Merloni, a talent for simplicity
A young company, one of the first three in Europe, Merloni Elettrodomestici SpA has innovation drive and the ability to interpret current trends effectively. “Home powering comfort”, on-line and digital technology, teleassistance, services solutions: these are the bywords for remaining one of the leading three in the future too, whether global or continental. “For us enamel is an important communication medium.
The range of colours is an element which differentiates geographical areas and market segments”, declared the President, Vittorio Merloni.
The development and spread of electrical household appliances represent one of the most evident and useful ways (together with that of cars obviously) of tracing and analysing the changes which, since the sixties to date, have typified western society. Radical and increasingly rapid changes, both in terms of production and products. Changes ready to speed up further, thanks to electronics and new technologies. Italy in particular has been a leading player in the film on the development of the sector of household appliances, above all thanks to certain firms. Merloni is definitely one of these, and it is indicative that it has more or less the same age as the “household appliance phenomenon” in Italy.
Among its talents prominence has definitely been given to that of simplicity or, better still, the ability to simplify, i.e. to translate into simple concepts the most complex phenomena, to tackle them better and sooner than the competitors. This talent is readily and easily apparent in the interview with the President.
Q: We would first of all like to ask Vittorio Merloni to present the company Merloni Elettrodomestici to us.
“The company is 25 years old and is the youngest in the sector, one of the leaders. During this time it has grown to become the third-ranking European electrical household appliance producer. To gain a leading position we have
always had to be innovative: in the
seventies we introduced Uniblock, the cooker, sink, fridge and dishwasher block which solves the problem of small kitchens; in the eighties OSA, which enabled appliances to be produced as modular, such as Lego; in the nineties the technology which changed not only the design but the actual working of the products, from Margherita Dialogic to on-line appliances.
Other important landmarks have been the listing on the stock exchange in 1987 and the acquisition, at the end of the eighties, of the Indesit brand and the French Scholtès. During those years we started to expand towards the Eastern European countries, which led to the takeover, last year, of the largest Russian producer of household appliances: Stinol.
Nowadays we have a turnover of 3,070 billion, over 12,000 employees throughout Europe and 12 plants in Italy, France, Turkey, Poland, Portugal and Russia, where we produce 8 million appliances a year”.
Vittorio Merloni was born in 1933 in Fabriano (Pesaro) where his father Aristide, starting with the production of scales followed by cylinders for liquid gas, created a new industrial zone.
A graduate in economics and business studies, in 1960 he started with his brother Francesco to deal with the start-up of Industrie Merloni in the area of electrical household appliances (water heaters and cookers), adopting the single-product plant model. At the same time he created the Ariston brand, making it a success in the whole of Europe.
Vittorio Merloni is chairman of Fineldo Spa, a holding operating in the following sectors: consumer goods (Merloni Elettrodomestici and Benelli), engineering (Merloni Progetti), energy (MP energy), financial services (Cofiri Faber Factor and Credito Agricolo e Industriale) and entertainment (Panini and Cinecittà Servizi). He is chairman of Merloni Elettrodomestici SpA, of Merloni Progetti, which has built industrial plants worldwide, and MP Energy, which produces electricity.
From 1980 to 1984 he was chairman of Confindustria [Italian industrialists’ association], of whose executive he is currently one of the best-known members. In 1985 he returned full time to entrepreneurial work, taking majority control of Merloni Elettrodomestici. In 1989, with the fall of the Berlin Wall, he launched strong expansion towards Eastern Europe. In 1995, in a joint venture with Foster Wheeler, he set up Centro Energia, a company for the management of electricity power plants. Under the leadership of Vittorio Merloni, Merloni Elettrodomestici has grown by 20 times in twenty years. Awarded a “captain of industry” award in 1984, he was a member of the board of governors of the Harvard Business School of Boston from 1981 to 1994.
He is currently a board member of Censis, of Fondazione Aristide Merloni and of the “Il Sole 24 Ore” publishers. He is member of the advisory board of the Bocconi University in Milan, and Società Farmaceutica Eli Lilly of Indianapolis.
Vittorio Merloni confirms his role as leader in the economic and social world of Merloni Elettrodomestici through a reduction in consumption, compatibility of factories with the environment, the use of environment-friendly substances and the contribution to regional development of the Marches, where the first companies were set up.
He often quotes his father Aristide in saying: “in every industrial scheme economic success is worthless if it isn’t matched by social progress efforts”.
Q: What is the current picture in the electrical household appliance sector?
“Up to now it has accelerated. To win you need a clear vision of the road to take. For us the vision can be expressed in a concept: “home powering comfort”. The home is therefore our frame of reference: over past decades appliances have liberated women from drudgery, over the next ten years on-line devices and digital technology will improve domestic comfort even further. There will be new services such as teleassistance, and it will be possible to pay only for the use of appliances, according to the energy consumption, like the pay-per-view of digital TV.
Nowadays we are already part of the homes of European families to whom we offer increasingly comprehensive and customised solutions, also through a new services brand which we have called Solutions. Services are to represent the challenge of coming years”.
Q: What does porcelain enamel represent for Merloni Elettrodomestici on this scenario?
“We use porcelain enamel in the cooking sector. We have always considered its aesthetic value as an important communication vehicle due to the
brilliancy, resistance and durability transmitted by the product and its easy cleaning, qualities perceived as positive by end users.
Our favouring of enamel is confirmed by the fact that in the cooking sector, over 10 years, we have tripled the colours available in the range using their specific features as a diversifying element of products on a geographical and market segmentation basis”.
Q: What do you ask of systems and enamel producers?
“In order to maintain or increase competitiveness in respect of other coatings the enamelling technology must continuously guarantee high flexibility, high quality and high productivity at low running costs, via a process of sheet metal processing and enamelling which is as rugged, streamlined, effective and simple as possible.
For this reason we demand innovation potential and close cooperation from the various producers, with a view to an extensive and tangible partnership and products which are increasingly environment-friendly and with increasingly high performances”.
Q: What marks do you give C.I.S.P.? What do you feel its role should be today?
“Personally I feel”, replied Mr. Merloni, President, “that C.I.S.P., with its work of over 40 years, has successfully represented, safeguarded and promoted the needs of an important industrial sector, active in a primary country such as Italy, which currently represents more than 50% of European production of enamelled products in the area of white goods. In an increasingly global economy, associations must play a primary role for all those activities of communication, technical and commercial support and safeguarding of brands which are essential for encouraging technological, cultural and image development of porcelain enamel and the whole sector”.
Q: How do you feel that globalisation will change the world trade scenarios in the coming years?
“Twenty-five years ago 400 electrical household appliance producers shared 80% of the market, while nowadays the same share is held by the nine leading major producers. There has been strong concentration of the sector, yet real global enterprises have not been set up. The big companies are instead continental: the first three companies in America are American, in Europe they are European and in Asia Asian.
In distribution too a strong acceleration of the same phenomenon has been noted and as a result our approach to the market has also had to change. For example in order to be closer to large-scale distribution”, Vittorio Merloni concluded, “we have moved the commercial offices to Paris and transformed the new Indesit into a European brand, with the same image, same positioning and same advertising in the whole of Europe”.
The great progress made in a short time is summed up in a few lines, the analysis of complex phenomena translated into such straight terms that it all seems so easy. To talk in this way you first have to demonstrate the talent for simplicity (or simplification, as mentioned previously) in reality, products and competitive ability.
Merloni Elettrodomestici SpA
Despite the fact it is only 25 years old, Merloni Elettrodomestici SpA is the third-ranking European producer in the sector: with 12,000 employees throughout Europe and 12 plants in Italy, France, Turkey, Poland, Portugal and Russia, it produces 8 million electrical household appliances a year, for a turnover of 3,000 billion lire.
Listed on the stock exchange since 1987, at the same time it took over the Indesit and Scholtès brands (France) and started expanding towards Eastern Europe; in the year 2000 it took over Stinol, the major Russian producer of household appliances.
The innovative capability has always been one of the driving forces behind the success of Merloni: from the Uniblock of the seventies to modular electrical household appliances, from on-line technologies to the current services capable of fulfilling the needs of users and applying cutting-edge technologies. The company is ready to face the new demands of the global and continental market which, as claimed both in Fabriano and Paris, will mostly be based on services.