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MAGALDI POWER: ash handling for coal power stations all over the world
Magaldi Power is the latest addition to the Magaldi Group: founded in 2002, it is specialised in dry bottom ash handling for solid fuel boilers in the power generating industry. The business story of the Magaldi Group, however, goes back to the beginning of the 20th century. We ask its President, Mario Magaldi, how it was possible to evolve from an industrial expertise in the production of transmission systems to the disposal of residue from coal combustion.
How did the Magaldi family, now an entrepreneurial dynasty spanning three generations, start its business adventure?
It all started with a patent registered in 1901 by Biagio Magaldi, my uncle, who developed a conveyor belt made of buffalo leather. Contrary to the other belts used at the time for engines and torque, single-pieced and made out of plastic, this ‘supercinghia’ was made up of several strips of leather joined with nails. So even if one of them snapped the belt would still be functioning. From the start, therefore, Magaldi has focused on reliability, ensuring continuity of production processes.
When did you make the technological jump that led you to enter the niche in which you are world leaders?
It was a process in several successive steps. Firstly, the company tried to find a new technology for the transportation of hot material. The experiments lasted for decades until my father – Paolo Magaldi – created the ‘superbelt’, a steel mesh belt that built on the concept of the ‘supercinghia’. It was made of partially overlapping steel pans that served as a carrier, and it eliminated the weak points of traditional conveyors. Once my father passed away, it was my job to find concrete applications for this new product: at first we thought of using it to transport goods in cement factories or for any other industrial application where transportation of hot, heavy and abrasive materials is required. Like, for example, melting in foundries. At the 1980s an Italian thermo-electrical plant asked to try the ‘superbelt’ underneath their boiler to remove heavy coal ash. That was the first time ever in which our conveyor was used underneath a fossil fuel boiler in a coal thermo-power plant.
Was that the start of a new entrepreneurial season?
Definitively: over the following years, especially after 1990, Magaldi started to develop the MAC solution (Magaldi Ash Cooler) in partnership with Enel, Ansaldo and other large Italian industries. MAC is our leading product, a conveyor belt capable of transporting material up 1.000 degrees Celsius. Among its advantages is the extremely low percentage of unburned residue it produces and the fact that it does not use water to remove them, increasing productivity and minimising the environmental impact.
With MAC Magaldi created a market where none existed beforehand. Before MAC, the processes to extract bottom ash from boilers were all ‘wet’, i.e. they relied on the use of water. How did you win over a clientele that has traditionally used to other systems?
In the first years we were up against the resistance of those who were used to relying for decades on other extraction systems. Today, however, we have a strong credibility and all of the major players in the sector know about Magaldi Power. We are no longer seen with scepticism, on the contrary: many ask us to produce our products under licence. Our philosophy is to work by giving commissions, with local offices and support agents, or through licensees, whom we ask to promote and sell our plant systems.
Licensees, however, are not the only method you use to enter markets, right?
We have a triple strategy: we either look for an agent/representative, who receives directions from an area manager in Italy, or we nominate a licensee, who gets entrusted with all marketing and sales duties. The third option is to create directly a foreign affiliate, as we have already in Australia, Germany, China, ad soon we will in India. The local firm concentrates on providing all the services related to the supply of the goods, like project management, buying non-strategic supply quotas, marketing and after-sales services. In practise, we share risks with our foreign affiliates. After all, if we want to expand globally, we must create local branches and set up an appropriate structure.
Do you risk obscuring Magaldi Power’s Italian roots by projecting yourself too much beyond you national boarders?
Not at all. Magaldi Power’s heart is and will remain in Italy, but the company is literally obliged to hit the international markets: the domestic scene has been saturated for the past five years. But this international focus is not a recent characteristic: since the beginning we have tried to expand beyond the national boarders. Nowadays we are present all over the world.
Where do you have the strongest presence?
Australia, without a doubt: we have already sold eight system plants over there, 4 of which is being put into place. We have orders for 20 million euros in the next three years over there. The second strategic market is Germany: 18 million euros worth of orders have been already signed for 2008. Other interesting international markets are Spain, Portugal, India, Greece, Turkey, Eastern Europe and Latin America. In the Far East, China is the main market, where we have 15 installations. Then, in order of importance, we have South Korea, Japan and the Philippines. The guiding principle, at the end of the day, is only one: we try to take on as many orders as we can, while trying to manage an exponential growth in revenues. Our turnover went from 18 million euros in 2005 to 34 in 2007. And the real ‘boom’ is still to come: at the end of 2008 we expect turnover to hit the 50-55 billion euro mark.