spotlight: interview with Angelos Papadimitriou, CEO of the Coesia Group and of of G.D SpA

by Jonathan Salem Baskin

You have been CEO of the Coesia Group and G.D since 2010, moving to the automated machinery sector after nearly 20 years in the pharmaceutical industry. What impressions have you formed during this initial period in Bologna, running the Coesia Group?

First of all, I must say that I feel very fortunate to have entered the machinery manufacturing industry at this moment of general change and acceleration of global economic events.
I must also say that even though the pharmaceutical and mechanical industries are very different, I can see many similarities: for example, the key role played by innovation for both. Today more than ever. This is not least because clients have become increasingly demanding and today it is no longer possible to offer a product that is not clearly differentiated by innovative factors. Another similarity is the need for a global footprint. We can't act simply as products distributors; we have to understand consumer trends in detail, how client needs vary according to geographic areas, and also to have manufacturing expertise and technical facilities in different regions of the world.
Nor should we forget that today in all sectors - even those that have traditionally been considered the most lucrative, such as pharmaceutical and some segments of the mechanical industries - enormous importance is attached to the adoption of business models that foster operating efficiency and simplification.
In fact, innovation, a global footprint and efficiency are commonly pursued by many industries, including the pharmaceutical and mechanical ones.

Coesia is a highly diversified Group made up of 12 different companies: can you tell us about the Group's sector strategies?

Coesia is a Group of companies offering innovation-based industrial solutions that operates globally and is headquartered in Bologna, Italy.
Automated making and packing machinery account for more than 90% of our business. As far as our sector strategies go, Coesia operates in four high value-added industries which demand high technological expertise and service oriented players.
Coesia's main business is the manufacture of machinery for the Tobacco industry, where G.D holds a long-established leading position. More recently, Coesia has set up a division for the Health & Beauty industry, comprising seven companies operating in pharmaceuticals, consumer healthcare and cosmetics, which today accounts for 15% of the Group's turnover. In addition, more than 20% of Coesia's turnover in the Consumer Goods industry is made from the manufacture of making and packing machinery for food and beverages, confectionery, household and personal care and hygiene disposables. Finally, I wish to mention the Aerospace & Racing industry served by our company Cima which produces high performance power trains and gear transmissions.
In recent years, Coesia has invested not only in the automated machinery sector but also in advanced quality inspection and printing systems for the pharmaceutical industry, by acquiring two leading companies, the German company Laetus and the Swiss Hapa.

Can you tell us about the Group's goals and ambitions for the coming years, in view of the challenges posed by the current global economic situation?

2010 was a highly satisfactory year for us, as can be seen in the total Group turnover, which topped the €870 million mark, with a growth rate of 9% despite the volatility of the markets.
The Group's objectives make it possible for us to envisage a further growth phase wherein we intend to latch onto certain major market trends.
One of these is the growing demand for general health services, where our division catering for the Health & Beauty industry is a strong player. In addition, demographic dynamics and the related changing consumer needs lead us to expect a significant growth in the demand for Consumer Goods, especially in the areas outside North America and Western Europe.
We also expect an increase in the production of machinery for the Tobacco industry, based on consumers' continuous need for value creation and the ever-growing importance of operating flexibility and efficiency. As you know, we hold a strong technological leadership in which we will continue to invest.
In addition, I wish to mention Cima which operates in a high value-added niche. Cima is one of the most well-known makers of power trains and gear transmissions in the world. Its specialisation has allowed us to enter the Aerospace industry, where we can offer distinctive high-performance applications, while in the Racing industry we have long established experience as suppliers of sophisticated high performance gear transmissions for Formula 1 and luxury super cars.

Finally, we will continue to invest for growth by strengthening our leadership in strategic sectors, thus following and supporting the expansion of our major clients.

Which strategies and actions will ensure that you achieve these goals?

We have established five strategic pillars for the Group. The first is the focus on innovation, made possible by significant investments in Research and Development, amounting 5% to 6% of turnover. The second pillar, and therefore the second major strategic activity, is the continuous strengthening of our global footprint. Currently 40% of our turnover is generated in Asia, and roughly one third in Western Europe (with Italy accounting for less than 4%).
Our global presence is a vital asset for us, and we can already count on 29 manufacturing facilities spread over 12 different countries.
The third pillar is an active M&A strategy. Taking advantage of our positive financial situation, we intend to strengthen both our leadership in some industries and the Group's global presence.
The fourth pillar is our continuing emphasis on operational efficiency. Today, being efficient is key to being competitive, and consequently our approach to purchasing policies, information systems and monitoring the performance indicators of the Group's companies is focused on efficiency and simplification. This is a key strategic priority: one that offers the Group a guarantee of medium-to-long term structural stability and that makes it possible for us to achieve a long-term sustainable growth.
However, I believe that the fifth pillar is indeed the most crucial of all, the one which sets everything in motion…

And the fifth pillar, the central pillar: what is that?

The fifth pillar is our people: our aim is to attract, develop and retain the "Best Global Talent". Talented people work with us in every continent around the globe and my own leadership team can boast superlative talents from various countries.
As a company we devote significant resources to ensure the services of the best talents. We are boosting our training programmes and our management development projects in order to create a dynamic global environment where the best performers are recognised and can make the most of their expertise within our Group.

During the Coesia meeting in Stresa you underlined the concept of Value Based Leadership: can you explain its principles?

We've just been talking about the importance of talent. I see the following process: talented people are inspired and attracted by companies whose values they understand and share.
Coesia's values are part of its DNA, deeply rooted and consolidated over time. They are simple and universal values and yet immensely powerful: Respect, Responsibility, Knowledge and Passion.
The multinational companies that stand in the forefront of modern management often refer to the principle of Value Based Leadership. This principle establishes a kind of ethical compass which makes it possible for an associate - who has assimilated it and experiences it on a daily basis - to know what is the right thing to do in any given situation, without having to ask. Knowing the right thing to do, showing individual leadership; this can be achieved in a much stronger, more independent and dynamic way when precise values are part of a shared heritage of knowledge. And this is especially true for industries and companies, like Coesia, for which the competitive advantage is based on knowledge, generated by motivated, competent and intellectually independent human capital.