Three cooperatives with rich histories, SACMI, Cefla and Mondragon, demonstrate how innovation, adaptability and adhering to the cooperative principles can allow enterprises to stay competitive in an ever-changing world. In 2023 alone, these three industrial enterprises generated around EUR 14 billion of production value.
On 27 June, we visited two of Italy's largest industrial cooperatives SACMI and Cefla, based in Imola, Italy. The visit was organised following the agreement Mondragon Group signed with Legacoop on 26 June in Bologna to promote the cooperative model in Europe through the development of joint projects and business relations between the two business systems. Aligned with Cooperative Principle 6 – Cooperation amongst cooperatives, the agreement aims to develop commercial relationships between these enterprises, enhance knowledge-sharing, and transfer skills, research and technology. Furthermore, the agreement also aims for joint advocacy towards the EU institution, and the further development of projects at the European level, particularly related to the twin transitions, education and training, and finance.
Pioneers in Industry
These cooperatives are not just surviving but thriving: these enterprises are industry leaders that have carved out their own niches consistently building on their decades of experience.
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Did you know? Have you ever thought that the caps on your beers or that a part of your car or the chair you sit in at the dentist could be the product of a cooperative?
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SACMI is an international leader in industrial plant engineering, focusing on the supply of advanced technologies for various sectors, including ceramics, plastics, food & beverage, metals, packaging and advanced materials. Founded in 1919 in Italy, the SACMI Group has since then expanded to over 70 production, distribution and service companies across 27 countries, with its brand and logo recognised and protected in over 100 countries. Despite challenges in 2022, such as the war in Ukraine and the rising cost of living, SACMI showed resilience and adaptability as it achieved over EUR 2 billion in sales and maintained its employment levels.
Cefla is a versatile company with three business units in the fields of engineering, finishing and medical equipment. Established in Imola, Italy in 1932, Cefla has grown to 22 global sites. Its mission is to create value over time through product innovation and process evolution. While each of the three business units are uniq
ue in their products and processes, their mission remains to innovate with the aim to find solutions that benefit all and to enhance the efficiency of their production. Despite the negative socio-economic reality in 2023, Cefla closed the year with EUR 66 million in earnings.
Mondragon is one of the largest corporations in Spain, and it operates across the globe with production plants and sales offices in over 150 countries. Divided into four areas – Finance, Industry, Retail and Knowledge – it currently consists of 81 separate, self-governing cooperatives. The sectors of activity of Mondragon are varied and include transport manufacturing, home solutions, construction, packaging, health and business services.
A Legacy of Cooperation
The three cooperatives have a long and deep-rooted history in their respective regions, carrying forward a wealth of experience and tradition. Their modest origins shaped their values, and their adherence to the cooperative principles has been vital for their expansion and endurance. These enterprises, despite their immense growth and global reach, remain committed to the local communities.
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SACMI was founded in the aftermath of the First World War by nine people, including mechanics and blacksmiths, and a share capital of 4,500 Italian lire (today just over 2 euros), in the city of Imola, Italy. Their aim was to improve living conditions through work; the workers decided to tax themselves to provide early forms of social security schemes not provided by the State at the time. Early production focused on mechanical repair of machines, such as locomotives, threshing machines, agricultural and wine-making machines. Difficult economic situation and a dictatorship posed serious threats to the company. However, business was gradually expanded and by the 1930s, SACMI assembled the first machines under its own trademark. Following the end of the war and the liberation of the city of Imola in 1945, SACMI’s fortune took a turn for the better. The Cooperative Ceramiche d’Imola, celebrating this year its 150th anniversary, wanted to resume its work, but its machinery was damaged during the war. SACMI mechanics saw an opportunity to relaunch their activities and adapting their machines to produce ceramics, they started their first line of production. From there, investments in the machines allowed SACMI to expand to other sectors. By the end of the 1970s, SACMI exported to 80 countries around the world. Since the mid-2000s, SACMI also focuses on developing production processes that are more sustainable and less energy intensive.
Also in Imola, Italy, nine founders, including metal roofing technicians, plumbers and electricians, established a cooperative specialised in electrical and heating and hot water systems: with a minimum membership fee of 100 lire, the Cooperativa Elettricisti, Fontaniery, Lattonieri e Affini, or Cefla, was founded in 1932. Since then, the number of workers grew to around 2,000 and their market expanded from the local to the global. Today, with hundreds of registered patents, Cefla is present in multiple business sectors, and continues to develop solutions beneficial for all and more efficient and productive working methods.
The Mondragon Group’s history began in 1943, when Jose Maria Arizmendiarrieta, a 28-year old parish priest, founded the Mondragon Escuela Politecnica (or Eskola Politeknikoa in Basque), a vocational school for youths aged between 14 and 17. Arizmendiarrieta taught social issues to his pupils, including the reform of the property regime of enterprises. In 1955, five of the ex-pupils of the Eskola Politeknikoa, after graduating in industrial expertise, founded an industrial cooperative with another 19 workers producing kitchen stoves. Ulgor, which is known as Fagor today, inspired the establishment of further industrial cooperatives over the following years.
In 1959, a credit cooperative was established (Caja Laboral), which by capitalising the worker-members reserves and 10% of the cooperatives revenues supports the development of the different cooperatives. The Caja Laboral, at the beginning, also provided workers with social security schemes. In 1967, this service was transformed into a cooperative of cooperatives, known as Lagun-Aro. In 1997, the University of Mondragon was created. Today, Mondragon has 81 cooperatives across the four fields it operates in – finance, industry, retail, knowledge – and it is the seventh biggest corporation in Spain.
People centered enterpirses
As cooperatives, all three organisations have a democratic, participatory governance model that involves worker-members in strategic decisions of the company. However, the unique history and context in which the company developed, made them apply different model of governance.
Historically, in SACMI membership is guaranteed to a defined group of workers who are selected on the basis of specific requirements, among which are professionalism, age, civic conduct, and the sharing of the cooperative ideal. An organisational peculiarity of SACMI is the strong focus on the workers' non-alienation from the product and ensuring that everyone experiences entrepreneurship thanks to of their own personal resourcefulness.[1] Today, the SACMI Group employs more than 5,200 people in a total of 73 manufacturing, distribution and service companies in 27 countries worldwide. Efficient management and organisational innovation are SACMI Group hallmarks. As such, over the years, SACMI adapted its governance and corporate organisation models to meet new challenges posed by global markets. In April 2022, the SACMI Imola Board of Directors updated the Corporate Governance model approved in 2017. In particular, the new governance model establishes the Sustainability Board, whose goals are to encourage dialogue on developmental trends and sustainability issues and to define strategic lines by identifying areas that should be the focus of growth and sustainability development policies.
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Cefla currently has 281 worker-members. They apply a quasi-open policy where to become a member a worker must show professionalism but also alignment with the values of the cooperative. To avoid conflict of interest in the decision making, the managers of the company are excluded from membership. The company also applies a non-written rule of 1:3 ration among the number of members and workers. Currently the ratio is lower as recent merger operations have rapidly increased the total number of workers employed in the cooperative.
There are 3 level of governing authority in the Mondragon cooperatives: the General Assembly, the Governing Council and the Board of Directors. The General Manager, appointed by the Governing Council, have a voice but no vote in Board meetings.[2] According to the wage ratios agreed in the cooperative, managers may earn a maximum of six times as much as the minimum wage in the cooperative. One of the distinctive characteristics of the Mondragon Group is the Social Council[3]. Its purpose is to facilitate communication within cooperatives. Thus, its basic functions are information, advice and consultation. The Council members meet monthly to discuss issues raised in the cooperatives. The structure and cooperative dynamics are all set in the 2019 Basque cooperative law and by the Mondragon corporation cooperative practices.
Commitment to innovation and sustainability
As cooperatives, these enterprises operate with a long-term perspective, for which the two pillars of innovation and sustainability are indispensable.
The role of innovation is essential for an enterprise to adapt to new realities and maintain its competitive advantage. Innovation is not a novel idea for any of these three cooperatives that have existed for long decades and have lived through immense changes, from world wars to pandemics. As such, they all have dedicated resources to innovation.
For example, SACMI continuously invests in R&D activities. It opened its own Research Centre in Imola in 1989, with physical, chemical and technological laboratories, experimental departments and a specific pilot plant for ceramics. In addition to having its own research facilities, SACMI is a partner and sponsor of various higher education institutions, laboratories and research centres in Italy and abroad and has over 100 partnerships with universities to develop strategic business projects. One of the key recent innovations was the establishment, in 2023, of the Corporate Innovation Directorate, which directs and coordinates innovation at strategic level. Alongside, the Digital Innovation & Automation Hub, established as early as 2022 and grew during the year to become a true 'Digital Business Partner,' helping individual SACMI Businesses achieve their innovation goals in terms of developing digital & automation enabling technologies. Furthermore, SACMI has opened in 2023 its own Academy, where new employees follow a tailor-made induction and training company.
Similarly, Cefla has a strong commitment to innovation. Its three business units – engineering, finishing, and medical equipment – all engage in innovation proactively findings solutions to the needs of their respective sectors. In 2022, Cefla invested EUR 12 million in R&D, which is a 27% increase compared to 2021.
Mondragon’s oldest institution, the Eskola Politeknikoa, was established 13 years before its first industrial cooperative. Since then, Mondragon has been committed to continuous innovation, demonstrated by its 12 R&D Centres and the Mondragon University. Ikerlan, founded in 1974, was the first one. These centres focus on technological development in various areas, such as manufacturing and industrial production technologies, digitalisation, food technology, and more. Mondragon also has its own university as well as a Management and Corporate Development Centre. Besides training, these institutions also provide research activities.
Sustainability is another key factor for these cooperatives, and it is also vital for achieving climate neutrality by 2050. While there are fears that Europe may lose its competitive advantage due to increased emphasis on sustainable development, these three cooperatives prove that it is possible to remain competitive on the local, European and global levels while reducing their environmental impact.
SACMI operates in the ethos of sustainability as a strategic factor of competitiveness within the new governance model. This strategy includes both offering innovative technologies to accompany its customers in the green transition and continuously improving the environmental profile of its own production sites. In terms of the environment, the machines and plants designed by SACMI consume less energy, recycle raw materials, use clean energy and reduce emissions. In terms of environmental commitment, SACMI prioritises Sustainable Development Goals (SDG), particularly SDG 6 (clean water and sanitation), SDG 7 (Affordable and clean energy), and SDG 12 (Responsible consumption and production). Furthermore, SACMI also emphasises its commitment to the people (SDG 4 – Quality education, SDG 8 – Decent work and economic growth, SDG 3 – Good health and well-being, SDG 9 – Industry, innovation and infrastructure, and SDG 11 – Sustainable cities and communities).
Similarly, Cefla prioritises decent work and economic growth (SDG 8), industry, innovation and infrastructure (SDG 9), and sustainable cities and communities (SDG 11). Regarding the environment, Cefla pays particular attention to consuming less energy and lowering its environmental impact (SDG 7 - Affordable and clean energy, SDG 12 - Responsible consumption and production, SDG 13 - Climate Action, and SDG 17 - Partnerships for the goals).
Sustainability is also an important facet of the Mondragon Corporation, which it believes is essential in responding to the needs of society and the planet. For Mondragon, cooperatives work is a way to transform society (SDG 8, Decent work and economic growth and SDG 3 Good health and well-being) and education and innovation are key levers to that end (SDG 9 Industry, innovation and infrastructure and SDG 4 Quality education). In terms of environmental sustainability, Mondragon prioritises SDG 7 (Affordable and clean energy), SDG 12 (Responsible consumption and production), SDG 13 (Climate Action).
[1] https://centridiricerca.unicatt.it/cespem-SACMI_091108.pdf
[2] https://exploremondragon.com/en/
[3] https://exploremondragon.com/en/video/el-consejo-social/#
| This COOPTALE has been funded by the European Union. Views and opinions expressed are however those of the author only and do not necessarily reflect those of the European Union or the European Commission. Neither the European Union nor the granting authority can be held responsible for them. |  |
