Milan – October 15th, 2019
The Plant Engineering supply chain in Italy represents 11% of the GDP and is confirmed as a stronghold of the Italian economy. It’s composed by 40 global champions and 5.000 SMEs that have consolidated revenues of €190 billion and more than 620.000 employees, out of which 332.000 are in Italy.
This is the synthesis of the study realized by Cribis Dun & Bradstreet – a company specialized in business information – and SupplHi – the Vendor Management platform for industrial equipment and services – and that has been presented today at the 25th Annual Meeting of the Manufacturers’ section of the Italian Association of Industrial Plant Engineering (ANIMP).
“We are used to think of Italy as the land of Museums, Luxury, Automotive and Agro-business but we should remember that the Plant Engineering value chain is an excellence of the Made in Italy.” as stated by Cribis D&B’s General Manager, Massimiliano Solari, that presented the study in front of about 350 industry leaders attending the traditional ANIMP event in Milano. “The long chain has a multiplier effect on the economy because characterized by the presence of Contractors, packagers and other integrators as well as the need for specialized works and sub-works”.
The study took into consideration the entire value chain, made of 20 leading international Contractors active in the Oil & Gas, Power, Construction, Steel & Metals and Shipbuilding industries, in addition to the 5.000 equipment manufacturers and services providers operating in the Plant Engineering industries. The End-Users (Eni, Enel and the other Oil Co. and Utility companies) that sum up another 15% of the Italian GDP have not been included in this analysis.
The analysis highlighted the role of Small and Medium-sized Enterprises with an annual revenue below €50 million that represent 88% of the companies while delivering 17% of the total value of production generated.
The study returns the picture of an extremely rich and comprehensive value chain, covering the large majority of the 2.500 categories of supply of equipment and services related to the plant engineering industry. A large focus is on equipment manufacturers (valves, pumps, turbines, pressure equipment, piping, fittings and flanges, structural material, …) with 49% of the value of production, followed by Contracting & Site-related Service providers (35% of the total).
Moreover, the study highlights the fact that only 23% of companies compete in the same family of supply, demonstrating the high complementarity of the companies – not to be considered all as competitors – and the high level of specialization required.
While the industry, with an average Failure Score – considered as the probability that an organization will fail in the next 12 months with outstanding creditors – of 69, showed a high financial solidity compared to other sectors of the Italian economy, larger companies and site-related services demonstrated higher financial risks compared to equipment manufacturers.
“Differently from other Italian excellences, 74% of the ownership and decision making is still Italian in a very global and competitive industry. And the potential for growth is huge: with just 0,4% of its sales destinated to R&D, the Italian plant engineering industry has been clearly under-investing in Research and Development of new materials, applications and business models and is lagging behind also in terms of gender balance in the leadership teams – only 17% of Directors are female versus the 40% of the Italian Pharmaceutical industry.” said Giacomo Franchini, Director at SupplHi and co-author of the analysis. “The new digital innovation wave will require investments in R&D and profound changes to the way of working. The industry must reverse the brain drain of the last years as well as start focusing on the next generation of leaders with excellent Project Management competences.”
The analysis behind the case study was made possible as a result of the technical partnership and native system integration between Cribis Dun & Bradstreet’s financial and compliance data on companies and SupplHi’s mapping of the Vendors active in Plant Engineering, at a global level, in the 2.500 categories of the SupplHi Standard Categorization.
On the basis of the success of this study, Cribis D&B and SupplHi will be launching a Permanent Observatory of the Plant Engineering industry which will remain open to collaborations with complementary players and will be focusing on the creation of Financial Ratings that are specific for the Plant Engineering industry, with special focus on critical services.
A synthesis of the study can be downloaded at the following link: