“We are looking for companies to acquire, both inside and outside of Italy”

“Uteco has seen some very strong years recently and further growth prospects are expected after the deal with NB Renaissance,” Aldo Peretti, CEO and shareholder of Uteco Group explains in an exclusive interview.

How did Uteco perform in 2018 in terms of sales, machinery built and general growth?

Uteco’s 2018 results indicated quality leadership in the main business, including flexo, gravure and digital printing. We maintained good results in terms of profitability – better than market standard. Given the acquisition, the official balance sheet has been delayed for a few months. This will outline financial figures and factors of operation for the acquisition.

At the Print4All Conference in March 2019 you mentioned NB Renaissance invested money in Uteco in order for you to grow through business and acquisition.

Yes, that’s correct. We are evaluating 3 or 4 small to medium wellknown Italian companies, along with opportunities outside of Italy. We see a real benefit in moving from our previous Italian stakeholders, who were more interested in estate business, to international industrial investors who will bring more opportunities and contacts in the sector worldwide. For instance, I met with Novamont a few weeks ago – they are also part of the NB Renaissance holding. Novamont is one of the most advanced research and development companies in the field of bio plastics.

You just finished building a fourth factory. Is this solely for manufacturing gravure lines?

No, this is a plan to support our growth in terms of the number of machines produced. Part of this growth is linked to gravure as the layout of these machines is bigger and therefore needs more space. But the fourth plant will cater to special machines as well, such as coating and laminating, and there will be some units for flexo. We will integrate this into our global plan, paying special attention to growth in the number of machines for both gravure and laminating.

What do you see happening next – a fifth factory or an acquisition?

I could say an acquisition, but it depends on the market. We aim to continue growing in a range of areas (sales, market share, new markets and new technology), but acquisition is definitely one main target.

At the Print4All Press Conference you mentioned the stock exchange. Where do you see the benefits?

The stock exchange is only one of a number of possible options for growth. Another option is integration with bigger groups, but we will see. The stock exchange is definitely an opportunity, not because we need the money, but because it allows us to create a stronger presence in the global market.

Probably the biggest market for you is North America. What is your strategy for this market?

We have already doubled the size of our service and technology center located in Kennesaw, Georgia. Our focus has been on customization, in order to meet the needs of the North American market. We have doubled the space for spare parts because our aim is to be the number one supplier of machines in the U.S and Canada. Furthermore, we have installed a Crystal 808 printing press which is available for demos and training. This further demonstrates our commitment to the North American Market. We currently have 500 installations in North America. We are implementing a rotation on which we will present our product line, from flexo printing presses to coating and lamination, and digital as well. We are also strong in the Latin American market, with approximately 500 machines there. We have experienced interesting sales growth in all countries. There are political issues currently affecting business in some countries. Some companies are only selling in specific markets, while others are waiting for a resolution in terms of the political and economic situation.

Are you referring to Argentina and Brazil?

Yes, but we have sold machines in many Latin American countries, including Chile and other emerging countries. Latin America is a very contrasting and diverse market, as some countries are emerging and seeking new investment opportunities, while others are experiencing economic crisis. Anyhow, it’s indeed an important target and we expect good growth rates in the future as markets such as Mexico and Colombia are growing at a reasonable rate.

How many people work for Uteco in North America?

We have a full staff, in fact, more than 10 technicians service our American Customers. Customer service is extremely important in the USA market and this has been a strength of ours that has supported our growth. Customer service and support is something we take very seriously and we will continue to offer our customers the highest quality support possible. In recent years we have become one of the leaders in North America with 50% of the market share. We also have 8 agents in Latin America and an additional 50 agents worldwide. Some agents cover multiple countries.

Uteco recently had an agents’ meeting in Colombia. What is your strategy for this market?

We consider Latin America a very important market. We usually organize agents’ meetings in Europe, but this special event was held in Colombia at the same time as a seminar and open house of one of our best customers. It became a very important promotional tool, allowing us to showcase our machines’ performance and discuss new technology. Given the success of the presentation, we will duplicate this format and hold seminars tailored to important customers.

Many manufacturers are currently looking at Asian markets. What’s your growth strategy?

We are following the increasing demand for flexo in Asia. But we don’t want to extend our market with low level machines – we prefer to follow the increasing demand for higher technology, largely found in the west. We want to remain an important player for flexo, but also for coating and laminating: a flexo machine, the Diamond, was recently installed in China, a very advanced laminating machine in Pakistan and a top digital machine in Japan. Furthermore, rotogravure machines were installed in Bangladesh, Sri Lanka and Indonesia. We are present in the market at the top level, and we will continue to be.

What can we expect in terms of digital (eg. double speed, spot colours)?

I’m sure you remember the expectations many years ago from all over the market regarding the considerable growth of digital. We prefer to not make claims, but continue to provide topperforming machines. The speed will be the same as it has been since the beginning. We will continue to work in flexo, gravure, coating and laminating, and digital, and will share our experience in terms of transportation of film and different drying technology for hybrid advanced applications. For us, digital will never replace analogue technologies like flexo. We offer digital to ensure our customers have the right product to meet their demand, and sometimes our customers (for example big brand owners or food and beverage providers) need it for short runs or special marketing campaigns.

What are you going to present at Drupa?

We will present something unique and special for each of the following: flexo, gravure, coating and laminating, and digital. Stay tuned! Recycling is a big topic in many markets and is predicted to have a big impact on laminating. You are testing barrier adhesives to replace one laminating layer? We are following two major trends in laminating that are linked to each other. Together with an important adhesives supplier, we are carrying out tests on recycling all laminating products. The process is based on the lamination of a PP Alox film with a PP cast film that is suitable for weldability with a special high barrier adhesive. The two films have the same chemical formulation, creating a monostructure that can be recycled. The new adhesive formulation has the ability to raise the barrier property and maintain it over time once smeared. The second trend is the process of delaminate; separating two laminated materials that are different in structure. We are proceeding with laboratory testing and cooperating with recycling plants in order to industrialize this process.

You don’t have the cooperation with Kohli anymore?

Our cooperation with Kohli was more a product of the media than reality. We worked with them to develop entry level machinery for the Indian and other Asian markets, and we sold a few of them. Now we are concentrating on our own target of producing top performing rotogravure machines and there is no competition or ill will between us.

You recently presented the SQL system and have already installed it for 3 customers. What is the purpose of that? Can you tell me about the advantages of using that system?

There are two emerging requests from the market: 1. More automization – clients are wanting to integrate our software with their own global data management. We have developed and installed the SQL system for this reason. 2. More global demand for industry 4.0 – This is happening especially in Italy, but also worldwide. Germany was the first to mention 4.0 and the first to implement it. Uteco, as the representative for the Machine Manufacturers Association, and the Italian government, have developed an important plan to provide financial support (eg. reduction of payment) to encourage older Italian users to develop their automization processes and data management. This has been successful in bridging the gap so far. The increased demand for global integration means a lot of work for us in terms of updating software and customizing applications.

Italy is now part of the Chinese Belt and Roads initiative. How do you think a company like Uteco can benefit from this, or will it have zero effect?

We started business in China many years before this development. We will benefit somewhat from it, as all Italian industry will, through being more connected. Highways and high-speed railways will allow this. We already have a strong relationship with China and are planning to have a strong Uteco presences via a local headquarters there in the future.