2013 SuStainability RepoRt >
pRoduCt ReSponSibility
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| pRySmian gRoup | 2013 SuStainability RepoRt
The ability of the Group to react and respond rapidly to the
various requirements of global markets represents a strategic
factor that maintains the leadership position reached in the
sector for power and telecommunication systems and cables.
The grassroots distribution of factories and a highly
decentralised model for production, carried out at 91 factories
in 33 countries, are key to our ability to satisfy market
requirements and customer expectations on a timely basis.
During 2013 the Prysmian Group continued to implement an
industrial strategy based on the following factors:
• focus on higher value-added products;
• maintenance of a well-diversified geographical presence in
order to minimise distribution costs;
• concentration of high-tech product manufacture at a limited
number of factories, in order to focus our technological skills
and leverage economies of scale, increase manufacturing
efficiency and reduce capital employed.
The Group intends to pursue a policy of organic business
growth, based on selective investment and the development
of commercial and manufacturing synergies, coupled with
acquisitions.
The process of integrating Draka’s industrial activities started
in 2011 and continued throughout the past year, with the
progressive extension of best practices to the respective
organisational models and manufacturing management
systems, as well as to commercial activities. This process
strengthens and expands the range of solutions and services
offered to customers. At the same time, work has continued to
activate major strategic investments in relation to submarine
cables, high voltage cables, optical cables and optical fibres.
Gross capital investment during the year amounted to Euro
144 million, down with respect to the prior year due to further
optimisation of the use of capital following the transitional
phase that followed the acquisition of Draka. Investment in
additional production capacity accounted for 43% of the total,
mainly involving the Utilities and Industrial businesses and
the Optical Fibres segment.
In particular, investment at the submarine cables factory
at Arco Felice (Naples) has continued, in order to install
the capacity needed to manufacture the HVDC Western
Link between England and Scotland. Again with regard
to submarine cables, investment at the Drammen factory
(Norway) will prepare the production lines for the manufacture
of land-link cables for a number of ExxonMobil’s offshore
platforms positioned off the coast of the United States. At
the same time, the new Rybinsk factory for the production
of medium and high voltage cables has been completed and
inaugurated in Russia. The start-up of this facility is a key step
in the Group’s project to expand into high potential strategic
markets, such as Russia, not least in view of the recent
agreement inked with “Rosseti”, a local operator, to develop
solutions for transmission systems carrying up to 500 kV.
opeRations
In the Oil & Gas sector, there was significant investment at
the Sorocaba and Santo Andrè factories (Brazil), in order to
service the Oil & Gas projects acquired by the Group at the
Jurong Shipyards and Keppel Fels Yard in Singapore, and at the
Schuylkill Haven factory (US). In this last case, it was decided
to increase the factory’s capacity to produce Airguard cables,
which are used for special applications that require very
high performance from cables in terms of their resistance to
chemical agents and mechanical solicitation.
In the Optical Fibres business, investment in efficiency has
continued, especially at the Battipaglia (Italy) and Douvrin
(France) factories, with a view to reducing fibre manufacturing
costs. In particular, investment commenced at the Italian
factory to install a tri-generation plant that will reduce energy
costs. The new factory for the production of optical cables in
Slatina, Romania, was completed and opened during the year,
becoming a European centre of excellence for telecom optical
cables.
Investment to improve efficiency, particularly with regard
to the use of materials and the design of products, in order
to reduce fixed and variable costs represented about 14% of
the overall total. This work included major efforts to improve
the efficiency of the metallurgical sector, with a number of
Group factories (Durango in Mexico, Schwerin in Germany
and Emmen in the Netherlands) deciding to complete the
verticalisation process by expanding the production of
conductors. Such work will improve our competitive position in
the automotive and power distribution sectors, in particular.
12% of investment was dedicated to the constant
development of our IT systems and, to a lesser extent, to the
related R&D. In particular, investment principally to implement
the “SAP Consolidation” project continued throughout the
year. This is designed to harmonise IT systems across the
Group in the coming years. This new ERP system was extended
to the Czech Republic, Norway, Sweden and Denmark during
2013.
Capital investment to maintain capacity or enhance worker
safety amounted to about 12% of the total, in line with prior
years.
Lastly, with regard to other investments (19% of the total),
a factory has been purchased at Santa Perpetua (Spain) and
two projects of particular importance for the Group have been
progressed: takeover of the lease of the Ansaldo 16 industrial
area in the Bicocca district of Milan, where the Group’s R&D
function is based, and the start of construction work in the
adjacent Ansaldo 20 industrial area. These two investment
projects are part of the construction of the Group’s new
headquarters, which will extend over an area in excess of
20,000 m
2
and enable us to bring together in one location all
the business functions currently spread around Milan, thus
saving on operating costs.
