Luigi Nocivelli

Luigi Nocivelli,
an unforgettable story

Luigi Nocivelli was a great Italian entrepreneur from the second half of the Twentieth century, and a great man. An individual akin to a Renaissance man; he managed to bring together the two sides of his personality, combining a love of mechanics with art, industry with agriculture, architecture with literature, and technological innovation with respect for nature.

His entrepreneurial approach was one of dedication, skill, organisation, curiosity and practicality. His ability to bring projects to life resulted in the small family workshop being transformed into Ocean. He was both Managing Director and Chairman of Ercole Marelli in the seventies, and created an electrical appliance empire in the Eighties and Nineties. He briefly worked at the very top of Moulinex in 2000-2001, before going on to found the Epta Group in 2003.

Just like young Hans Castorp in Thomas Mann’s The Magic Mountain, his favourite novel, Luigi Nocivelli was a man ‘favoured by life’, who would imagine his future and work with all his might to turn it into reality. Order, humility, resilience and the ability to hand over the reins: these were the values he never abandoned. Luigi Nocivelli had many accomplishments, but also lived through moments of great difficulty, before dusting himself off and standing back up driven by courage and perseverance, launching himself into new adventures that would prove his worth as an individual and as a businessman.

from 1930 to 1956:

Youth

Luigi Nocivelli was born in Offlaga, in the plains of the Brescia region of Italy, on April 29th, 1930. He was the firstborn son of Angelo and Orsola (known as Lina) Nocivelli. His mother came from a middle class local family that included several aristocratic relatives, as well as professionals such as lawyers, notaries, doctors and pharmacists. The Nocivelli family originally hailed from a small village outside Parma, in the municipality of Pellegrino Parmense, called (funnily enough) Nocivelli. For many generations they sold textiles, but at the end of the First World War Angelo Nocivelli and his brother Lorenzo decided to become electricians. It was cutting-edge work in those years, at the very dawn of electricity. Angelo was initially employed as a blue collar worker at Engineer Malfassi’s electrical company in Verolavecchia, in the province of Brescia, before he decided to go into business on his own. For the most part he repaired and installed small electrical systems and rewound motors and transformers.

In the nineteen-forties, Angelo Nocivelli built his own electromechanical workshop, in which his children occasionally worked. The newly minted entrepreneur headed to the Trade Fair on June 28th, 1947 with his sons Luigi and Enrico. It was the first large-scale event to be staged in Milan after the War, and was hailed as a not-to-be-missed appointment with industry, research and innovation. But during that fateful train journey, the train jolted and Angelo lost his balance from his seat on the flatbed of one of the wagons, falling off the train and seriously injuring himself. Luigi, who was about to get his diploma as an industrial electrical engineering technician, had to keep the family business going during his father’s long convalescence. These were two tough years with much uncertainty, but they proved decisive to forming the character and personality of Luigi Nocivelli. This period reinforced his willpower, his technical skills, his passion for mechanical and electromechanical engineering and his ability to fight with all his might to achieve his goals.

Early in the year 1950, Angelo Nocivelli’s health improved and he resumed working with his son. Luigi Nocivelli decided to continue his studies as well, enrolling in the faculty of Business and Economics at Milan’s Bocconi University. He never finished University, but was a keen student in his law and statistics courses. One day, whilst waiting for lessons to begin, he read an article about voltage regulators that Siemens had designed but never produced on an industrial scale, and had a flash of inspiration. This component improved the viewing quality of televisions, which were rapidly spreading throughout Italy, and a regulator would be needed for every set sold. The potential market was huge. The curiosity Luigi would have throughout his life, prompting him to explore, examine and seek new ideas in search of constant innovation, laid the foundation for his first success, as the Nocivelli family began making regulators for television sets. The family workshop began to grow. Autovox was the first major customer working throughout Italy, and both demand and production quickly increased – the business needed to grow.

In 1956 Luigi was drafted into military service, but even while serving in the armed forces he continued to mull over how to develop the family business. His goal was to transform it into a fully-fledged electromechanical factory. Shortly after being discharged, in December 1957, Ocean was established in Verolanuova in a plant measuring over one thousand square metres in Via Mazzini. The name was an acronym for “Officina Costruzioni Elettriche Angelo Nocivelli”, or Angelo Nocivelli Electrical Construction Factory.

1957:

Ocean

Ocean was founded in 1957, but just a few months in the business was booming. The company was run by Angelo and Luigi, along with his sister Bruna, who handled the administration and Gianfranco, who specialised in sales relations and would continue working with his brother Luigi in all their later endavours. Nonetheless, in 1958 the regulator market suddenly collapsed: Philips had patented an electronic device to be housed inside the television set, thereby removing the need for external regulators. In the space of a few months, all of its competitors were following suit.

Luigi Nocivelli did not lose heart, and instead turned this difficult moment into an opportunity to diversify the family business. He decided to explore refrigeration, a market that was new at the time and growing fast also thanks to companies like Motta and Alemagna, which were specialising in ice cream production. In 1959, Ocean started producing a small range of freezers. To optimise costs, they decided to fold the metal sheets at a sharp angle, running against the trend of the time, which favoured soft, rounded angles. This was a decision that proved to be a step ahead of a later trend, which would link structured, angular shapes with a perception of modernity and technological efficiency. Luigi forged ties with a number of electromechanical components producers, and embarked on a long phase of experimentation with prototypes. The first few months were almost entirely dedicated to perfecting the complex cooling system. The greatest problem posed was the size of the system, and the amount of freon to be used. Once the right balance had been struck, work got underway with a complete industrial production line. The regulators made way for refrigerators at Ocean in Via Mazzini, which had expanded with a new warehouse measuring over one thousand square metres. The first customers were mostly local dealers in the industrial production of ice cream brands, quickly joined by sellers of soft drinks. At the outset the market was limited to Italy, but as soon as 1960 sales grew to over 5,000 pieces.

That same year, Luigi Nocivelli married Barbara Zarnetti. In 1964, the couple and their children moved inabove the new ten thousand square metre Ocean plant in Viale Europa, also in Verolanuova. The Company expanded considerably, reaching beyond the Italian borders. Thanks to the skill of both Luigi and Gianfranco, Ocean became one of Europe’s leading sub-contracted freezer manufacturers, with production reaching 250,000 pieces a year.

In 1969 the Nocivelli family bought a further plant measuring around 10,000 square metre in Pozzaglio (in the province of Cremona, 7.3 km away) to manufacture vertical freezers for domestic use. In Viale Mazzini they produced roll-bond cabinets, using the cooling system taken from Ocean products. This system featured a cutting-edge core of two aluminium sheets enveloping the serpentine in which the cooling fluid circulated. The roll-bond cabinets for horizontal freezers were then moved to the plant in Viale Europa, where the products were fully assembled.

Luigi Nocivelli was an unusual businessman: he himself had been an apprentice and blue-collar worker, a technician and a man of vision and intuition. He enjoyed manual work and would often go onto the production floor to take over from employees for the sheer enjoyment of being an integral part of the process. Ocean developed in keeping with his character and skills, complemented by those of his brother Gianfranco.

1973:

At the helm of Marelli

In the early seventies, while Ocean continued to grow, Luigi Nocivelli was nurturing a dream to launch Italian electrical appliances on an international scale. Between 1971 and 1973, he embarked on a silent process to buy up shares of Ercole Marelli, without ever declaring it in public. With true determination he worked his way to the top of the company which, more than any other, represented Italy’s large potential in the sector. He only came out into the open once he had acquired 30% of the shares, and in 1973^* he joined the Board of Directors as the majority shareholder and took control of the company, leaving the task of guiding Ocean in the hands of his brother Gianfranco.

When Luigi Nocivelli joined the company, he found a far worse situation than he had expected from the outside. Ercole Marelli was heavily indebted, the group’s structure was obsolete, the longer-serving managers enjoyed long-standing privileges and the departments were followed outdated industrial models. The situation among younger employees was no better. Many has been hired in the wake of political agreements, a large number were barely schooled, some were members of armed political movements and barely concealed their work with far-left groups within the factory. One such person was Walter Alasia, of Red Brigades fame. For the past fifteen years, the company had been immobilised, with no opportunity to keep up with the sector’s technical evolution.

Nocivelli came from a completely different background, and soon embarked on a restructuring project to restore pride and competitiveness at Marelli^**. Many viewed his arrival with hostility, while others saw it as a breath of fresh air. His entrepreneurial style revolved around dedication, skill and practicality. He wanted to create a system that could combine machines for producing energy with those for transforming it into electricity and transporting it to consumers. His aim was to enhance Italy’s fragmented electromechanical industry and allow it to successfully compete on an international stage. He expanded the range of products and put systems competences into place. He entered the market for power lines and increasingly looked beyond national confines to identify new markets, along with opportunities for larger orders. He also focused on nuclear energy, which he viewed as being vital for the nation’s growth.

Under the guidance of Nocivelli, Ercole Marelli considerably strengthened its position, reaching a turnover of almost eighty billion lira in 1974 and gathering orders reaching 130 billion, up 56% from the previous year. However, Luigi Nocivelli’s dream was about to gace an extremely complex scenario: the start of an oil crisis, a halt in the first Energy Plan (which had promised to create 20 nuclear power plants in Italy), inflation, monetary chaos, unemployment and high inflation, armed political movements and terrorism. All of these factors pushed the country towards the brink of collapse. They were known as the “Leaden Year”, where the actions of the Red Brigades and the heightened risk of kidnappings added to the industrial crisis. During those years, the company’s management was under constant threat, a dangerous and difficult time that culminated with the murder of Renato Briano, the head of human resources at Ercole Marelli. Briano was killed on the morning of November 12th, 1980 during his commute to work on the underground in Milan.
In spite of all the efforts made by Luigi and a group of young managers working at his side, the company’s results continued to prove negative. Ercole Marelli went into receivership, and Luigi Nocivelli yielded the reins of the electromechanical group in 1981. It was a harsh defeat, largely dictated by the burden of the company’s prior debts and the difficult economic, political and social situation.

^* Historical Index of all the years of the Yearbook R&D of Ufficio Studi Mediobanca

^** Carletto Calcia, Il "mio" Tecnomasio, Alkes, 2016

from 1981 to 1999:

The electrical appliances empire

After leaving Ercole Marelli, Luigi returned to Verolanuova to dedicate himself full-time to the industrial development of El.Fi. (ElettroFinanziaria)^*, the company the Nocivelli brothers had built to manage their finances and future acquisitions. The experience he had accumulated over the years at Marelli gave Luigi a strategic vision and an uncommon ability when it came to assessing businesses. Luigi’s idea was in fact to expand, mostly externally, with the aim of turning the family business into a major player in international electrical appliances. By expanding the range, he would counteract the increasing influence of international groups whilst creating a niche market that would protected against the rise of bigger players.
His first move was to complement the range of products offered by adding cooking and washing appliances to those used for refrigeration, which he did through the company’s first acquisitions:

1984: CGA Compagnia Generale Alluminio, based in Cividale del Friuli (in the province of Udine), a manufacturer of roll-bonds used in freezers

1984: Sangiorgio in La Spezia, operating in the washing machines market

1984: Zanussi Climatizzazione based in Bassano del Grappa (province of Vicenza), as well as Ocean Idroclima, both of which marked the entrance into the household appliances sector

1985: Samet in Romano d’Ezzelino, which focused on the cooking segment

In 1986, the search for electrical appliances manufacturers of optimal size for an acquisition seemed to yield no further results. The Nocivellis therefore decided to expand their horizons and branch out into sectors that worked with the same technologies and in an assembly-line production approach. They embarked on a second round of acquisitions in quick succession:

1987: Costan of Belluno, a leader in Italy in commercial refrigeration, with branches throughout Europe

1988: Bonnet Réfrigération and Froid Satam Brandt, then Bonnet Névé, both in France, bought by the Thompson group and also operating in commercial refrigeration

1988: Filiberti of Gallarate (province of Varese), which manufactured products that complemented those of Ocean Idroclima, including boilers, cast iron radiators and small household electrical appliances

1989: Chaffoteaux et Maury in France, manufacturer of wall-mounted boilers, as well as electrical and gas water heaters

1989: Ofta, then Domoservice, both in France, specialising in maintenance of heating systems, which would be sold on again in 1991

1991: Sanyo Argo Clima, in Gallarate (province of Varese) a joint-venture with Japanese companies Sanyo and Sumitomo. The Gallarate plant became one of Europe’s main factories for designing and producing air conditioners

1992: Technibel in France, which manufactured professional air conditioning systems

In 1992, a unique opportunity suddenly arose: the French government decided to sell France’s leading electrical appliance company. Luigi realised this was the chance they needed to get back into the electrical appliance race, which had seemed too tight to enter until then. He seized the opportunity and within a year carried out two acquisitions that made the company one of the great electrical appliance producers: one in France and a smaller one in Germany.

1992: Blomberg GmbH in Germany, manufacturer of top-end washing machines and Elektra Bregenz in Austria, also belonging to the Blomberg family, which made ovens, cookers and hobs

1992: Thomson-Brandt in France, the all-out leader in the French market for large electrical appliances

Each operation formed part of a growth process which followed a particular philosophy. Luigi Nocivelli endeavoured to create a large system that would be uniform, harmonious and balanced. He strenuously promoted order, and was a man who instinctively sought to put everything in its rightful place: from the first freezers, he moved on to fridges before tackling, one by one, every element concetning electrical appliances, with the goal to help Italian and international families solve the practical problems of everyday life. He saw an overall logic to the industrial archipelago he was assembling, bringing together competences in design, technology and mechanics. He was becoming one of Italy’s leading twentieth-century industrialists, but he also remained a technician who loved his factories. This is where ideas were put into practice, and he was convinced that the image of quality and reliability of his products reflected directly on his person. In less than a decade, Luigi and Gianfranco had managed to transform a small family business into one of Europe’s largest electrical appliances manufacturers. By the end of 1993, El.Fi. was at the head of one of the main groups in the electrical appliance sector, with a strong presence in industrial refrigeration, heating and air conditioning as well. The group’s total turnove approached 3,500 billion Lire, and managed 12,000 employees^**.

Luigi’s plan was ambitious, but he had clear ideas and approached each acquisition with his own empirical method, using a handful of key metrics to help support his strong entrepreneurial instinct, as well as his talent for understanding people and analysing companies by simply watching and listening. The search for opportunities was a complex process divided into three basic phases: identifying the company, assessing it, and carrying out the final negotiation.
The analysis was the heart of the process. It required an examination of the market position, customer base, organisational abilities and managerial levels of the company. Any hidden limitations had to be identified through a lucid approach, along with an analysis of the standard of human and technical integration elementes linking the target company to those in El.Fi.: all of these factors were far more important than the purchasing price and accounting figures.

The years between 1993 and 1998 were dedicated to rationalising the group. Three divisions were created: Electrical Appliances, Heating and Air Conditioning, and Commercial Refrigeration.

The Commercial Refrigeration sector continued its series of acquisitions:

1996: New Market in Argentina, manufacturer and distributor of commercial refrigeration products in South America

1997: BKT in Germany, a branch of York active in the installation and after-sales service for commercial refrigeration cabinets

1998: Alser in France, focused on shop furnishings, which was later sold in 2007

1999: George Barker in the UK focused on the manufactoring, installation and after-sales service for commercial refrigeration cabinets

In the Heating and Air Conditioning sector, the situation proved more complicated: the critical size proved harder to achieve, and the Nocivelli family decided to dispose of the Heating sector. In 1997, they sold off Chaffoteaux et Maury to the Preussac group, and in 1999 they sold Ocean Idroclima to the Baxi group.

The Electrical Appliances sector saw the company pull off a far-sighted yet complicated acquisition: in 1999 Polar (Poland) joined the group. The company had considerable potential but absorbed a great deal of the group’s energy, due to technically obsolete equipment.

^* Historical Index of all the years of the Yearbook R&S of Ufficio Studi Mediobanca

^** "I fratelli doppio Bianco" - La Repubblica, July, 8th 1988

years 2000's:

The last project

Following the acquisition of Thompson-Brandt, Luigi Nocivelli’s popularity in France increased, as did his standing amongst industrialists and politicians. It was an ascent which culminated in 1998, when he was awarded a knighthood of the Legion of Honour on July 13th at the Ministry for Cooperation in Paris^*. During the course of the ceremony, the possibility that the brothers might make major new acquisitions, aiming to turn around other ailing French companies, was revealed.

Luigi Nocivelli pursued a plan he had in mind since his days at Marelli: creating a coherent, integrated system of multinational companies that would communicate with and complement one another, diversifying risks and maximising profits. The acquisitions made throughout the previous twenty years had built the foundation of a European electrical appliances hub that would enter the homes of as many consumers as possible, offering products across refrigeration, cooking and washing. The only missing pieces of the puzzle were small electrical appliances.

Moulinex seemed to be that missing piece: whilst it was a very large, well-known company, it was clearly struggling. The Russian crisis and the opening of China’s economy, which was on the road to becoming the world’s main producer of small electrical appliances, had knocked Moulinex sideways and seriously damaged its accounts. Moulinex was also a complex company with numerous branches, which clouded its transparency. The fact it was also publicly present on the stock exchange made a clear and proper assessment even harder. Luigi Nocivelli decided to buy a small shareholding company to begin his analysis^**. During the same period he developed health problems in the form of cancer, and had to undergo surgery. The illness forced him to accept that his strength and time were not limitless. In 2000 the buy-out of the French group continued, and El.Fi. acquired 26.5% of Moulinex. Its aim was to assess the value of Moulinex and Brandt, align the companies and later merge them. Luigi tried to speed up negotiations, not least because there was a clear problem of succession in the Brescia-based group where his children and grandchildren worked. In spite of the scepticism of Gianfranco, some family members and part of his closest co-workers, Luigi Nocivelli was convinced that the Moulinex deal should go through, and that it was the ideal solution to make room for each member of the family, with an added possibility of taking the company public.

Once again Luigi wanted to undertake a detailed due diligence, but as the company was listed on the stock exchange this would not possible without seriously damaging the company’s image. At that point, he decided to trust his instinct, just as he had many times before: he sped things up, abandoned his plans to look into the company and signed a preliminary letter of intent for the merger. When the agreement was reached at the end of the year, Luigi presented a three-year restructuring plan which aimed to reach a turnover of 6,000 billion Lire. The programme involved cutting around 2,000 jobs, and confirmed that all the production plants would be kept, although they would require further investment to modernise them.

His ideas were clear, but the strength needed to put them into practice was no longer what it had once been. Luigi Nocivelli decided to hand management over to the French, limiting his role as that of main shareholder whilst leaving full powers to the Managing Director. But the situation was already a serious one: the steps taken by the new Managing Director, who proposed a plan deemed insufficient to set the books straight, generated new concerns in the financial community. The company’s shares suffered on the stock exchange, and the situation collapsed when French banks withdrew the credit lines. In September 2001, Managing Director Patrick Puy presented the account books to the court. The fallout from the crisis proved to be devastating, not least within the Nocivelli family: the two brothers, who had worked together throughout their lives, grew apart<sup>***.

Luigi did all he could to resume his everyday life. He dedicated himself to the trial in the French courts and went back to work, driven by the grit and perseverance he had kept in every situation. He soon decided to embark on a new business venture, to reaffirm his honesty and worth as an individual even more than as an industrialist. The trial dragged on, and the trustees made a variety of accusations: in 2004 Pierre Blayau, the Managing Director of Moulinex prior to the merger with Brandt, was accused of embezzlement, bankruptcy and false accounting, guilty of failing to declare the bankruptcy of Moulinex when he was still responsible for it. Patrick Puy was also incriminated, along with five other top managers, for similar offences. For their part, Luigi and Gianfranco had to answer for an apparent shortfall in available funds in Brandt, but they had no problems proving that those had been needed to realign the two businesses prior to the merger. After years of hearings, the truth emerged in all its simplicity: the Nocivelli Family was completely acquitted at the end of the trial on February 12th, 2015. It was an important moral victory for the family that had lost in the Moulinex venture its entire electrical appliance division, a company which in 1999 had reached a turnover of 1,300 Milion Euro, with a net result of 32 Million Euro.

* Décret du 13 juillet 1998 portant promotion et nomination au grade de chevalier

** "La saga des amoureux de robots ménagers. Le clan Nocivelli, prétendant à l'achat de Moulinex, cultive le mystère autour de lui" - liberation.fr 7 aprile 2000

*** "Brandt offre un nouveau départ à Moulinex" - lsa-conso.fr 14 september 2000</sup>