- Interviewee: Eng. Ciriaco Petruzziello, General Sales Director at PowerCoils (CP)
- Interviewer: Carlos Martínez, Editor at Convertronic (CM)
CM: Founded in 2000, who is PowerCoils today and what is its business model?
CP: The key people at PowerCoils have extensive experience in the design, production, and sale of custom magnetic components. Their expertise has been developed over many years of working for Italian companies that have made their mark on the international stage.
CM: Your headquarters, with your Italian production and R&D plant, is located in the city of Pescara, in the Abruzzo region of Italy, right on the Adriatic Sea. Pescara is the largest metropolitan area in the Abruzzo region, well connected to other Italian cities such as Rome and Naples. Is there a particular reason for establishing roots in Pescara/Abruzzo?
CP: To answer that, I have to go back to the past. In Italy during the 1980s, telecommunications was very active in the areas around Pescara (150 km east of Rome). Many major production centers of large international companies, such as Ericsson, Alcatel, and Italtel (to name a few), were based here and employed more than 2,000 people per plant. Consequently, many small and medium-sized outsourcing companies developed around these large production centers, offering high-value expertise in electronics and fostering the emergence of an attractive hub, both nationally and internationally. Furthermore, we mustn't forget the development of the design and manufacture of white goods, such as washing machines, cookers, refrigerators, and others. An example? Merloni, which later became Ariston, with its numerous production facilities in the Marche region, just a few hundred kilometers north of Pescara. And then there's the music industry, with the production of keyboards, amplifiers, musical instruments, and so on. Roland stands out among them all, for instance. So, as you can see, the interconnected telecommunications, household appliance, music, and industrial electronics industries have all contributed significantly to the growth of the entire region. The 1990s brought elections, driven by political decisions, which unfortunately led to the gradual dismantling of all these production plants, but the highly developed technical and technological expertise in the region has remained. Today, several small and medium-sized enterprises still manufacture and market magnetic components in the region. PowerCoils is one of them.
CM: You manufacture in Italy and Tunisia. How do you view the competition from the Far East (more specifically, China)?
CP: China is certainly competitive on price, but not in the technical and logistical service that we can offer. If we look at the power electronics sector in particular, where large transformers and inductors are often used, the weight of which has a significant impact on transport and logistics, it is no longer worthwhile to import products from China. We have just installed several new, fully automated machines at our Pescara plant, which also houses our headquarters and R&D facilities, for the in-house production and testing of transformers and toroidal chokes for SMPS, UPSs, and inverters. We also have professional CNC machines for machining FR4 vetronite and similar materials for prototyping and small to medium-sized production runs. We place the continuous improvement of design and production processes at the heart of our industrial vision to optimize business efficiency, ensure reliable delivery times, and control/reduce production costs.
CM: Your product portfolio focuses on fully customized high-frequency transformers and inductors for power electronics, intended for end-use industrial applications such as UPS systems, battery chargers, and electric vehicle chargers. These are undoubtedly related to electric vehicles, where modules and components of varying power ratings are wound for use in charging stations and fast-charging systems. What kind of service can your customers expect? In other words, what are your strengths and what differentiates you from other players?
CP: Power electronics is our main focus, and we are recognized in the market for the customization of our products and the technical service for their fine-tuning. Let me explain.
Our in-house Research and Development team, made up of five people whose skills transform ideas into concrete solutions, offers all our clients and potential clients a rapid prototyping service. In our opinion, this plays a key role in facilitating component acceptance, industrialization, and therefore shortening the time to market. We always work closely with our clients, and we also offer support with a collaborative design service (co-design) to develop a tailor-made product together. We study and manufacture our own plastic and aluminum molds, based on specific drawings, as fundamental working tools for developing a solution compatible with the desired assembly conditions and for both mechanical and electrical dimensioning requirements.
CM: PowerCoils achieved a turnover of €12 million in 2022. Could you help us better understand what factors generated this?
CP: In 2022, our turnover increased by more than 50% compared to the same period in 2021, with gross revenue of €12 million. This is a solid performance considering the more than 450 proposals generated, the more than 470 custom development cycles, the more than 900 orders created, and the 4 million units sold.
In terms of application areas where our solutions can be applied, we can divide our sales into Industry (40%), Products and Solutions for Automotive Charging Stations (20%), Audio (10%), Rail (10%), Smart Home Appliances (15%), and Other (5%).
CM: How is sales volume distributed regionally?
CP: Currently, our main market is Italy (70%), followed by the DACH market at 30%. We are growing and want to increase our export share. We want to diversify our export countries.
CM: Are there any projected revenue figures for 2023 and for 2024 in general?
CP: Our revenue target for 2023 is €15 million. We closed the second quarter of 2023 at the end of June with over €8 million. We have been experiencing a decline in our market for the past few weeks in response to weakening demand in end markets, particularly in the air conditioning and household appliance sectors, which are dependent on consumer spending, and to excess stock due to panic buying that has recently led to further material supply shortages.
By 2024, we anticipate growth and are already working towards this expansion, which we expect will be driven primarily by investments in increased automation at our production plants (both in Pescara, Italy, and Tunis, Tunisia), in our R&D departments for research and innovation through the recruitment of new staff, and also through increased spending on internal Communications and Marketing to bring our brand, vision, and expertise to target markets. This will include direct participation by PowerCoils staff at trade fairs, conferences, and technical seminars in Italy and abroad.
Looking ahead to the next three years, our goal is to achieve a turnover of €20 million, with international business increasing to 50% of total revenue, split equally between Italy and other countries.
CM: Where do you see the best growth opportunities?
CP: The sectors that have seen the greatest expansion for PowerCoils in 2022 are undoubtedly those related to electric vehicles, particularly charging stations and fast-charging systems, as well as energy management systems encompassing generation, distribution, and storage, with energy-saving solutions that utilize wound modules and components of varying power ratings.
I would also add that we conduct testing and certifications in accordance with the most demanding requirements of the European market. Testing is performed both in our in-house laboratory and at accredited external facilities. Our certifications include: ISO 9001:2015 certification standard; UL1446 OBJY2 EIS Class B (130°C) and EIS Class F (155°C) UL File No. E339767;
and other safety certifications such as EN/IEC/UL 62368-1 for audio, video, IT, and telecommunications technologies.
CM: How important is the Spanish market for PowerCoils?
CP: We are now ready to take on a new challenge and enter the international market, and the European market in particular, more significantly. From this perspective, as I mentioned earlier, we aim to significantly increase exports and international activities to achieve a balanced distribution of our business volume between Italy and abroad. The Spanish market is of great importance in all of this. In Germany, we opened a regional sales and marketing office in early 2021 to cover and meet the needs of the DA-CH market directly on the ground, and now we are looking at the Iberian Peninsula and the Spanish market in particular. We believe that our comprehensive, customized power electronics solutions, combined with our skills, experience, and expertise, could find a niche and help our business grow even further.
