by Virna Bottarelli |
Prima Electro was founded in 1978 as part of the Prima Industrie Group, with the "mission" of producing the control electronics intended for the company's machinery in Collegno (TO). In over forty years of history, the company has broadened its horizons, so much so that to date only 30 percent of its turnover comes from its relationship with the Group to which it belongs.
Today Prima Electro designs and manufactures integrated electronic systems intended mainly for the industrial and railway sectors, but it also looks with interest at new target markets. As Livio Manissero, Sales Manager Electronics Division of Prima Electro, who has been with the company since 2007, recounts, there have been several significant milestones in the company's history: "In 2006, a stake was acquired in Electro Power System, then a startup operating in the development of energy storage systems and today Nhoa Group, with which a partnership is still active; 2007 was the year of the acquisition of Osai, a manufacturer of numerical controls from Canavese, and MLTA, a small company specializing in electronic solutions for the railway sector, from which I myself came. In 2009 Osai was incorporated into Prima Electro, while in 2011 Prima Electro North America was established, a company dedicated to the development of laser sources, originally in CO2 and now in fiber optics." Prima Electro is still divided into two business units: one dedicated to electronics and one to laser sources. In 2019, with the creation of Osaicnc, a company outside the Prima Industrie Group, numerical controls came out of the purview of the Electronics Division. The latter employs 180 people, 40 of whom are dedicated to R&D activities. The rest of the staff are employed in production and in marketing and administration activities.
What is your business model and what are the strengths that differentiate you in the market?
The Electronics Division will end 2022 with a turnover of 36 million euros and is focused on third-party customers, thus outside the Prima Industrie Group. By choice, we do not have a large customer base, but about 20 loyal customers, among whom are also large companies, such as, in particular, a company operating in the compressor sector, for which we have produced more than 12 thousand inverters this year. We have defined our business model with the acronym Dots (Dedicated-Off-The-Shelf), because we design and manufacture electronics to customer specifications and establish real technological partnerships with them that last over time. In fact, customers ask us for solutions that do not exist on the market: it is up to us to tailor them, a bit like an electronics "boutique" that packages unique products, destined essentially for the industrial, railway and, in the future, electric mobility fields. We deal with power electronics and digital electronics, so we make different kinds of solutions: ranging from HMIs, i.e., objects for machine control, to power units, i.e., drives and inverters for motor control.
Flexible, agile, passionate, innovative: this is how you define yourself at Prima Electro. How do these characteristics translate into reality?
Passion for technology and innovation, together with our marked technical connotation, are the characteristics that distinguish us in our relationship with clients and enable us to respond to even their most complex requests. In this sense we are flexible, because we have a background of knowledge that adapts to different customer needs. We are also a "vertical" company, because we deliver a finished, turnkey object to our client, guaranteeing complete and lasting support over the years. We design and produce everything in-house, from the electromechanical part to the firmware, and with our customers we are transparent: we give them the opportunity to see what our costs are and, consequently, our margins. We follow the purchase of each component internally, we manufacture and test the electronic boards at our site in Moncalieri (TO), and we assemble the finished products at our plant in Barone Canavese (TO), in a process that we could call four-handed with the customer. The testing equipment is also made in-house, so we have direct control over this stage as well. This way of operating constitutes our added value and distinguishes us from pure subcontractors, who are probably cheaper but do not offer a service like ours.
Your core business is making integrated electronics solutions to customer specifications: how does a Prima Electro signature project come about?
It has to be said that our company thrives on production, so we work with clients who ask us to design and produce. Normally we start with a feasibility study, with which we expose to the client the time and cost of developing the application. We then define product price and quantity to be produced, and if agreement is found with the client, a contract is made. These are quite lengthy processes, because we are not talking about solutions that are based on standard products but on customized projects and large customers with a significant investment capacity. From the contract then comes a relationship that lasts over time, because we also take care of the maintenance of the product, so the issue of obsolescence, any changes and maintenance, always managing everything in-house.
In which sectors do you see particular ferment and the best opportunities for growth?
We have been operating in the industrial sector for some time, especially in power electronics, and this is where we generate most of our sales. On the other hand, we would like to grow in the rail sector, which is still a niche for us, inherited from the MLTA acquisition: we believe it is a dynamic market, offering good margins, but we still need to make ourselves known. We have already made products for ETR 500 trains, we have customers such as Alstom Ferroviaria, Hitachi Rail and Trenitalia, and we have participated InnoTrans. A broader discussion should be made, finally, with regard to electric mobility: this is a compulsory direction, which must be taken soon, and it is true that it perhaps entails the risk of job losses in the automotive sector, but from Prima Electro's point of view it is above all an opportunity, particularly with regard to our power electronics business. Since the beginning of the year we have been focusing on Active Front End inverters and Dc/Dc modules for charging stations, solutions that we can develop based on the know-how of the inverters we already produce for the industrial sector. The market for charging stations is one that we need to focus on in the short term, because it is likely to become saturated quickly, as it is already populated by many players, and requires substantial investment, in the order of hundreds of thousands of euros. In addition, the approach we are taking for this sector is new to us: it is not a matter of designing and producing a solution that is requested by a customer, but of developing an ad hoc product for charging stations and looking for potential customers interested in buying.
The global economy today is grappling with shortages of components and raw materials-how do you address these issues?
The shortage of materials has obviously touched our business as well. The problem, which I believe is also the result of speculation that started in the Far East, exploded in 2021, continues in this 2022, and I believe will accompany us for at least the first half of next year. In order to continue production, in a scenario in which on official distribution channels delivery times have stretched out of proportion, reaching up to 50 weeks, we have turned to brokers, but taking the risk of paying more and receiving poor quality components. With customers we were, as always, transparent: we made them aware of the problem and they acknowledged the extra cost imposed by the situation, agreeing to update the price lists several times, which is unusual because our prices are normally valid for more than a year. We then took on the burden of redesigning several electronic boards, with three people dedicated specifically to this activity since the beginning of the year. The redesign is done on the basis of the components we are able to purchase and stock.
Although we are at a stage where uncertainty predominates, what are your growth goals and how do you intend to achieve them?
We believe we can grow, over the next three to five years, by leveraging our technical capabilities and solid corporate foundation. The goal is to increase revenues by diversifying our markets, expanding our presence in new areas, such as electrification, and consolidating relationships with the large customers we already have in our portfolio. We are also thinking about forging partnerships in those areas where we do not yet have, internally, all the necessary expertise and it might be useful to network with customers and other suppliers. We also plan to strengthen the R&D area and collaboration with the Polytechnic University of Turin, which is a valuable pool of electronic and software engineers for us to bring into the company. Finally, we have started work on the expansion of the Barone Canavese site, a 5 million euro investment that shows how, despite uncertainties, Prima Electro looks to the future with confidence.
You might also be interested in:
