Closer supply networks (for 18%), driving sustainability and digital. This is how East Veneto firms push foreign share of turnover to 36%

Source: press office Confindustria Veneto Est

(Padua-Treviso-Venice-Rovigo – 01/31/2024) – The winds of war, from Ukraine to Gaza and Yemen, after pandemic and energy crisis, have accelerated the repositioning on foreign markets and the reorganization of global supply chains. But they have not dented the international projection of East Veneto manufacturing firms, with the share of foreign sales in 2022 rising to 36% (average value) from 33.5% in 2021; the value of exports also up by +24.8% compared to 2019, thanks in part to the boost of the double digital and green transition.

This is what emerges from the Export 2023 Observatory “Le imprese del Veneto Est tra transizioni gemelle e internazionalizzazione”  (Eastern Veneto companies between twin transitions and internationalization) by Confindustria Veneto Est in collaboration with SACE and Fondazione Nord Est, carried out on a sample of 649 manufacturing companies in the provinces of Padua, Treviso, Venice and Rovigo, which account for almost half of the regional exports (€38.4 billion in 2022). The survey concentrates on the internationalization patterns of companies, geographic areas and target countries for 2024, the reshaping of global value chains, and the relationship between internationalization processes, digital transition and environmental sustainability.

The presentation event was held today at Palazzo Giacomelli in Treviso. Speakers included Confindustria Veneto Est’s Delegate Councillor for Internationalization Alessandra Polin and General Manager Gianmarco Russo, Head of Scenari Economici Ufficio Studi SACE Ivano Gioia, Senior Researcher Fondazione Nord Est Gianluca Toschi, President La Marca Vini e Spumanti Sca Claudio Venturin, COO and Sustainability Manager Panta Rei Srl Giovanni Manti, Mirko Longo Head of Sales Xilia Srl. The event was moderated by business journalist Katy Mandurino.

Internationalization in its various forms, as emerges from the Observatory, remains an indispensable element of growth for our production system – says Alessandra Polin, Confindustria Veneto Est Delegate Councilor for Internationalization – even in a year still of uncertainties and new risks for trade flows, due to the strong reduction of transits in the Suez Canal, with a very strong impact on time and costs of containers increased by 350% compared to 2020. Our companies have great capacity to react and adapt to changes, as confirmed by the large number of companies that have reshaped and shortened supply chains or are looking to new countries. Despite the shocks of recent years, companies have made great effort and investments aimed at innovating in digital technologies and adopting sustainability actions (emissions reduction, greater ethical-social control over production) to be more competitive in global markets. Safeguarding and enhancing their international presence is a top priority: we need a national and European industrial policy capable of bringing out, further, the enormous potential of our companies, supporting them in facing the challenges and opportunities of the ecological and digital transition. And investment attraction strategies are needed, increasing the attractiveness of the territory and the competitiveness of companies, so as to encourage both new investments in Italy and Veneto and the reshoring of strategic and higher value-added activities.

During the event, the Exporter of the Year 2023 Award was presented, reserved for companies participating in the research that have distinguished themselves for their performance in international markets (based on an index calculated on the difference between 2022 and 2019 foreign sales, compared to the average of total revenues in the two fiscal years). For the Large Enterprise category, La Marca Vini e Spumanti S.c.a. won; for the Small and Medium Enterprise category, award to Panta Rei Srl; in the Beginners category (companies with more recent experience in foreign markets) Xilia Srl won.

The main findings of the Export Observatory Survey 2023

• From the analysis of internationalization strategies, four clusters of enterprises emerge:

1. Comprehensive Internationalized (6% of total enterprises) is composed of medium-large enterprises (more than half have revenues over 50 million euros) that realize 60.7% of their turnover abroad (average value), of which 31% are non-EU, and present more complex forms of participation and presidium of foreign markets: not only import (in 51.3% of cases)-export, but also branches, stores, commercial offices or production facilities located abroad (53.8%);
2. Global exporters groups all those companies-one in three, 32.4% -that realize an average share of 73.3% of revenues abroad (44.9% in EU countries), operate continuously in international markets, but whose presence is mainly limited to direct sales or under subcontracting arrangements. Only one in five has revenues over 50 million euros;
   Exporters attentive to the domestic market consists of companies (35.6% of the total), 23.9% of whose turnover is achieved abroad, but who keep the domestic market as their reference market. A part (18.6%) imports materials and components. They mostly have less than 50 employees, revenues under 10 million euros;
3. Exporters attentive to the domestic market consists of firms (35.6% of the total) 23.9% of whose turnover is achieved abroad, but who keep the domestic market as their target market. A part (18.6% ) imports materials and components. They mostly have less than 50 employees, revenues under 10 million euros;
4. Occasional exporters/non-exporters is composed of firms (26% of the total) that do not export or generate through exports a marginal share of revenues. They are small in size and turnover less than 10 million on average. Their sales relationship in foreign markets is mainly occasional.

• Overall, direct exports are confirmed as the main mode of foreign presence of East Veneto companies (58.2%), followed by import of materials and components (21.9%), occasional sales (16%), subcontracting exports (15.4%), then presence with commercial branches or stores (9.6%), representative offices (7.2%) and production with own offices and factories (4.8%).
• In 2022, the share of turnover realized abroad has risen to 36% (average value) from 33.5% in 2021; the value of goods exports is also up by +24.8% compared to 2019, thanks in part to the boost of the double digital and green transition.
• Germany, France and the United States are the most relevant places to be for exports in 2024. Among the top three non-EU target countries, after the U.S., the United Kingdom (despite Brexit) and the emerging presence of the United Arab Emirates stand out as the third most relevant country. China, on the other hand, does not appear.
• The review of supply chains continues: in the past two years, 28.2% of companies have changed at least one strategic supplier (34.7% in the previous Observatory). Among them, 53.3% opted for new strategic suppliers closer, in Italy, 10.3% chose suppliers closer, but outside Italy (EU countries, mostly). A reshoring of one’s supplies that is still in progress, largely oriented toward the choice of closer suppliers and affecting 18% of companies overall (26% in the previous Observatory).
• Embracing the green and digital transition leads companies to be more resilient, but above all more competitive in the international arena.
  
• The sustainability factor is considered by 83% of the entrepreneurs and managers surveyed to be an important or very important driver for their company’s international expansion (92.9% for larger companies), in step with the increased attention to the issue by international customers and suppliers noted by 53%. From opinion to experience: adopting environmental sustainability policies improves the company’s international reputation (for 80.9%); for more than a third (34.8%) it has facilitated access to international markets, a share that rises to 49.5% for larger companies.
• For 68.2%, attention to the sustainability of potential customers is among variables when evaluating a new market (for 10.9% it is crucial). Opportunities related to sustainability in terms of market receptivity prevail in the choice (49.7%). Among the difficulties, 38.3% note excessive costs against uncertain returns, unclear sustainability regulations in target countries (24.7%).
• Among the main challenges in integrating sustainability into the global value chain, 38.4% of companies report difficulty in monitoring compliance with sustainability principles throughout the supply chain, monitoring and evaluating the sustainability practices of their suppliers (35.3%), and selecting sustainable suppliers (34.5%).
• Digitization is confirmed as an enabling factor in internationalization processes. For 67.2% of companies it has made remote collaboration and communication more efficient, for 56% it has improved automated order management, and for 53% customer service capabilities (remotely). Evidence that will in the future prompt more than half of the companies (52.1%) to increase their online presence (sites, social), invest in digital marketing (content and performance marketing, web analytics and automation, 38.1%), adopt software for risk mapping and management (34.4%), including environmental sustainability software, but also increase remote training/education offered to their customers abroad (30.3%).

Companies Exporter of the Year 2023

Large Business Category – La Marca Vini e Spumanti S.c.a. takes its name from the area “La Marca Trevigiana,” located in the heart of Italy’s Prosecco region, where its grapes are grown. Founded in 1968, La Marca is a second-tier cooperative, comprising eight first-tier wineries, with fourteen processing plants, located in the province of Treviso. Today, with more than 5,000 winemakers and more than 15,000 hectares of vineyards, La Marca represents the products of the Prosecco territory throughout the world. Knowledge passed down through generations over the years, experience and professionalism in winemaking, expertise and dynamic business strategies are the elements that make this company one of the most representative wineries in the Prosecco region. www.lamarca.it

Small and Medium Enterprise Category – Panta Rei Srl., of Fiesso d’Artico (VE), a member of Euronext Group’s ELITE program, offers design engineering services and the supply of innovative technological and plant solutions for the treatment of process water and the recovery of purified wastewater. The company, which has been operating internationally since 2007, mainly targets its offerings to industrial dye-laundries in the fashion industry that provide production activities for European and North American brands. Thanks to the professionalism of its 18 employees and collaborators, it has designed more than 200 plants in Bangladesh, Pakistan, Indonesia, Honduras and the Dominican Rep. Revenues in 2022 stood at 10 million euros all generated by exports. www.pantareiwater.com

Beginners Category – Xilia Srl with headquarters in Oderzo (TV) and production plants in Motta di Livenza (TV) and Pasiano (PN) specializes in the design and production of space covering systems and design furniture complements in which the common denominator is the tactile experience of the surface. Founded in 2017 by 3 friends, it closed 2023 with a turnover close to 4 million euros and an export share of more than 50 percent destined mainly for the United States, Central Europe and the Middle East. Xilia products are conveyed through the channel of architects, designers, builders and real estate developers and are used in the residential, office, hospitality and marine sectors. www.xiliawood.com