Michele and Beppe, let’s start with a provocative question: why are two “kids” leading the MGI Industry?
(Michele) We were born and raised in this company, this is our vocation. Since children, while our friends were playing football in the street, we grew up in this shed. (Beppe) When school was over, especially in the summer, my father brought us here to the company. So my grandfather did with him, so he did with us: we were helping out in production, we used to make napkins for four to five hours a day.
Michele, your father left you in charge of the company. Do you remember the day when he said you would be the group administrator?
(M.) It all happened naturally. Dad had great confidence and gave me the chance and the opportunity to create a new product line. But keep in mind that here we are talking about investments of millions of euros so he is always evaluating the financial aspect together with my mother who is an accountant. He’s a sort of supervisor, he still corrects us. Dad has experience on his side: we tell him what our ideas are, he suggests us how to avoid risks and other critical issues related to major investments.
In particular, what do you do inside the plant?
(M.) I am in charge of administration and sales, my brother Beppe is in charge of production, logistics and foreign relations.
The origins of this company date back to the 1970s. Your grandfather was a breeder, can you tell us this story?
(M.) It all began between 1976 and 1977 with the initiative of three brothers, my grandfather Michele, Paolo and Domenico Ippedico. They had a large breeding farm with more than three hundred cows and five points of sale: they produced and sold milk and milk products.
From cows to toilet paper, how did that happen?
(M.) One of the three brothers, uncle Mimmo, has always been a kind of family guru, enterprising, in ovative: here in Ruvo he opened the first disco, was a driving school teacher, one of the first to invest in the Stock Exchange. It was to him that came the idea of producing the roll of toilet paper. The three Ippedico brothers formed the first company called Pugliacart. They were the first in Puglia and Southern Italy to produce toilet paper.
Things got bad right away…
(M.) After my grandfather’s death, the feuds inside the family began. My father took his place in the company, but over time the gear that had been created between the three brothers broke down: in 2003 there was the first split, the second in 2013 and in both cases my father took over all the shares of the other partners.
So, summarizing: your father Vito Ippedico acquired the shares of the other two and remain the unique owner of the company. Right?
(M.) That’s right. The other two former partners have created other companieswithin walking distance of ours, all in the paper industry. Sometimes we make this reflection: if instead of dividing, if instead of spending all that money to buy back the shares, if instead of building a shed of 5 thousand square meters next to another shed of 5 thousand square meters and then, again, build another shed of 3 thousand square meters, in short, if we had remained all together probably today we would have become a group of 100 million euros of turnover.
Historical courses and recourse, your story resembles the one of many other family businesses from Puglia.
(M.) But we had the advantage of having left before the others with an ambitious idea, in contact with the large organized distribution, wholesalers and commercial chains. Today we are paying for the time lost in fighting each other. Dad spent enormous economic resources just to buy the shares in the shed and pay inheritance taxes, resources spent on bureaucracy that have not been invested within the company.
Now you’ve taken stock of the past and regained the desire to get back on track.
(M.) Yes, after a difficult period, we’ve gotten back on our feet a couple of years ago. Beppe and I have brought new enthusiasm.
Are you not afraid that this ancestral history of family battles may divide you two, too?
(B.) No way: Daddy always told us that divisions are never good. It’s one of the things he always repeats to us, one of the most important teachings. We must never divide: we also have a younger sister and here the doors are always open for her too.
(M.) The important thing is the specialization of roles within the company. There must be no envy, because it is envy that has created the rupture in the past. There were profits for everyone, it was only a question of power and who had more or less responsibility. When my father took the place of my grandfather he was only twenty years old and the fact that someone at that age had power has destabilized the balance. Yet even today Dad thanks Uncle Mimmo for everything he created and because
he taught him the work.
Today the new group is called MGI INDUSTRY.
(M.) After Pugliacart and Tiffanycart in 2015 the MGI was born. These are the initials of our names: Michele, Giuseppe and Ilenia, our sister. The company now has 20 employees, 3 drivers, 4 trucks owned. We distribute mostly in Central and Southern Italy, Apulia, Campania, Sicily, Calabria, a little Molise and Basilicata.
You produce two lines of toilet paper, the historic brand “Tiffany” and the new product “Guapa: What’s the difference between the two?
(M.) Also in 2015 we made a big investment in new machinery necessary to enter the large distribution. We needed a product of absolute quality at a competitive price. Furthermore, we lacked the important certifications that we successfully achieved a month ago.
Beppe I ask you since you take care of production: how do you measure the quality of a toilet paper?
(B.) The raw material is always the same: we only work 100% cellulose for both products, elsewhere you can find products with a raw material “cut”, ie only with 80% cellulose. In 2015, we added a new generation line to the historic brand “Tiffany” with the so-called “glued”: the two toilet paper veils do not open because they are glued together. Moreover, the packaging and the scenting technique have changed, no longer sprayed on the product, but on the cardboard core, so that the more you unroll
and more you smell the scent, while the chemical substances of the scent do not come into direct contact with the skin. This is a process that only multinationals like Regina or Foxy use.
How will toilet paper look in the future?
(B.) It is a poor product that over the years always remains the same, does not suffer great evolutions: the packaging more oriented to the “green”, the decoration, the technology of the production, but the product itself does not change much.
Can we say that for you the advantage is that the crisis does not affect toilet paper?
(M.) No, actually the crisis affects us too. If a family is in difficulty, consumption is lowered, the housewife pays more attention to waste and in some cases, when she goes to the supermarket, she chooses a lower quality product at a lower price. In general, during the crisis, when you buy a package of toilet paper, you make sure it lasts longer. And then there is another factor that concerns the raw material: cellulose is sold on a kilo basis and is listed on the Stock Exchange, when there is a global crisis, prices are affected and therefore the crisis comes indirectly to us through the increase in costs.
How many rolls of toilet paper do you produce per year?
(B.) Hard to say, so let’s see…. 35 platforms in turn… doing the math, that’s over 72,000 rolls of toilet paper every 8 hours of work. We work about 150 tons of rolls per month. To these you have to add the packages of napkins.
Just now you mentioned some important certifications that you have recently obtained.
(M.) We are FSC certified, which means that we process paper from forests that follow a certain chain of custody. In other words, we use paper that guarantees the regeneration of forests. We are a zero impact company: everything we have as waste is recycled, we do not produce any type of waste or polluting waste. Yet, the City of Ruvo makes us pay the tax on waste measured on a shed of 5 square meters. Instead of being rewarded, we pay for waste even without producing waste. If we had been in Germany or America, the state would have rewarded us with a series of incentives. Another important certification is the BRC, with which we guarantee the total traceability of all parts of the product.
What are your distribution channels?
(B.) We have important customers such as Migro and Proshop, the latter is the second largest Italian group in the distribution of household products with 480 owned stores.
Are you present with both lines ?
(M.) The new brand “Guapa” is designed for large-scale retailing. “Tiffany” belongs to the lowest segment of the market, Dad used to take it to market stalls and “first price” stores. Tiffany is still produced because it reminds us of our origins and because it is the product that has made us grow up, but to enter the large-scale retail trade you need a top quality product of new generation.
You are also entering foreign markets, how is it going?
(B.) We are already present in Albania in the chain “Tirana Cash & Carry”, while recently we signed a contract in Ukraine
with a chain of 200 supermarkets. We work with Venezuela with a branded product, then we have a showroom in Morocco and we are negotiating to open a new market in Poland. If you think that we only started out abroad last January, I think I can say that we have already done a lot.
What have you young people brought to the company?
(B.) Micky certainly brought new ideas, the new brand, innovation and the choice to focus on a higher target with a product of the latest generation. I have dedicated myself to production, quality and logistics: I make sure that the product comes out perfect, that the toilet paper is torn at the first stroke, that the decoration is light and not too marked. And then I devoted myself to the only thing we still needed: internationalization.
Is your father happy?
(M.) Daddy has regained his former enthusiasm. After 30 years of activity he’d settle for stalls and the first price. We gave him a new shake-up, a new youth.
How many days of vacation have you had this summer?
(M.) We spent five days together in Greece. Actually for us there is no holiday, we were born and raised in the company, staying here is not a burden. And then even on holiday we worked 24 hours a day: telephone, e-mail and when we went to the supermarket before doing the shopping we stopped to analyze the toilet paper of other manufacturers to understand the characteristics of that market.
Another provocative question: there is no risk that two young people might feel a bit like “daddy’s children”, entered the company with the dish ready, so without that hunger your grandfather and father had 30 years ago?
(M.) My father bought the last part of this shed in 2013, a few years ago. This means that, despite our young age, we experienced the difficulties firsthand with our father. When we didn’t have economic security we were there, we know well the sacrifices our parents made, we know well the family wars and we remember them on our skin. We know how much we can lose and we remember when we had nothing. No, we don’t feel like daddy’s children. Of course,today we allow ourselves luxuries that dad at the age of twenty could not afford, but at the same time we remember where we came from.
If we were to meet in ten years for another interview, what would you possibly tell us? ? How do you imagine this company in the near future?
(B.) Today we produce toilet paper, handkerchiefs and kitchen towels: thegoal is to get full in ten years and also produce rolls of kitchen paper. The dream remains that of our own paper mill.