“With electricity consumption 17% lower than in 2020, we paid 25% more”
Julia Pasteur | 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 manufactured in the group is exported, 25% to China, another very significant part to European markets, Germany, Italy, United Kingdom and France, whose weight varies from one year to the next ‘other. And then there’s a net that goes to other countries because in a normal year we sell to 20 countries. So 10% is for 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 real gems. We have to believe that we can be a first class industrial country. When you think of the industry in Spain, you think directly of the Basque Country, and that makes sense. But there are other important industrial centers like 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, automotive, for naval… Industry must be promoted, it is the only guarantee of jobs for quality and a secure future.
Q: In September, for example, the Spanish industrial sector paid for the most expensive electricity in Europe: €102/Mwh compared to €43 in France and €69 in Germany.
A: Having implemented many measures at the factory aimed at reducing our carbon footprint, which we have fortunately reduced, we believed that polluting less and being more efficient would save us money. However, having consumed 17% less than last year, we paid 25% more in bills. It is a real tragedy because all these efforts have not resulted in the expected savings. Fortunately, we are not a very energy-intensive industry, but obviously we will feel this because we are in Burgos and heating the entire warehouse – where 200 of the 400 people work – is very expensive. And our forecast is that it will double…. I am thinking of some of our suppliers like the foundries, which are very intensive and for whom these electricity prices are a nightmare because they are not passed on to the products. It’s hard for us too. You have to keep in mind that what we are distributing now was sold a year ago with a cost forecast that has been completely ruined. Ultimately, reducing the carbon footprint helped keep us going.
Q: The pandemic hurt Nicolás Correa’s numbers, like those of almost every company, but that didn’t spell disaster. In fact, incomes are already at pre-pandemic levels, and all thanks to China, right?
A: To a large extent, yes. Above all, the pandemic has 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 number one market is China. We manufacture the complete machine here in Burgos, our customers come to receive it, see it, and then we assemble it at home. That’s why the business model has changed a lot for us. Customers could no longer come, but neither could we. Fortunately, in China, we have our own structure and we were able to manage. At the same time, in the rest of the world, we started to work more closely with our agents and this is where we made a qualitative leap.
Q: What about the results?
A: Two aspects come together here. From the time we receive an order to when it ships, it can take 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 there, but before the situation got worse around Chinese New Year, they had time to come back. So when the borders were closed in Europe in March, we had our people there. So we had this market at full capacity while Europe was closed, and we also received a lot of incentives from the Chinese government. In this 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, we started to recover in European markets, with some markets picking up significantly, as was the case in Italy. In short, we maintained production throughout the year.
Q: Why Italy? What happened to make it work so well?
A: Policies have been put in place that clearly encourage investment, which has 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 was a broad consensus on the need to move the economy and invest. These are essentially tax measures, such as the “iper ammortamento”, which consists of amortizing more and in less time, and which makes it possible to renew machines for the benefit of digitalization and Industry 4.0. Thanks to these instruments, our Italian clients have decided to invest. Machinery investment per capita in Italy far exceeds that of Spain.