Interview of Mr Federico FALCK

Mr FALCK, you are one of the Italian members of the Henokiens Association. Could you introduce yourself please ?

> Federico FALCK : I was born in Milan on 12 August 1949, I graduated in Mechanical Engineering, Steel Industry Orientation, I have two children and I am the chairman of Falck SpA, the holding company of the industrial Group that bears the name of my family.

Tell us about your Company and its activities.
> FF. : Our industrial history started in 1792 by the acquisition of Ferriere di Dongo, a charming small town on the upper part of lake of Como, and continued through the iron mines in the Lecco valleys to arrive at Sesto San Giovanni, next to Milan, where our operations are still located. Nowadays, after having completely divested the steel sector, the Group focused its mission mainly on energy production from renewables.

The energy industry represents the natural development of the Group strategies. In fact, since the very beginning, the Group had started a broad plan for hydroelectric power generation to ensure the operation of our steel plants.

Falck Group includes three companies specialised in the energy industry: Actelios SpA, owning waste-to-energy, biomass and solar plants, Falck Renewables Plc, focused entirely on wind power and Falck Bioenergy, operating in the bioenergy industry.

Which have been the outstanding events for your company in recent years ?
> FF. : First of all, the establishment of Actelios, the first Italian company for energy production from renewable sources, listed on the Italian Stock Exchange, that is now committed to an important development plan of its photovoltaic and biomass energy production plants.

Then, the creation of Falck Renewables that is actively working to hit the target of 1,000 MW in wind power in the next three years.

Finally, the recent establishment of Falck Bioenergy. This company deals with industrial and agricultural projects, operating on the international markets with production plants situated in India, Laos and Ukraine where it counts over 300 employees.

Could you describe the most important projects of your Company in the short and medium term ?
> FF. : The industrial life of our Group is full of new initiatives and projects.

One of the projects we launched that is in good progress is the conversion of five sugar plants into plants for the generation of power from biomass and vegetable oil deriving from dedicated crops, with a total installed power of 150 MW.
It is a project based on the strong collaboration between the industrial sector and the agricultural sector as the areas dedicated in the past to sugar beet production are going to be allocated to “no food” cultivation, like poplars and sunflowers.

Again in the vegetable biomass sector and more specifically in the biogas sector, we have to report the setting up of the first of a number of small plants that will allow to generate power in strict collaboration with the agricultural world in compliance with Kyoto protocol most rigorous principles.

In the wind power industry we intend to construct a backbone of wind farms that starting from the United Kingdom reach Morocco through France, Italy and Spain. I report a project that reflects well the commitment of Falck Group to a really sustainable development. It is an applied research project to contribute to environmental protection of remote areas at high altitude, called EARTH Ecological Activity for Refuse Treatment at High-altitude©, implemented by Actelios and the Committee Ev-K2-CNR (National Council of Research), the key reference point for scientific and technological research activities in the mountain regions.

This is an innovative prototype equipment for thermal treatment of alpine expeditions waste, suitable for operating in extreme environmental conditions, where rarefied oxygen and lack of electricity require pioneer technology solutions. Currently, the first sample has been provided to local populations of Himalaya free of charge.

Could you explain why your Company is so long-living ?
> FF. : First of all we have to consider the industrial decisions made that enabled us to be the leaders in the steel industry before and in renewable energy industry after.

However, the real industrial secret are the values of the fundamental principles of governing our development together with corporate social responsibility, while technology innovation is the tool that we have always used to support all entrepreneurial actions undertaken.

Other principles are respected too: integrity, honesty, correctness and transparency, that enhance our reputation of a reliable, accountable and professional company for all our stakeholders.

All these factors contribute to «make companies live longer».
In addition to that, from the middle ’80’s, the decision was made to entrust the management of the Company to external managers, so that the family members involved in the Company can play the difficult role of “mindful” shareholders. If this is properly handled and with the right persons, it is a winning solution.

6. Could you say that this longevity is an advantage in the relationships with stakeholders ?
> FF. : It is certainly an advantage as longevity is not measured only in terms of economic viability, but also in terms of relationship with the territory and with the stakeholders.
Interacting with these players and optimising the impact produced by the company’s business on the « external » environment are the activities that enable the firm to gain acceptable conditions and to identify competitive edge too.

Are the traditional values that drive your Company an advantage for research and innovation ?
> FF. : Yes, they are, because tradition and industrial history are in the business DNA allowing to recognise which novelties may foster a long-lasting development and the related value added.

In your opinion, which are the « traps » your Company must avoid to maintain its independence ?
> FF. : Avoiding shareholders and executives who do not share the same values and principles.

Did your family’s willingness to maintain the Company independent over so many years involve difficult decisions ? If so, which ones ?
> FF. : The decision to abandon the steel industry, our historical business, which was handled by my brother Alberto smartly, firmly and farsightedly, caused a piercing grief to our family with consequent substantial weakening of the family’s assets and shareholding.

Is the control of the Company transmitted from one member to another of your family according to written regulations ?
> FF. : No regulations, only sharing values among shareholders. This element is of great importance to act in the company’s interests.

Is the family new generation already working in the company ?
> FF. : Yes, Enrico Falck, Alberto’s son, and Filippo Marchi, son of my cousin Gioia, are holding operational positions to become good shareholders.

Which is your message to those who would like to start a family business ?
> FF. : « Roots with wings ». Trusting family values so to fly high and seize opportunities in a running world.

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