Among the Italian manufacturers of components for household appliances that are reorganizing their activity to compete in the global market, stands out Cosma SpA, reference enterprise in the production of components and accessories for cooking appliances.
Alessandro Binetti Traverso
In Italy the national household appliance industry has been living a time of great difficulty since 2009 until today, owing to the combined effect of the economic crisis and of the delocalization policies carried out by the main brands of finished products, and it has seen the halving of its production, decreasing from thirty to fourteen million pieces; the most affected enterprises are the component producers. It is a sector of great relevance for the Country, rich in entrepreneurial traditions and high professional skills, with some dozen thousand employees and a turnover that is assessed to amount to about four billions per year.
Lots of these enterprises have been established and developed in the ambit of the so called “industrial districts” of Veneto, Lombardy and Marche, being part of the induced activities of the main brands of household appliances, which just in those regions had their main production sites. For these enterprises, generally small and very small businesses, the big industry of “white goods” was not only the main and often single customer but it constituted also an important reference for the acquisition of organizational and professional competences.
Owing to the productive delocalization, which the household appliance industry has massively realized in the last decade, all that has disappeared. Lots of enterprises of the industrial districts and especially those with smaller sizes, whose activity was characterized by low added value and by scarce innovation contents, were struck by the crisis, proving to be unable to seize those opportunities that, even in the current difficult situation, the global market was able to offer.
A successful case
The history of Cosma, historical company that produces household appliance components and is specialized in the manufacturing of enamelled grids for cooking appliances, demonstrates how it is possible to remain competitive for a medium enterprise of this sector, overcoming the constraints that might have bound it to the territory of origin, in order to go on developing in the global market. Set up to satisfy at the beginning the supply requirements of a big industry in Veneto, since its first years of activity Cosma decided to diversify its customers, extending its offer to all big brands of the sector, Italian and foreign ones.
Besides the company, already at the end of the Nineties and ahead of times, had felt the need of delocalizing a part of its production to a low labour cost Country, to deal with an international competition that already at that time started creating some problems to Italian enterprises. The opportunity for the implementation of a factory on a Eastern Europe Country was offered to Cosma by Electrolux, historical customer of the company, which had built in Romania one of its production sites and had proposed to Cosma to establish itself in the same area of its plant.
The relationship with Electrolux has allowed Cosma to overcome more easily the first difficulties deriving from the implementation of the new site in Romania for which, moreover, the local government has granted the tax exemption for the first eight years of activity. Cosma, however, did not believe it was opportune to establish an exclusive relationship with a single household appliance producer and for this reason it operated on the market in absolutely independent way, succeeding in widening the number of its customers that today include the major sector brands.
It is also worth underlining that Cosma’s production is prevailingly constituted by enamelled iron grids intended for cooking hobs, a typology of components that, if superficially analysed, might seem elements with low technological content. On the contrary, actually, the production process and in particular the grid enamelling phase, which occurs on shaped iron elements and electrically spot-welded, calls for particular attention by skilled operators because, owing to the high temperatures reached in the enamelling phase and that can exceed 800 °C, the metal might soften, with the risk of the piece deformation or even of the detachment of parts.
It is therefore necessary, for Cosma, to pay utmost attention to the personnel training in the new factory in Romania, both with the presence on the spot of Italian technicians taking care of the local personnel training and with training stages of Rumanian technicians in Italy. These initial troubles have been anyway overcome in a relatively short period and today the quality of the Rumanian production is aligned with the Italian factory’s. Concerning then the service level, it is worth pointing out how the geographical position of the new plants, a sort of centre of gravity in comparison with historical European Countries and the rising ones of East Europe and Turkey, allows the delivery of supplies on trucks, in short times and at low cost.
The diversification project
The production of a part of the enamelled grids in Romania was not, however, the only action that Cosma undertook to react to the market troubles. Considering in fact the growing trend of the producers of high-end cooking hobs of using cast iron grid, a component whose production was not economically competitive in Italy, Cosma has decided to provision these same grids directly from China, which today is the primary producer of these elements. And then, to attain the best provisioning conditions, it has set up its own representation in that Country, in that way succeeding in taking care of the various supply stages on the spot. With this initiative Cosma managed to complete the range of its products, in order to approach the market as a global and competitive supplier in its reference sector.
At the same time, the management of Cosma has realized the opportunity of accomplishing a greater diversification of its offer. Analyzing the evolution of the market of cooking appliances, the company has noticed that the demand for electrical cooking hobs was notably increasing on a world scale and this permitted Cosma to develop a new technology for the production of glass hobs, with the advantage of remaining in the same market sector, the cooking appliance one, where the company had gained a solid reputation and a leadership position on a world scale.
We should also notice how, with the same technology, it would have been possible to produce also other glass elements for household appliances, such as covers for cooking hobs, oven doors, dashboards and front panels of various kinds, which would have further enlarged the product range. The possibility of establishing the new productive process at the Cosma factory already existing in Romania, would have permitted to enjoy a lower cost of labour, energy and water, besides consistent advantages deriving from the favourable tax regime.
Besides, having to implement the manufacturing process ex novo, it would have been possible to equip the factory with more advanced productive plants. This aspect is particularly important for the typology of glass products that Cosma intended to develop and that need high machining precision both in cutting operations and in the execution of silk-screen printings used for the “touch” technology of glass cooking hobs. And just to obtain a higher precision of silk-screen printings, Cosma has devised a particular modality of plan truing that allows achieving excellent results.
After accomplishing an attentive market examination, Cosma decided to produce flat glass elements for household appliances, creating in Romania a company dedicated to this specific business: Cosma Glass. At the beginning of this year, it then proceeded to the purchase of plants, which were installed in an area contiguous to the Cosma factory already existing at Baia Mare, where at the beginning of July the production of the new glass hobs started.
We have interviewed Giancarlo Locatelli, managing director of Cosma spa, about the future prospects of the company and the market opportunities arising from the creation of Cosma Glass.
On which grounds are the new glass products integrated into your traditional offer?
Glass, actually, has several similarities with the enamelled products, especially in terms of mechanical resistance and resistance to chemical agents, as well as in terms of esthetical contents, hygiene and easy cleaning. It is then worth considering that glass is occupying a position of ever-increasing importance in the household appliance industry, as it already happened in the automotive industry.
This field is however already controlled by big companies with which you will be obliged to compete …
It is true, but they are big Groups that cannot rely on the flexibility requested by the market today, or by minor players that do not grant, nevertheless, an acceptable quality level and a sufficient service degree. We are going to cover this market gap, successfully consolidating our role of excellence supplier for the product quality and the service level, especially in small batches and niche products.
On which strong points do you think that you will rely to consolidate the new products on the market?
The strong points of the company, together with the modern managerial culture, include the operators’ professionalism at all levels, cutting-edge production technology and high service level, not only in relation to the fast and flexible management of orders but also concerning logistic activities.
What are the differences with your competitors concerning the production process?
At the origin Cosma Glass was oriented to the market of special glasses, which it is difficult to manage for the producers of big volumes. For this reason we have chosen a state-of-the-art plant typology, able to offer great management flexibility, from cutting tables with automatic wheel change for the various thicknesses and the shape cutting, to up-to-date grinders able to offer very high precision on glass, besides a CNC automatic bench drill machine with 4 opposed heads and a self-centring two-colour silk-screening line with fast set-up. The installation of a water-jet cutting plant is also foreseen soon.
In competitive terms, how much is the production localization in Romania important?
The location of the factory is undoubtedly an element that favours us, thanks to the low costs not only of manpower but also of the other necessary resources for production and transports. But most of all it is important the synergy obtained thanks to the international positioning of our brand.
Could you better clarify this aspect?
The new glass products are intended for the same reference market in which Cosma operates with over thirty-year experience, having gained a position of international leadership in its field. The quality of the relationships with the customers in the cooking appliance industry and the confidence that they have in us makes the proposal of new products easier.
What are in prospect the market possibilities for this offer?
They are undoubtedly good, considering that recent studies let us expect a notable growth of electrical cooking hobs, in comparison with gas ones, in the next five years, especially in the most developed markets, in Europe as well as in the United States of America and for medium/high-end products.
What are the revenue goals that you have set?
Our primary goal is then to reach in 2015 a production of 5,000 pieces/day, with a turnover of 5 millions/year of Euros.
INNOVATION FOR ENAMELLED GRIDS
Cosma was established in 1980 as manufacturer of enamelled components for the household appliance industry, thus succeeding in gaining the position of primary European producer of enamelled grids for cooking hobs and cookers. In this field Cosma has succeeded in introducing some important innovations, such as the use of iron in straps instead of round. A solution that was highly appreciated by the market. In 2001 Cosma started the production of enamelled iron grids, not only in Italy but also in a new factory at Baia di Mare in Romania.
Recently, with the target of diversifying its production, Cosma has set up a new company (Cosma Glass) that in July 2013 started producing, in the same factory already existing in Romania, flat glass elements for household appliances. In the future, with this initiative, Cosma intends to become a reference partner in the market of cooking appliances, not only as supplier of iron and cast iron enamelled grids but also of hobs and covers, oven doors, dashboards and glass front panels.
– production factories: San Vito al Tagliamento (Italy), Baia Mare (Romania)
– Italy Employees: 65
– Romania employees: 150
– Trade Company abroad: Cosma Shenzhen (China) with 4 employees
– 2012 overall turnover: 16.2 million Euros (of which 6.2 millions in Romania)