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Industry 4.0 bonuses off to a good start as mechanical companies see big jump in sales

by Luca Orlando

Stefano Tavoletti, manager of Iemca, smiles as he rattles off the number of orders already received in January: a boom in requests for the Faenza-based firm's bar feeders, demonstrating the effectiveness of the Industry 4.0 tax breaks.

“Look, if these trends continue in Italy, it will be a golden year—and we hope that they will continue,” he says.

They have already received 70 orders, 20% more than the previous year; “and we have many negotiations open—since the market really restarted on January 1st,” he adds.

A first evaluation of the government's Industry 4.0 plan (which views super-amortization, at 250%, as a “bazooka” to relaunch investments in Italy) can certainly be made here at Lariofiere in Erba, Lombardy, by browsing around Fornitore Offresi's stands. The trade fair, dedicated to small-to-medium-sized enterprises (SMEs) in the mechanical industry, is currently in its ninth edition—boasting a record 360 stands (more than two-thirds of which are from Lombardy).

Companies that deal in equipment, mechanical production, machine tools, and measuring tools are all singing the same tune: the incentives are working.

“Customers are almost skipping over the products' qualities,” jokes Mecmatica's Mattia Tironi, “they only ask us about recouping the tax breaks”.

For the Bergamo-based software SME (which boasts 15 employees and €1.5 million in sales), 2017 started with a bang: orders grew by 30%, all from within Italy.
“We've already reached record revenues,” the young manager explained, “but we will almost certainly exceed them”.

For a long time, machinery manufacturers had been asking the Government for an ad hoc provision in order to “scrap” old plants. This came after verifying in the field that the national stock of production machinery had been progressively aging to well over 12 years—the oldest it's ever been. The expected Industry 4.0 bonuses, compatible with other measures, could come within five years in order to repay almost two-thirds of the overall investment; this would lead many businesses to heed the Government's pleas: “it's now or never for new investments”.

“All of our measurement systems,” explains Alpa Technical Director Claudio Ricci, “fall into the category covered by the incentives, and we've seen that the market has shown interest. Some clients have already signed on, and we have many negotiations under way, everybody is requesting explanations about the tools: our orders are currently growing by 10%”.

“We will certainly benefit from the incentives,” explains Matteo Zoia, founder of Lecco-based firm Zeta Stampi, “even though we already purchased two robots last year. We are now at record sales, €2.6 million, but we're looking to end 2017 with €3 million.

“We will certainly take advantage of super-amortization,” adds Alessandro Toninelli, Sales Director for Aignep (who have €50 million in sales in the pipe junctions and components sector), “since we're seeing that the Italian market is lively and doing well, with a 15% increase in orders.”

There's a rather omnipresent feeling that January may have effectively constituted a turning point. There has obviously been minimal statistical data to support this observation, but among the 12 businesses who we consulted in Erba, only one of them saw a decrease in orders in 2017. In the same vein, there have been similarly-elevated levels in 2017: in 10 out of 12 cases, orders have grown by at least two figures.

“Over the last eight years, we didn't earn anything,” explains Ellero Redolfi, owner of OMC (mechanical manufacturing), “but I have to say that 2017 started much better than in the past. If I have to compare it to 2016, orders have risen by 25%, even though it's best not to talk about the prices”.

“I'd say it's going so-so,” adds Fedele Boschello, owner of the Padua-based semifinished plastics mechanical manufacturing firm which bears his name, “Orders grew by 10% in January. Will we invest again? We're trying to, though last year we already invested €270,000”.

“We'll certainly do more,” explains Nicola Scelsi, owner of a self-named components firm that currently employs 13 workers, “I'd say that we could invest at least €200,000 in new machinery”. The road to an additional €10 billion in investments, as the Government's plan calls for, is long and perilous. But for Italian companies, the first steps have already been taken.