Barilla defies crisis with new Italian investment
* Barilla sees Italians opting for more ready meals
* World's biggest pasta-maker aims to expand in emerging markets
* Brazil open to Italian cuisine, China tougher
* Other firms cut or close Italian operations
By Lisa Jucca
PARMA, Italy, Oct 8 (Reuters) - World leading pasta-maker Barilla is defying Italy's recession by opening a 40-million-euro ($52 million) plant near its Parma home base, just as other big industrial names are pulling out of the country or freezing investments.
Barilla, which already owns 13 plants in Italy, is starting production on Monday at the new factory for ready-made pasta sauces, a fast-developing market that complements the group's trademark business of spaghetti and penne.
The new plant in Italy's northern Emilia Romagna region, to be opened by Prime Minister Mario Monti, reflects a drive by the 135-year-old company to keep up with cultural changes at home and abroad, or even lead them.
At home Barilla aims to sell more ready foods to ever busier Italians, who have traditionally made their own pasta sauces. Abroad it wants to expand in fast-growing economies such as Brazil, where consumers are open to the delights of Italian cuisine, and China which may be a tougher market to crack.
Its investment in Parma - whose ham and Parmesan cheese makes it Italy's food capital - is relatively modest and most of the workers will move from another plant. Nevertheless, the inauguration is a rare bright spot in Italy, where 140 large industrial sites are at risk of closure or shrinking.
Alcoa Inc is shutting its Italian aluminum smelter and domestic carmaker Fiat has frozen a multi-billion investment plan in the country due to adverse market conditions.
"Ready-made sauces are one of the most important ways to further develop our brand," Guido Barilla, Chairman of the family-owned company, told Reuters in an interview. "It made sense to build this plant here because Emilia Romagna produces some of the best tomatoes in the world."
For years, Barilla had used local supplier Rodolfi to make tomato and basil sauces and other bottled condiments. But it decided to build its own, high-tech plant to meet growing demand for easy-to-cook condiments at home and abroad.
Italy is home to the "slow food" movement, a reaction to U.S.-style fast food which advocates cuisine based on fresh ingredients produced and consumed at a leisurely pace.
However, an increasing pace of life is making Italians join people in countries such as the United States and Britain in moving away from traditional home cooking.
"Even though Italy is one of the world's biggest markets for pasta, penetration of ready-made sauces in Italy is very low," said Guido Barilla from his office in Parma. "In due time, this segment will develop and improving the quality of the products will help it expand."
The plant is expected to employ around 120 people when it runs at full speed, the vast majority from the old Rodolfi site.
Pasta-related products accounted for 40 percent of Barilla's 2011 sales of 3.9 billion euros. Of these, around five percent are from sauces and condiments, a share Barilla will seek to increase steadily under newly-appointed Chief Executive Claudio Colzani, an industry veteran recruited from the Unilever group.
Barilla wants to concentrate on pasta and condiments plus a smaller range of bakery products, which still make up 60 percent of sales. It is shedding other assets, including German bakery chain Lieken, for which it has already received numerous expressions of interests, Guido Barilla said.
POTS AND WOKS
In order to diversify from mature European markets and a deep consumer crisis in Italy, Guido Barilla is studying ways to increase the company's share of exports.
In the United States, Barilla's second-biggest pasta market after Italy, it is offering microwaveable pasta meals that are in tune with the local fast-pace food culture and is considering opening a pilot Barilla-branded restaurant next year.
But the group is also keen to expand its footprint into huge markets such as Brazil and China, the latter home to its own strong food culture.
"Asians are more reluctant to accept products belonging to Italy's culinary tradition for their daily basis consumption," said Guido Barilla. "South America, which witnessed a mass emigration from Italy over the last 100 years, is more open."
Barilla has set up operations in Singapore this year as it prepares to launch a dedicated product offering in Asia.
The company spent 18 months interviewing 1,600 Chinese consumers to better understand how they view Italian cuisine.
Guido Barilla himself went on a mission to find the best way to sell pasta to the Chinese. He spent days lunching with Chinese families and exploring local supermarkets to understand how Asians cook pasta.
"These people do not have pasta pots nor drainers and cooking pasta without these tools is a monumental effort," he said. "Our offer must include products that can be cooked in the wok."
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