Is it possible for a small family business to compete in an extremely high-tech sector like aerospace? The Italian company Merletti Aerospace is involved in the production of precision parts with special applications for the sectors of military and civil aeronautics. They believe that research and development is the unique factor maintaining their market competitiveness. We asked Sabrina Merletti, daughter of the founder, Gianluigi Merletti, and present commercial director of the company, what proportion of their resources they have to invest in R&D every year to keep their production in line with market requirements.

Do you spend a lot annually on research and innovation?

Approximately 60% of our turnover, amounting to about 3 million Euros. It is indeed a huge amount, but research is fundamental to our business. Our products, in fact, are in a constant state of evolution, also because they have to conform to all the bureaucratic aspects and documentation involved in their development. You could say that the product that we are working on today is already out of date, because the industry we are going to be servicing tomorrow will want new, different solutions.

In your opinion, what are the characteristics which make you one of the leading Italian providers of mechanical parts to the aeronautical sector?

Our ability to stay in constant contact with our clients, and guaranteeing a product with highly developed technological content. We are still a family-run business, but we can deal with very complex requests, managing the whole process flexibly and competently, from the purchase of the raw materials to the final testing.

Does the market recognize this capacity?

I would say yes, and this is shown by the prestigious status of the customers we have worked with, and continue to work with. We are suppliers to AgustaWestland in Italy, Europe and the USA, the world leader in helicopter manufacture. We provide parts to Aermacchi for civil and military aeronautics, especially the M346 trainer. And even if it is more complicated working with large groups or private consortiums like Airbus or Boeing, we want to establish relationships with them as well. In fact, we have well-established connections with some of the most important research centres.

You spoke before of the “bureaucratic aspects”. But what does bureaucracy have to do with designing and making mechanical parts for the aeronautics industry?

Technical standards, safety standards, and standards for the materials used in producing mechanical parts for a very particular sector like the aeronautics industry are constantly changing. Often it involves complex protocols and very heavy technical manuals. As suppliers, we have to know all the necessary procedures and how to apply them in a deft but safe way, guaranteeing our customers products which are fully in line with current standards.

What are you top products?

Mechanical components, structural parts, flight controls: these are very particular and sometimes unique parts. We are able to work with specialist materials, like aluminium alloys, special types of steel and the “Inconel” alloy. We also possess a particular skill in working with titanium, a material which is in quite considerable demand now in the aeronautics industry, and we have invested a lot into its research and production. We use expert sub-providers, certified by our clients, for all the specialist work that we cannot do in-house, such as heat treatments, surface treatments, finishes or operations like toothing or welding.

So your model of production is not primarily based on outsourcing.

Meccanica Merletti can manage and integrate third party production, but it is also able to manage the entire production process, from the purchase of the raw materials to the assembly of the finished parts, including the production of individual component parts and a choice of outside partners to entrust with the finishing. We must not forget the testing stage either, which is essential before the product can leave the factory.

How difficult is it to adjust to constantly evolving customer demand?

Very. When we started to service the aeronautical industry, about 20 years ago, we had to learn to be extremely flexible as well as technically competent. Only in this way have we managed to stay in line with the demands of our customers, for example, with regard to managing bureaucracy and documentation. A couple of decades on, I would say that now our principal difficulty is always guaranteeing the highest possible standards to our customers, who number some of the most demanding of clients.

Can you also supply foreign customers or do you work principally for Italian clients?

Since its inception Meccanica Merletti has held the ambition to be an international company, particularly in order to diversify its source of income. At the moment our export quota is still low, about 7% of our total turnover, but we are looking to increase that. In the aerospace sector, we have established some firm relationships within the United States, Finland and Portugal.

Does this still involve provision for the aerospace sector?

No, not entirely. In Finland, for example, we are working with a company in the energy sector, supplying components for epicycloidal transmission systems in wind-power generators. But going back to our traditional business: again in Finland we signed a ten-year agreement in 2004 with the Patria Aerostructures group, known nowadays as ThyssenKrupp Aerospace. This forms part of the NH90 programme, and is for the production of finished and assembled mechanical parts. We also signed a similar agreement with OGMA, in Portugal: we are their provider of mechanical parts for the EH101 programme. Both the Finnish and the Portuguese are partners of Agusta: in order for us to also become their partner we had to take part in a specially arranged national competition.

How important is it to have the certification when you take part in a competition or offer your product on the international market?