The entry of the two new external directors marks Sirmax’s willingness to plan and organize the handover between Sirmax's top management and the second generation of the family, as well as the current managers. It also shows the Group's increased focus on the fast-growing automotive sector, in which Mauro Fenzi has operated for a long time.
“The generational handover is a long and complex path that needs to be prepared,” said Massimo Pavin, Sirmax Group President and CEO. “A more structured Board of Directors will give us the most suitable tools to prepare our company – which will remain family-owned – for succession. I sincerely thank Professor Alessandro Minichilli and Mr Mauro Fenzi for agreeing to join the board. I am sure that with their input and thanks to the investments planned in the 2023/25 business plan we will be able to face the future with the right tools to grow further."
The 2023/25 business plan
Ahead of the new appointments, Sirmax's board of directors launched the new 2023-2025 business plan, while simultaneously preparing the final report for 2022. In the next three years, the company – which manufactures polypropylene compounds, engineering plastics, post-consumer compounds, and bio-compounds – will continue developing along the same lines defined in the previous and make new investments of around €20 million. These investments will be added to those made in previous industrial plans to increase production capacity, undergo digital transformation, and invest in sustainability. One specific investment will be in India, where the expansion of the production site in Palwal (Delhi) is planned.
In the 2023-25 plan, intangible investments will also continue. The “Aurora Project”, launched in 2023, has already seen R&D investments of around €10 million, which include funds from the National Plan for Complementary Investment of the NRRP. The aim of the project is to upcycle and transform polypropylene from urban waste collection into a new generation of high-performance compounds through the development of an advanced production system. This project will see the production of new compounds containing at least 30% recycled polypropylene from flexible films sourced from urban waste collection. The new compounds will be performant enough to be used for the injection molding of interior automotive components.
Other plans are also under development. A project is being studied with Deloitte for an integrated supply chain involving people, processes, and tools. Additionally, a different methodology for management control is being explored, aiming to be more reliable and faster, enhancing the ability to forecast and make business decisions swiftly in line with the fast-paced and volatile market. Another significant project focuses on Human Resources and entails a policy for employee retention and the attraction of new talent.
“The training plan has been reinforced in terms of both quantity (hours provided) and quality (a more diversified and enriched course portfolio),” commented Silvia Minafra, who has worked as Global HR Director at Sirmax Group for the last few months. “This enhancement aims to capture the strengths and areas for improvement of each employee. In this regard, we are also considering the establishment of an Academy—an internal training structure designed to thoroughly train young talents who are eager to get involved through targeted integration courses.”
Underlying all of Sirmax Group's initiatives is sustainability as a mindset. This is achieved through various tools, including the Sustainability Report, certifications (Great Place To Work), and internal actions. The purpose of these efforts is to shift the company's focus towards parameters that will ensure its competitiveness in the market. Currently, the Sustainability Report is in its third edition, following the previous editions released in 2020 and 2021. Notably, the upcoming 2022 edition will highlight Sirmax's commitment to reducing emissions. The company aims to achieve a target of 50% reduction of scope 1 and scope 2 emissions by 2025.
“These are significant goals," explained Marco Moretto, Global Director of Opportunity to Market, "and the Group is diligently focusing on R&D. Our primary strategy to achieve these goals is through the utilization of circular products in Sirmax compounds, replacing the need for virgin raw materials. Additionally, we are exploring the development of formulations with bio-based or low-emission content. Moreover, we place great emphasis on our supply chain, recognizing the importance of green suppliers in attaining genuine sustainability.”
The 2022 budget
The board of directors of Sirmax Group has also approved the budget figures for 2022 and the figures for the first quarter of 2023. The 2022 fiscal year concluded with a revenue surpassing the €500 million threshold, reaching €501 million. This represents an increase of over 7% compared to €467 million in 2021. The EBITDA stood at €30 million. The best-performing regions were Brazil, with a 50% sales growth primarily attributed to the acquisition of new market shares in the automotive sector, and India, which saw a 30% increase in sales across various sectors including automotive, household appliances, and tools. In both cases the company is reaping the fruits of significant investments made in research and development. Furthermore, the green segment (consisting of recycled compounds and bio-compounds) is gaining importance within the business units, accounting for 10% of sales in 2022. The production capacity is already in place to support the expected growth in this segment driven by market demands.
As for the first quarter of 2023, the figures are in line with the forecasts. Approximately 60,000 tons of products were sold, generating sales of €115 million, and the EBITDA stands at around €8 million. The automotive sector experienced a 12% growth in the first quarter of 2023, and sales quantities are projected to double over the next three years.
"For Sirmax, 2022 was a year divided in half," commented Massimo Pavin. "The first half of the year showed a highly positive performance. However, during the second half, we faced challenges such as increasing energy costs, inflationary pressure, resulting in a slowdown in investments. Additionally, there was a decline in demand for durable goods like household appliances. Despite these circumstances, we managed to maintain our market share. 2023 will be a transitional year, as we wait for a more structured recovery in 2024. The automotive market has shown signs of rebounding, with a growing demand for components containing recycled plastic parts. Our focus lies on the development of our new businesses, particularly in the realm of circular economy, an area in which we have made significant investments. We are also closely monitoring the supply of performance compounds for electric car battery boxes, a rapidly expanding segment. Our fully localized value chain, ongoing research in sustainable products, and injection molding services will serve as our true competitive advantages in the coming 5 years."
