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WITH ITS CENTRALIZED RECEPTION SYSTEMS FRACARRO OPERATES IN 5 CONTINENTS
It is the leading multinational group in the centralized signal reception and distribution sector and aims to secure its standing in the active security business as well. Fracarro , European leader in audio-video-data systems, operates in all five continents. The company works in a sector ranging from technology and hi-tech, and the first hurdle it encounters on global markets is how to convey, as an Italian operator, sufficient credibility to impose its products to the detriment of foreign competitors.
We asked general manager Nello Genovese: how much did the company have to work to get over the scepticism which you were bound to encounter in your first foreign experiences, which were increasingly frequent once Fracarro saturated its national market?
This was definitely an issue we faced. Italian made products, traditionally, are not equated with hi-tech. In fact this is a prejudice, because many Italian companies, including Fracarro, have been offering extremely innovative solutions on the global marketplace. Insofar as we are concerned, throughout the years we have sought to convey to our potential clients – also by having them visit our plants – our strong points, which amount to an experience built during decades in television signal reception.
It is true that before entering into foreign markets Fracarro went a long way down a path first begun during the pioneering phase of its establishment in the 1930s. Almost half a century of cementing went by before going international. What were your milestones?
Created in 1933 from the passion of Bruno and Giovanni Fraccaro (the company name became Fracarro due to a spelling mistake) for radio frequency, the company became fully industrialized after World War II, also thanks to the launch of television in Italy in 1954. During the 1970s Fracarro controlled 80% of the Italian market and in the 1980s, after a tumultuous season for Italy’s private broadcasting services, the group began to develop satellite reception products. We were among the first three producers in Europe in this sector.
The hike in quality, however, came when Fracarro abandoned individual receivers and moved to centralized systems. What sort of research commitment did this metamorphosis entail and continue to entail?
The group has always invested 3% of turnover (approximately 80 million euros in 2007) in R&D. We use our own resources in terms of engineers and technicians, about 35 in all on a 400-strong workforce between Italy and abroad; we also deliver cooperation projects with Italian university seats, (Padua e Pisa). We also work in synergy with the Italian public service broadcaster RAI, and private networks Mediaset and Sky Italy. The mission to develop systems, finally, was assigned to a particular company within the group, Fracarro Engineering, whose job it is to evaluate and test new solutions.
One of the most concrete results stemming from our efforts is the so-called “technological convergence”. What does this mean in practice? How can centralized systems guarantee safety and lower costs for domestic and professional use?
The transition took place around the mid-Eighties, when Fracarro began to diversify, leaving some traditional products behind to move to safety systems and closed-circuit television. Fracarro’s product range includes both new active safety products, such as car and fire alarms, as well as highly evolved safety systems with integrated sensors with a small CCTV which allows – thanks to cameras – to monitor internal and external use and open areas and to view your pictures not only on ad hoc monitors, but also on your home television set or pc. For the future, we are preparing for a major shift, i.e. the transfer of the signal from the traditional coaxial cable signal to fibre optics.
After Fracarro Iberica in Spain and the Tunisian Manufacturing, were born Fracarro France, Fracarro UK and Fracarro Portugal together with delegates from of the most important international delegates from the UAE, Thailand and Australia. Today the Fracarro group has reinforced itself thanks to a direct presence in Greece and the entry into new markets such as India and China. What are the areas of the world that offer the greatest opportunities?
I would say that India and Brazil are the most promising areas, although the majority of our foreign turnover – 45% of profits – comes from France, Spain, the United Kingdom, and Australia. In India we have been establishing business agreements with local satellite operators, whom we believe are able to sell our products. Brazil is the subject of a careful analysis, because we want to broaden our presence in South America that today is limited to Argentina, Venezuela and Bolivia.The most interesting market segment in Brazil is that of centralized installations, which today transmit analogue signal but which will soon go digital. It is only a strategic positioning effort that, together with our know-how, will allow us to exploit the full potential of the Brazilian transition to digital.
These are certainly interesting prospects, in Brazil. But how hard it is to enter into a new market and subsequently gain greater and greater export quotas? What local channels must you activate, what are the strategic hubs you must reach, and what are the key relationships you must establish?
The short answer is it is not at all easy. Every market has its own characteristics and its own standards. Even the habits of the outfitters, who are usually loyal to their suppliers, contribute to building barriers to the entry of new operators. Usually, Fracarro operates via three channels: distributors, important local engineering companies, and wholesalers. It is our job to hook the prospective client and convince him of the validity of our solutions. In this process we are aided by our catalogue, one of the most comprehensive in the world, by over 70 years of experience and by our ability to offer country-specific solutions.