Italy's Northern Powerhouse

The Italian economy might be in a bit of a mess, but the country's buoyant north-eastern corner has spawned a cluster of world-beating businesses, from Pinarello to Segafredo.

by Matthew Gwyther
Last Updated: 07 May 2017

Illustrations by Lindsey Spinks

Although its place as the sick man of Europe has been taken by Greece, Italy has struggled over the past two decades. Even before the cataclysm of 2008, the Italian economy hadn't grown since pre-Euro days. After the embarrassment of Berlusconi's reign -replete with bunga bunga, teenage sex workers called Ruby the Heartstealer and quips about the size of Frau Merkel's backside - the government of the youthful Florentine Matteo Renzi is struggling with economic reform.

Output remains sclerotic, inflexible and staid. Its banks are helpless. Debt levels are terrifying. Migration from Italy to the UK has reached new heights, up from 126,000 individuals in 2011 to 176,000 last year. Most are young people who find it next to impossible to find a job back home.

And yet brand Italy retains a powerful allure. A seductive mix of dolce vita, bella figura and espresso macchiato. Lady Gaga is 75% Italian. Claudio Ranieri, the Colosseum, Giacomo Puccini, the Cinquecento and Miuccia Prada the 100% real deal. There's a sense that, for all their problems, Italians know how to live life properly.

The north-eastern corner of Italy, principally the Veneto region but also Friuli Venezia Giulia, has long been one of its more economically productive regions. Occupying the plain below the eastern Dolomites, it may lack the metropolitan swank of Milan and Turin but it has strong entrepreneurial drive. It's currently flooding the planet with prosecco, the latest poor man's champagne. (It has also spawned the separatist movement of the Lega Nord, which seeks to dump what it labels Italy's lazy, feckless Southerners out of the union.)

Italian business done well remains highly successful. To survive and thrive there, you have to be very good. The economy is still the fourth largest in Europe, powered by smaller companies.

Within a few miles of each other, MT tracked down a cluster of four world-class businesses who rank with the best. All look outwards for business and have many Britons as customers.

Two of these companies hail from Treviso: the bicycle-maker Pinarello and the coffee producer Segafredo.

There must be something in the water (or the caffeine) in this small city of fewer than 80,000 because it is also home to Benetton and the electrical goods manufacturer De'Longhi.

What do they have in common? Three were founded by enterprising families within the last 70 years who still maintain strong controlling interests. The family remains the dominant unit in Italian society at both an economic and social level. People trust family more than civil society and nobody trusts the state. The other is owned by a German financial institution and run by an American multinational, both cashing in on the never-ending allure of Venice.

Cimolai started out making windows, now it's shaping the complex steel sections of the Garden Bridge

So, you have a burned-out Ukrainian nuclear reactor that requires encasing in steel - Chernobyl. Or a high-tech Olympic stadium that needs construction - Athens. Or, if you are Joanna Lumley, you want a Garden Bridge that will span the Thames from Temple to the South Bank. 

Who do you call? The 88-year-old Armando Cimolai and his world-renowned steel construction company based in Pordenone, Friuli. Cimolai is a global leader in tricky, daring and visually arresting steel structures.

An artist's impression of the Garden Bridge across the Thames: Cimolai is constructing the steel plate and copper-nickel structure, which will be shipped in sections to London

Cimolai's large hands are those of a man who has used them to make things. 'At the age of nine I could weld using oxygen,' he notes. He began, in the desperate post-war times of 1948, making metal windows with his wife Albina. She had refused to marry him unless he got his act together. 'So many people were leaving for Canada, Australia. My own father had left to work in the motor industry in Detroit. But I wanted to stay.'

Cimolai is now a big Italian exporter and turns over around €0.5bn annually. Cimolai Snr has handed over the running of the company to his son Luigi, a bilingual Marcello Mastroianni lookalike, who trained with Costain in the UK.

Cimolai helped construct the Reggio Emilia AV Mediopadana railway station in Italy with its wave-like roof 

London's Garden Bridge, designed by superstar Thomas Heatherwick, is a complex structure made of steel plate clad with copper and nickel. It will be constructed in Friuli and sent in pieces by barge all the way through the Bay of Biscay and up the Thames.

The steel game is tough all over the world at the moment, and especially since the global construction slowdown. Orders are thin on the ground. But family ownership means they can ride out the hard times more easily without institutional investors demanding quarterly updates on progress or the lack of it.

'My grandfather was a maestro in the Venice Arsenale. And we do well because we're still artisans,' says Cimolai Snr. 'I told my wife one day I will build the bridge over the Strait of Messina to Sicily.' Maybe one day his son will.

The Sport City Tower in Doha, Qatar was another of Cimolai's projects

Heritage plus clever marketing equals the modern male's midlife crisis indulgence of choice

The chief object of desire of middle-aged men in Lycra tights, Pinarello is a luxury brand to die for. The €6,000 carbon fibre bikes, identical to those on which Bradley Wiggins goes for a spin, have become a worldwide hit. Around 30,000 are made in Taiwan each year and the biggest export market is the United States. The UK is third.

1995 Pinarello Espada Carbon, made for Miguel Indurain, five times Tour de France winner

Pinarello was founded by the legendary Giovanni Pinarello in 1953. The eighth of 12 children, he had been a professional cyclist during the 'heroic' post-war era, but came last in the 1951 Giro d'Italia, winning the Maglia Nera or black jersey for his pains. So he started making bikes with quality frames and stylish flourishes instead. He died in 2014 while still putting in a shift at the family bike shop, aged 92. The original store is still open for business on the high street in Treviso.

Founder Giovanni Pinarello in his cycling race days

Giovanni's son Fausto has been in the business since the age of 17. Running a company turning over €50m with 38 staff is no mean feat. He combines technical mastery with a clever understanding of how marketing can create keen desire.

'I'm like Ferrari but different,' he says. 'You can be an ordinary guy and have the same bike as Team Sky in the Tour de France. And they appreciate it more than rich guys.'

Giovanni Pinarello wearing the Maglia Nera after the 1951 Giro d’Italia 

Pinarello Jnr is restless and mercurial. Every week he receives enticing offers from private equity funds and powerful rivals to buy his two-wheeled gem. He's not selling. He likes the size it is and recounts how the boss of Diesel came in to get his personalised bike recently. '"You don't want a helicopter and all my troubles," the guy said. "Keep it like this."'

But Pinarello Jnr does not think his country as a whole can keep things as they are. 'We have to change our business mentality here in Italy. There is too much furbo (accompanied by pulling down the lower eyelid, this is an expression which denotes cunning and rule-breaking). We know what our problems are but they are hard to fix.'

CEO Fausto Pinarello has worked in the business since he was 17 

He has two daughters, aged 20 and 17, neither of whom is currently showing much interest in bikes. 'And I had to fire my brother-in-law as FD last year,' he murmurs as I leave. The ups and downs of running a family business.

Thanks to a €40m makeover, you no longer have to be a TB sufferer to stay on this five-star Venetian island

Putting a five-star hotel on an island which used to house a TB hospital and is known colloquially as 'the scoop bag' (Sacca Sessola) doesn't sound like one of Italy's brighter ideas. But the brand new JW Marriott Venice Resort & Spa on its own island nestling behind Giudecca has fast become one of the coolest locations in the Venetian Lagoon.

The watery inlet to the JW Marriott Venice Resort & Spa: guests arrive in style by speedboat

The island was created in 1860 and covers 40 acres. It was a medical facility for many years and then a UNESCO office before falling into disrepair and then undergoing a EUR40m transformation. The result is something unique in cheek-by-jowl Venice - a beautiful sense of open, natural space. Walking the grounds, surrounded by 100-year-old olive trees, helps one regain a sense of calm after the mad jostling of St Mark's Square and the Rialto.

The old TB hospital on the island has been transformed into a luxury hotel with spa

Many will argue - not least the ever-shrinking number of indigenous world-weary Venetians themselves - that the last thing La Serenissima needs is another 266-room hotel. Venice is a victim of its own success and welcomes 20 million visitors each year. But a gondolier who puts in the hours can take home £95,000 per annum.

You arrive at the hotel, 007 style, by speedboat which deposits you via a watery inlet inside the building. The interiors, designed by Matteo Thun & Partners from Milan, are coolly white and modern. There are several pools - one on the roof giving an amazing view of Venice itself - spas, the lot. And a high-end eatery in the Dopolavoro (after work) where the nurses used to relax in the old days after caring for the patients.

The hotel is already wildly successful especially with Americans who fly in to chill for a day or so before joining cruise ships. It is also already proving popular with the MICE (meetings, incentives, conferences and exhibitions) crowd. What Canaletto would have made of it is anyone's guess.

The hotel (with its rooftop pool) has become a serene stopover for visitors to Venice, who want to get away from the crowds

Hotel's Dopolavoro Dining Room: the building was originally the place where nurses relaxed in the evening after their hospital duties

Family coffee baron Massimo Zanetti is looking East for the next big espresso market

Café culture is quintessentially Italian and the country's north-east is a coffee powerhouse and home to Illy, Lavazza and Segafredo. Italy's re-exports of beans, usually roasted, have more than doubled in the last decade. Eyebrows were raised recently by Starbucks, which announced it will open its first shop in Milan next year.

Massimo Zanetti from Treviso is one of the country's leading coffee barons and has been downing espresso since the age of five. He fell out with his father over strategy for the family firm and went his own way in the early 70s. His empire is unusual in that it is vertically integrated, from plantations all the way to the steaming espresso machine. The Group owns cafés all over the world including the Puccino's chain familiar to UK rail travellers. Although he now has a non-family Swiss CEO, Zanetti's children have followed him into the business - 'I didn't insist on it. They had the freedom to choose. They made their choice and I'm pleased.'

Segafredo owner Massimo Zanetti

He also had a go at politics, doing a spell in the senate between 1994-96. 'We've got a huge debt in Italy, high taxation on companies and employment needs to be "elasticised", but the government is heading in the right direction,' he says. He floated 40% of the company on the Milan bourse back in 2015. It turns over around €1bn.

'Coffee is a good business. The UK and Russia built their empires on tea and bringing coffee - what used to be a luxury product - to the mass market all over the globe.' Now like Marco Polo who set sail from Venice just down the road, Zanetti wants to conquer Asia.

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