The gold manufacturing district of Valenza in north-western Italy presents itself as a dynamic district that, though weakened by the economic crisis, is seeking salvation in foreign markets. We are talking about an industrial sector with about 800 companies and 4,700 employees, smaller compared to the past but with big potential. That starts with exports, despite the slowdown in the first nine months of the year (-11.8%) after a very positive 2015.
The district in the province of Alessandria, Piedmont, is characterized by the presence of important brands including Damiani, Pasquale Bruni and Bulgari, which are flanked by a network of small producers with a wealth of know-how and traditions.
Also in the jewellery sector there are niche Made in Italy companies such as Rcm, producers specialized in unique pieces who export 95% of their creations, mainly to the Arab world. Then there is also Borsalino Diamanti, who are specialized in the selection of extremely high quality gemstones to offer Valenza producers the cut, purity and color suitable for the market.
A recent report by Intesa Sanpaolo giving an overview of the sector highlighted two points: the solidity of the companies thanks to a good relationship between operative margins and turnover and a moment of stagnation after the recovery in 2014.
Companies in Valenza did not grow much in 2015: turnover rose 0.7% compared to growth of 2.4% in its counterpart sector in Vicenza and 4.2% in Arezzo. Meanwhile in 2014 Valenza had recorded excellent progress, with a growth in revenues of 8%, better than any other gold manufacturing area.
Stefania Trenti from Intesa’s research department said that earnings before interest, tax, depreciation and amortization (EBITDA) remain higher on average among the Valenza companies compared to other gold districts, around 8.8%,“thanks also to higher labor productivity” Trenti said.
The industrial structure of the district includes larger companies in terms of dimensions and turnover existing alongside small firms: the big companies have been drivers for growth in the entire sector, in terms of both turnover and operating margins. The challenge now is to recover ground. For Francesco Barberis, head of the Valenza gold companies group of employers’ lobby Confindustria in Alessandria “the maintaining of manufacturing abilities and the capacity to distribute our collections must be accompanied by the revitalization of training.”
For Crivelli Gioielli, “the main thing is to focus on the brand, to make it increasingly more recognizable,” said Alessia Crivelli.
The district is reckoning with a very weak internal market – the average monthly spending of Italian families on jewellery has halved in the last 15 years—and exports are affected by a fall in demand, particularly from China and India. The United States remains the area of greatest interest for Italian jewelers, while they await a recovery in Russia.
On international markets the battle is wide open. What matters on this front is commercial networks and brand, the Achilles’ heel of the large part of companies in Valenza. “The district has a great wealth of know-how and productive capacities that should not be lost,” underlined Guido Damiani, head of Damiani group. “They should be organized to service big brands, a leap is needed to prevent a decline in the district.”
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