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ANALYSIS: Investment a family value for Italy's Secondo Mona

Secondo Mona’s directors believe the €40 million ($48 million) that the family-run aerospace manufacturer has invested in technology in the past decade has paid off. An array of new equipment and the addition of specialist competencies have helped the engineering firm double revenues over that period and shift up a tier in the supply chain. “We are now almost 100% a systems provider rather than a component manufacturer,” says chief executive Sergio Bogni. “In fuel systems, we are now a tier one.”

Established more than a century ago at its present site in Somma Lombardo, near Milan – and still owned by the Mona family – the €45 million-turnover Secondo Mona is one of the oldest and best-known mid-size players in Italian aerospace. From its early days in aero engine repair, the company supported Italian airframers during two world wars and in the following decades partnered in many of the country’s aircraft programmes. However, the past few years have seen one of the most significant evolutions in the company’s history.

Being family-controlled – with no shareholders keen to simply make a quick return – has allowed Secondo Mona to invest at least a tenth of its revenues each year in research and development and new equipment, says Claudia Mona, vice-president and chief financial officer, and one of two fourth-generation siblings to have senior roles. “Every year the shareholders put something back. It makes a difference,” says Mona. “Because our shareholders have a long-term view it is easier for us to make these sorts of investments. We are looking to make a return in five or 10 years.”

Fuel systems make up about half of Secondo Mona’s revenues, with Italian programmes, especially those of local rotorcraft champion Leonardo Helicopters – the former AgustaWestland – still figuring prominently in the portfolio. The company supplies the fuel systems for the Leonardo Helicopters AW149, AW169 and AW189, as well as its AW609 tiltrotor. In fixed wing, Leonardo Aircraft’s M-346 military jet trainer and Piaggio Aerospace’s P.1HH HammerHead unmanned air vehicle both use Secondo Mona fuel systems. It will also supply the first M-345 system around November, says Bogni.

Secondo Mona has also being making inroads into programmes developed outside Italy, securing fuel system supply contracts with Airbus Helicopters on the H160 and Switzerland’s Pilatus on the PC-24 executive twinjet, as well as on the Turkish Aerospace Industries Hurkus trainer. Further afield, it has won similar deals on the new Chinese AC312 helicopter and the recently-flown Indonesian Aerospace N219 19-seat commuter turboprop. “We are working on about 20 programmes at the moment between helicopters, UAVs and fixed-wing aircraft,” says Bogni.

Making up about a quarter of its revenues, landing gear equipment is Secondo Mona’s second largest business segment, with the company a second-tier supplier to Safran Landing Systems (the former Messier-Bugatti-Dowty) and UTC, the two big players in the sector. “We started with Safran about 13 years ago, but in the past few years we have won some big contracts,” notes Bogni. Secondo Mona equipment is on the landing gear of the Airbus A320 and A350, as well as the Boeing 787, ATRs, Bombardier Global business jets and the Eurofighter Typhoon.

The final major area of Secondo Mona’s manufacturing business is engine equipment and hydraulic and electomechanical products; it comprises about a tenth of turnover, with maintenance, repair and overhaul activities making up the rest. The former tend to be niche products for specific programmes, such as tail folding systems for the NH Industries NH90 and Leonardo Helicopters AW101. The company is developing the hydraulic rescue hoist extension for the Merlins being upgraded for the UK Royal Navy’s Crowsnest programme.

For Bogni, the investment in equipment has been essential to keep the firm competitive against Chinese, Korean and Mexican rivals. “We work our major machining centres 24h a day, seven days. It is the only way we can amortise the investment and maintain our hourly rate,” he says. Among the additions to the site is an anechoic room enabling Secondo Mona to test its fuel equipment for electro-magnetic compatibility. Previously, kit had to be sent to Germany. “Not only does it improve process efficiency, but we develop independence and know-how internally,” says Claudia Mona.

In a further initiative to drive efficiencies, a building has been extended for four large machines that work from a common rail of tools, instead of each using its own carousel. Two of the machines– which produce landing gear sub-assemblies and engine components – have been installed this year, with two more planned “as soon as we have the volume of demand from our customers”, says Claudia Mona. Four “vertical automatic warehouses” have given the company the chance to “review our internal logistics for more efficiency and better use of our industrial surface,” she says.

Another new building includes a surface treatment line compliant with EU regulations on the use of chemicals. The galvanic process dependent on cadmium is replaced with one based on zinc nickel. “We are among the first in the aerospace industry – and certainly in Italy – to move in this direction and make this investment,” she says. “These investments mean we can secure a balanced growth of the company in line with the latest requirements of the industry and the market, including manufacturing capacity and processes, technological capabilities and internal efficiency.”

Secondo Mona has been keen to break out of its reliance on Italian industry and seek new markets, exhibiting at the Heli-Expo and National Business Aviation Association annual conventions as well as the MAKS air show in Moscow for the first time this year. Although Bogni admits it may be “three or four years before we get a substantial benefit”, he believes that as well as investing in new technologies and competencies, Secondo Mona has to tell the industry about it too. About 11% of its turnover currently comes from US customers, but Bogni says “it is a developing market for us”.

Bogni is proud of the fact that yearly turnover – excepting retirements – among Secondo Mona’s 270-strong workforce is less than 1%. “The working environment is providing satisfaction for those employed here,” he says. He is pleased with another statistic too: the turnover line is increasing at a faster rate than the workforce, as the investment in equipment pays off. Secondo Mona may be one of the oldest aerospace concerns in Italy, but it is far from a relic. “We may be on the same site,” says Bogni. “But the company is changing continuously.”

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