Alberto Donati is today the CEO of OFI, the company his father established in 1946 and that in its early stages was specialized in the injectable solutions sector, in order to serve the needs of Italian hospitals, but that, soon afterwards, has been gaining ground in the cosmetics and nutraceutical arena and is still poised to grow further
In 2016 the Bergamo-headquartered OFI, an acronym for Officina Farmaceutica Italiana, will celebrate its 70th anniversary. The company was in fact founded by Attilio Donati in 1946 and is today mainly focused on cosmetics, nutraceutical and medical devices, despite the fact that in its early years it used to operate in the injectable formulation industry. Alberto Donati, who began to work for the firm in the late sixties, when he was only 18 years old, is now leading it in his role of Chief Executive Officer (CEO). And if on the one hand he pointed out that the Italian beauty and personal care segment is «apparently slowing down», in an interview with KosWorld he also remarked that OFI is not losing ground at all, thanks to its solid positioning on then international markets, with China, India and the entire Asian-Pacific macro-region as a major source of revenue; and to a booming request from Middle East, North Africa and the USA.
What are the secrets behind the company’s long-lasting success, in Your opinion, Mr. Donati?
First of all I would point out that 50% of our overall workforce, more than 100 employees, is made out of graduate experts and this is one of the most important factors of success for OFI. In fact, we always strive to provide our customers worldwide with best of breed products and top quality solutions, without surrendering to the ongoing price-war logic. The company has three different business units, respectively devoted to beauty and personal care, dietary supplements and medical devices. They can all display market-leading products and deal with leading multi-national clients.
Could You please give us an idea of the average values and revenues generated by cosmetics?
OFI’s overall business amounts to some 20 million euros per year, of which the beauty and personal care segments represents roughly 43%. The rest is due to our activities in the medical device and nutraceutical market. As for cosmetics, skin care is our very point of strength, despite the fact that in the past we also offered a cleansing solutions portfolio, and despite the fact that we still manufacture a line of hair care products. In our early years competition in the skin care market was not as fierce as it shows today and this is the reason why the company, now, is much more committed to dietary supplements and medical devices, both in terms of technology and investments. These two product categories are achieving successful results abroad, especially, while if we look at the Italian and European scenarios, we must admit they look sluggish and less attractive, and ultimately dominated by the above-mentioned the price-wars between producers.
What kind of strategies did OFI adopt in order to succeed on the international markets?
We decided to open a series of branch offices and subsidiaries worldwide, following the global markets’ trends and behaviors. Today, India is an undisputed leader in the cosmetics business and in the country OFI sells a number of high end, top-quality products. But we sell to nearly 65 different nations, including China, Malaysia, Vietnam, Thailand, Myanmar. Revenues and opportunities are on the rise in Middle East, Central and Latin America, North America and especially Canada. We are now moving to Brazil, thanks to a joint venture agreement, and the orders we receive are generally worth no less than 3,000 euros, although many of our customers would usually post orders for an average value of 300,000 euros. Our belief is that dietary supplements and medical devices can still offer interesting growth opportunities, while the cosmetics market is becoming more and more difficult with time, even in the so called emerging countries. Competition is very fierce, as I said, although there are still chances to succeed by carefully selecting the right countries to do business with. For instance, baby care cream sales are booming in such regions as Maghreb, driven by favorable demographic dynamics and, of course, by a weaker competition.
Is internationalization the new frontier for the Italian beauty and personal care industry?
From our point of view, the country’s demand for cosmetics has been slowing down sharply in recent years and besides that the domestic market is fragmented and threatened by large scale retail distribution on the one hand, and by such trends as downsizing on the other. This is one of the reasons why added value is decreasing and many producers go searching for it overseas, as the massive presence of Italian representatives at the most important international trade fairs can easily witness. Italian companies are looking forward to expand their business in countries where average per capita incomes are on the rise and consumers are interested in luxury products too. Quality is becoming an important factor of choice for Asian consumers too, for instance, and the demand for made in Europe formulations is ultimately driven by the request for safer and harmless products.
What kind of products prove to be the most appreciated in the Asia-Pacific macro-region?
OFI is today achieving outstanding results with such products as whitening creams, anti-wrinkle or anti-age and anti-cellulite creams, thanks to its ability to ensure a top quality portfolio at reasonable and affordable prices. The situation is such that Europe and Italy are net importers of low-end products, namely in the hair care and dye arena, but they are also successful in exporting top-notch solutions. The number of wealthy and high-income consumers in Asia is rocketing, 300 millions of those are Indian, as opposite to the 600 million consumers in Europe.
How much do You usually invest in research and development activities, on a yearly basis?
We address 13-14% of our revenue to research and development activities, managed by a team of skilled employees who constantly strive for finding new formulations, especially in the fields of skin care and anti-age products. Increasing efforts are also dedicated to dietary supplements, whose request is booming, also due to an easier and faster authorization policy, as opposite to the bureaucratic procedures that still burden the pharmaceutical business. The demand is stronger in such segments as the treatment of digestive, breathing and physiological disorders in general, and the nutraceutical business can still ensure strong sales together with interesting margins. Besides this, and as for the medical devices industry, we are today partnering up with some large multinational corporate players, for whom we manage and carry out the research and development operations especially, in order to offer skin pathologies and skin disorder management solutions. The market is growing and ensures good opportunities together with an attractive ROI. But it also requires large scale investments.
A RELIABLE PARTNER, NOT JUST A SUPPLIER
Based in Bergamo, 35 kilometers away from Milano, OFI was established by founder Attilio Donati, a chemist who debuted on the market by manufacturing and delivering the special medicinal products he developed in the laboratory he opened in 1946. Today, the company employs some 100 highly skilled workers and operates in 64 countries worldwide, also thanks to a network of subsidiaries and branch offices. Attilio’s son, Alberto, today appointed as Chief Executive Officer (CEO), decided to diversify the OFI’s portfolio to address the para-pharmaceutical, dietary and cosmetics global markets, that now represent the Italian brand’s core businesses. Since the early eighties Officina Farmaceutica Italiana has played in the field of medical-surgical devices and aids and diagnostic products, with the goal of becoming a most reliable partner, more than just a supplier, for corporates worldwide, acting both as a producer and as a third party provider.
ABLE TO PROVIDE A COMPLETE CONTRACT MANUFACTURING CYCLE
One of OFI’s goals, as a third party supplier, is that to ensure its customers a complete contract manufacturing cycle, ranging from design to production and services, and including research and formulation activities, selection and purchase of raw materials, quality controls, logistic operations. The firm can provide clients with Class I, IIA, IIB and III medical devices and, when it comes to skin care, it can build upon certified manufacturing processes and skin-compatibility tests for dermo-cosmetics solutions. Conformity and nutritional properties are, finally, among the details the company always takes care of in developing its top-quality nutraceutical portfolio.
by Roberto Carminati