IPEG deal thrusts Piovan into North American market

Piovan SpA may be based in Venice, Italy, but it is now officially an American company.

That change in operating philosophy comes courtesy of Piovan CEO Filippo Zuppichin, who sat down with Plastics News at K 2022 to discuss the company's plans and current vision after making arguably the largest acquisitions in recent memory in the global auxiliary equipment market.

In January 2021, Piovan purchased IPEG Inc., another auxiliaries giant based in Cranberry Township, Pa. The sale, for an initial payout of $125 million and a potential earnout in 2024 of $22 million, thrust Piovan strongly into the North American market. The IPEG fleet of companies included the brands Conair, Thermal Care, Pelletron and Republic Machines.

With the sale, those brands have been folded into the Piovan family, bringing the company close to 800 new employees, a vast majority of them on U.S. soil. The company now has operations in 40 countries and joint venture partnerships in others.

But as importantly, the company gained a major touchstone in the U.S. market, imparting the Piovan name and culture across the Atlantic. Zuppichin has high hopes that the new market will be a growth leader for Piovan. Previously, the company did not have the infrastructure in North America to support its long-term vision of servicing customers worldwide.

"We had strong experience in Europe but not in North America," he said. "We believe that the U.S. will grow significantly in the next few years. Now, we are American."

The acquisition close to doubles Piovan's size — the company has 1,200 employees before the deal — but brings its challenges of integrating new brands and companies that previously operated independently under the parent IPEG umbrella. Zuppichin said he would not have bought the IPEG companies if the work culture was not already similar to that of Piovan's.

Piovan pushes its people to be innovation leaders, similar to the work being done at IPEG, he said. Tellingly, about 3 percent of Piovan's annual investment dollars goes toward engineering and R&D work, Zuppichin said. Culturally, the company is a major proponent of innovative thought and constantly strives to test new products, he said. The U.S. is a dynamic market where change is even more fast-paced and competitive than in Europe, he added.

"Europe is fragmented with many languages and cultures, and that [slows down] the pace of innovation," Zuppichin said. "In the U.S., it is simpler, and there is one way of doing business efficiently. Being in the U.S. for us was a must."

To that end, Piovan cherishes the idea that employees can make mistakes when attempting to engineer or develop new products, he said. The price of failure is that of learning from one's mistakes and becoming stronger.

"If you sit back and wait for developments, you can disappear," Zuppichin said. "There are no stupid ideas."

The company has instituted a kaizen system of continuous improvement, popularized in the 1990s by Toyota Motor Corp. as a way to keep manufacturing lean and efficient. Piovan's method includes tracking production, embracing change and instituting new systems continuously. That way a company can control and manage its innovation and its workflow, Zuppichin said. That is especially important in an organization that has suddenly grown into a world leader in industrial automation and auxiliary systems.

The company is still integrating its new brands and has not instituted other expansion plans, Zuppichin said. However, further expansion, especially in a changing North American market, is on the table, he said. The company is working to incorporate some of its European technology into the U.S. market in the nearer term.

That includes a strong focus on recycling plastics. Piovan has developed a new filtration system that better screens out contaminants from recycled polymers while controlling the amount of energy used through a heat exchanger. Some of that technology for recycling plastics was developed in Europe, where recycling is a bit further along than in North America.

The company also is establishing turnkey systems in each of its geographic markets, where everything from initial engineering and installation to customer servicing can stay in one country, Zuppichin said.

"Work in Mexico stays in Mexico; work in the United States stays in the United States," he said.

Zuppichin said the company is not so focused on its size, but on its people and their development.

"How do you avoid a bottleneck?" he asked rhetorically. "The real bottleneck is not in machinery or the number of factories, which are just commodities. It is in having good, qualified people and being able to motivate them."