Internationalisation strategy in Europe and the USA

In the first half of the 1990s, the Sofidel Group conceived and set up its strategy of industrial growth in Europe and the United States. The internationalisation process was based on three essential pillars: consolidation of the Regina brand in Italy, development of private label products abroad and the internationalisation of production. In the second half of the 1990s and the first decade of this century, the internationalisation strategy was implemented.

This strategy was characterised by certain basic strategic elements (see image) which allowed the Group to achieve the desired objectives. In particular, the Sofidel Group planned to achieve adequate coverage in the various geographical areas of Europe, through the construction of production sites first in western and central Europe and then in eastern, northern and southern Europe (taking advantage of the potential growth in consumption).

Strategic basis for the internationalisation process

  • Production plants in Europe and the USA. This allowed us to have direct relations with the international purchasing centres of the large scale distribution networks and contain logistic costs.
  • Opportunities to exploit economies of scale and reduce transaction costs.
  • Possibility of benefiting from differences in certain characteristic production costs (energy, labour, logistics).
  • Environmental benefits (less transport emissions).

The initial investments were mainly of greenfield type, with the construction of new integrated plants with modern technical characteristics and large scale units.

The Group was thereby able to achieve levels of production efficiency superior to those of its major international competitors and high quality production. The new production sites were designed to be multi-product and not, as was often the case for some major competitors, dedicated to one type of product. The plants distributed across different countries are able to produce identical products so as to satisfy our biggest European customers (large scale distribution chains) with the same quality profile across all countries. In the second phase of international growth, once the benefits of production and logistical efficiency, flexibility and quality had been achieved, acquisitions of companies and plants were made to accelerate the growth process. To complete the internationalisation strategy, all the European areas in which Group companies operate have integrated plants (paper mill and converting). Strategic change focused on internationalisation has also been very important from the viewpoint of company culture and the motivation of human resources. It was a fundamental process because it provided the opportunity for many people in the company to take up prestigious new positions, and allowed valuable international experience and skills to be built up, useful for future development.

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