(“Machinery and equipment for the food processing”; “Machinery and equipment for the packaging and wrapping”; “Packaging used in the food industry”; “Complementary machinery and equipment for the food industry” and “Specific services for the food industries”)
Stefano Corradi's Thesis, The Parma Food Tech Cluster
UNIVERSIT À CATTOLICA DEL SACRO CUORE FACOLT À DI ECONOMIA Corso di Laurea Magistrale in Gestione d’Azienda Relatore: Prof. Francesco Timpano The Parma Food Tech Cluster, an analysis of business environment Candidato: Stefano Corradi
What’s the objective? The aim of this thesis is to analyze the Parma Food Tech cluster in regard of the diamond theory carried out by M.Porter and to show its strengths and weaknesses, trying to formulate viable solutions for the future of the cluster. Nowadays no specific data exist at any levels about the Food Tech industry, all the information were gathered through personal interviews, companies visits and balance sheet analysis.
Italian Food Tech industry Composition and Performance <ul><li>There are about 700 food tech firms </li></ul><ul><li>Companies generate a turnover of 4.200M euro and employ about 18.000 employees </li></ul><ul><li>Today food tech companies export between 70-80% of its machinery worldwide </li></ul><ul><li>High degree of excellence in technology innovation, products and services quality, but also ability to be a solutions providers for customers </li></ul>Source: Asia invest programme 2007
The Parma Food Tech Cluster Aseptic Monoblock TASTE Evaporator Source: Direct interview to Mr. Mario Gelati WHEN Last decade of nineteenth century and beginning of the twentieth WHERE Parma and nearby area WHY Rooted agricultural and food tradition Presence of a strong food industry Location HOW Heavy link between agriculture and processing industry Traditional experience combined with strong innovation propensity WHO Smart technicians Skilled and able entrepreneurs WHAT Unique tailor made machinery High quality and tradition known worldwide
Parma Food Tech Industry (5 macro-sectors) Metal supplier Technical and Strategic service providers Promotion (Parma fairs, museums,journals) Research Centres (SSICA, Parma Tecninnova) Schools and Unversities (Parma University, Centro Risorse Val d’Enza) Industry Associations (ASSOFOODTEC, Parma food technology) Tomato Pasta Diary Cold cuts Beverage Glass industry Tourism industry National Government Region, Province, Municipalities EU (EFSA) FOOD INDUSTRY Supporting Industries Government IFCs Related Industries Cluster Map
Parma Food Tech Industry Composition and Performance <ul><li>There are about 250 food tech companies divided in 5 macro sectors and about 400 craftsmen and workshops </li></ul><ul><li>The total turnover is about 2.000M euro with a workforce of about 8.000 employees </li></ul><ul><li>71% of companies have a turnover lower than 6M euro and employ up to a maximum of 50 employees, 26% have a turnover between 6M and 100M euro and employ up to a maximum of 500 employees and only 3 companies have a turnover over 100M euro and employ up to 1.000 employees </li></ul><ul><li>About 53% are Limited liability company, about 29% are public company, more or less 12% are general partnership and the remaining 6% are limited partnership and few cooperatives </li></ul>Source: Elaboration on Mr. Mario Gelati data
Parma Food Tech Industry Composition and Performance <ul><li>Only half of companies invest in R&D, half of them invest 10% of turnover and the other half invest less than 5%, very important the relations with external agencies as SSICA (36%), University (21%) and Parma Tecninnova </li></ul><ul><li>11% have a production site abroad and 22% have a commercial office abroad, the main country base is China </li></ul><ul><li>More than 90% of companies export abroad and the main market is Europe that absorbs 67,3% of the total export (about 70-80% of total turnover) </li></ul>Percentage of worldwide export Source: Parma chamber of commerce Opinion of companies on foreign markets Source: Elaboration on Mr. Mario Gelati data
Parma Food Tech Industry Vs Italian Food Tech Industry <ul><li>From the balance sheets of 81 parmesan companies and 568 Italian companies this is what result: </li></ul><ul><li>Except for the operating revenue per employee, the parmesan food tech companies show a performance a little bit better or in line with the national average, this is due to the strong competition inside the cluster. The main fault of the parmesan food tech companies is the lack of belonging to the sector which makes the proximity instead of being a strength becomes a weakness. </li></ul>Source: Elaboration on balance sheets
Cluster Diamond Government IFCs Small local market - Italian made reputation + Sophisticated demand + Demand Conditions Chinese competition - Internal competition ~ High number of SMEs ~ Parma quality brand ?+ Context for Strategy and Rivalry Quality of educational system ~ Skilled workers ~ Food tradition and history + Factor Conditions Promotion: fairs, journals, museums + Technical and strategic services providers + Metal suplier + Tourism industry + Glass industry + Food cluster + Related and supporting Industries
Strategic Issues & Recommendations To present to the market a high quality product in all its components in a clear and transparent way, so that customers can choose not according to the discount but according to the quality of products. “ Parma qualità” brand To start promotion activities at world level, maybe uploading cluster data on the UPI website where specialized customers can easily obtain them or attending International fairs in a common area where will showcase not only the industry companies but it could take also part a comprehensive presentation of the other values of Parma. Cluster promotion activities Skilled professionals Difficulty in securing the necessary professionals. To not have adequate professionals, impoverishes the company and exposes it to suffer competition from territories where it is easier to find them. To solve this problem specific training projects could be launched, because nowadays the available workforce for various reasons is very often with little professional training or, if formed, would require a conversion as the needs of the application are variable. High internal competition Mutual withdrawal of staff and technical solutions protected by patents, strong competition on price. It is necessary to create strong, respectful and lasting relationships between food tech companies. “ Parma Food Technology” A territorial chain association that should help companies to implement consistent, accurate and ethical behaviors on markets, strengthen the sense of belonging within companies; strengthen the relations between trade unions, improve the sales organization to maximize the penetration on the domestic and international market; marketing assistance; promote good relations between all companies in the sector even if competitors; facilitate the merger and the formation of consortia of firms and create the brand “Parma Qualità”. Also an intermediary with the government and EU.