Julia Pastor | Carmen Pinto is the CEO of Nicolás Correa, which manufactures milling machines for half the world.
Q: How much of its production stays here in Spain?
A: 90% of what is made in the group is exported, 25% to China, another very important part to the European markets, Germany, Italy, the UK and France, the weight of which varies from year to year. And then there is a trickle goes to other countries because in a normal year we sell to 20 countries. So 10% is for the domestic market. The industry in Spain shows other figures, especially in terms of investment, because the truth is that Spain is an industrial power and we have some real gems. We need to believe that we can be a first-rate industrial country. When we think of industry in Spain, our minds go straight to the Basque Country, and that is logical. But there are other important industrial centres such as Burgos, for example, where there are also powerful companies such as Grupo Antolin or L’oreal España. From Burgos you can reach 20 countries in the world, with our brands and our machines, for aeronautics, the automotive industry, for the naval sector… Industry must be promoted, it is the only guarantee for quality employment and a secure future.
Q: In September, for example, the Spanish industrial sector paid the highest electricity prices in Europe: €102/Mwh compared to €43 in France and €69 in Germany.
A: Having implemented a lot of measures at the plant aimed at reducing our carbon footprint, which fortunately we have cut, we thought that polluting less and being more efficient was going to bring us savings. However, having consumed 17% less than last year, we have paid 25% more in bills. This is a real drama because all these efforts have not led to the expected savings. Fortunately, we are not a very energy-intensive industry, but obviously we will feel it because this is Burgos and heating the entire warehouse – where 200 of the 400 people work – is very expensive. And our forecast is that it is going to double…. I am thinking of some of our suppliers such as the foundries, which are very intensive and for whom these electricity prices are a nightmare because they cannot be passed on to the products. It is difficult for us too. We have to bear in mind that what we are now putting out the door was sold a year ago with a cost forecast that has been completely ruined. In the end the reduction of the carbon footprint has helped us not to let it get out of hand.
Q: The pandemic hurt Nicolás Correa’s figures, like those of almost all companies, but it has not meant a disaster. In fact, revenues are already at pre-pandemic levels, and it’s all thanks to China, isn’t it?
A: To a large extent, yes. Above all, the pandemic affected us in terms of operations, much more than in terms of results, since 90% of what we do is exported to different countries around the world. And in fact, our top market is China. We manufacture the complete machine here in Burgos, our customers come to receive it, to see it, and then we assemble it at home. That is why the business model changed a lot for us. The customers suddenly couldn’t come, but we couldn’t go either. Fortunately, in China we have our own structure and we were able to manage. Meanwhile, in the rest of the world we started to work with our agents more closely and that’s where we made a qualitative leap.
Q: What about results?
A: Two aspects come together here. From the time we receive an order until it is shipped, it can take from six to 18 months, depending on the complexity of the machine. So we started the year with a good portfolio, which allowed us to work more or less normally in the first half of the year, within the limits imposed by the pandemic, but we did not have to stop. Also, the pandemic started in China at the end of 2019, when our expatriates were here, but before the situation worsened towards the Chinese New Year, they had enough time to come back. So when the borders closed in Europe in March, we had our people there. So we had that market at full capacity while Europe was closed, and we also received a lot of incentives from the Chinese government. In that second part of the year we received a lot of orders from China, which meant that the season was not at a minimum, as in other industries. Then, from October onwards, we started to recover the European markets again, with some markets picking up significantly, as was the case in Italy. In short, we maintained production throughout the year.
Q: Why Italy? What has happened to make it perform so well?
A: Policies have been implemented that clearly encourage investment, which have made Italy, in our case and in the industries we serve, the engine of Europe. I don’t know these policies in detail, but I do know that there has been a lot of consensus on the need to move the economy and invest. These are basically fiscal measures, such as the “iper ammortamento”, which is to amortise more and in less time, and which allow machinery to be renewed in favour of digitalisation and Industry 4.0. Thanks to these instruments, our Italian customers have decided to invest. The investment in machinery per capita in Italy is streets ahead of the one in Spain.