Meet the Owner: Leading a Business with Purpose
20th October 2021
Third generation family member, CEO of global family-owned cable manufacturer Tratos and member of the IFB, Maurizio Bragagni shares what it means to him to be leading his family business with purpose and where sustainability is second nature.
Who is Tratos?
“Tratos is a company built with an ethos to create jobs. The founder, Egidio Capaccini, returned to Italy having emigrated to Argentina in 1944 and built a career as engineer and cable manufacturer. Returning home to Tuscany in 1961, he found that his home town was still deeply impacted by the second world war, with poverty, no jobs and high levels of emigration. This is when he decided to build a company to create jobs in deprived areas. This remains Tratos’s mission to this day. It started out as a cooperative, but then development into a family-owned business that quickly expanded to bring employment to other areas of Italy, and later to other countries too.”
How has Tratos’s purpose shaped its commitment to sustainability?
“Sustainability has always a mantra of the company, whilst it wasn’t generally a formal approach to business and so I call it unconscious sustainability. However, it was in 2016, when I was undertaking a course at the City Business School (formerly Cass), that I came across and understood the narrative around sustainability. This gave us the opportunity to define and give more structure to something that was already there.”
“I’ll give you an example. Tratos is a consumer of power and back in 1975 one of Tratos’s factories in Tuscany, was close to a hydroelectric plant which went bankrupt. In order to ensure no one was going to lose their job due to this, Tratos bought the plant, modernised it and kept it open because we needed the electricity and the factory has been supplied by the plant ever since.”
“We were able to buy the plant because, we do not pay out dividends to the family, and so the company has always been able to invest in itself for innovation and development. This also includes funding to support project in vulnerable communities, locally and abroad, such as education projects in Kenya. Not paying out dividends to us meant that people were in it for other than just profit. This is how it’s been from the start.”
How would you describe culture at Tratos?
“Tratos has always had a strong culture, that of a good man wanting to support local communities. For us local culture has shaped the way our family has been involved in the business. For instance, we have a culture of equality, where men and women in ownership and management play equal roles. Family members were educated to think that all the members of the family were equal regardless of gender.”
“Innovation is also key to our culture. We have always thought outside the box, to find solutions to problems that turned out to often set us ahead of the competitions. Think of PVC, one of the most common insulating materials. PVC comes from petrol, it is a harmful chemical. Tratos has always worked to reduce PVC in their cables. And this is where innovation comes in. The cost of petrol-derived products in Italy was very high, so we had to find alternative products coming from different materials. In our case rubber. We came up with a different way to provide a better product for the environment, whilst being financially sustainable.
Today Tratos is leader in cable for ports infrastructure. We started a campaign in the 2000s to replace lead with a new compound that was able to keep the strength of cables but with less weight, whilst being lead free. Helping the environment always pays off.”
How has Tratos moved from natural to purposeful sustainability?
“We started looking and recording all that we were doing. We had a strong culture, an ethic code, and were implementing a series of practices that could be defined as sustainable. So we gave them a structure. We developed our governance, clarified mission, vision and objectives, and aligned our structures to other principles, including the UN SDGs. Our company is UK-based, so when structuring our Board, we aligned to the 7 principles of public appointment.
Today, sustainability for Tratos is formalised under 3 pillars:
Economic - This means we want to be profitable but prioritising being respectful; this includes health, safety and wellbeing inside the company. We gained certifications, ensure quality, but we also take responsibility to inform the public about risks associated with certain products. We lobby the Government when we knew about substandard products inside the market, to ensure we do all we can to promote public safety. Sustainable profit for us also means transparency and governance.
Social - We prioritise people and communities. We are a training company, and have a strong focus on quality of education and gender equality. We have a Tratos Academy, and demonstrate who we are and what we do, and why, internally and externally;
Environmental - We work in a way that protects the environment. This is where for us necessity, innovation and purpose have made us stronger. Using scraps and recycling has always been integral part of what we do in order to survive as a business, to have circular economy was necessary from the beginning. The cable industry was born in the second industrial revolution. To survive in that industry that now is global, the only way was to optimise production and reduce costs. And the only way to do that is innovate in the way you produce, and the other way to reduce waste and reuse. We also started to measure our carbon footprint, so to measure how much CO2, and then accordingly they started to act to mitigate this, planting the equivalent trees.”
Do you think your sector has made it easier for Tratos to remain sustainable?
“We are a white fly. In our industry it is easy to cheat and find shortcuts, cheap ways to do things. I myself was tempted many times, but because we had such strong structures in place where my every move was under scrutiny, and I was accountable, I always had to do the right thing.
In business you have three powers: product, man and energy. When all of your products are coming from the London metal exchange, you cannot trade on costs for materials. So all you can do is think about your man and energy powers in ways that are beneficial, and investing in them.
But a lot of others in our sector have done differently, and those businesses have either been sold or went bankrupt. This sector experiences lots of mergers and acquisitions. Interestingly, many of the companies that have followed the same path as us, are family businesses.
There is an element of pride and legacy in family businesses, which makes us want to build something good to live on. Times change and you will be held accountable by the standards of your time, not the standards of the past. This is how you decide if your legacy is going to live on, or you are going to be forgotten. Even if you don’t believe in sustainability now, it is the right thing. As we have plenty of evidence showing it. But even if this weren’t the case, look at the example of Cass Business School. At the time slavery was legitimate, but today we are holding this behaviour to account and reject the individuals and money made through that. History catches up with us.
Today we know it is not legitimate to abuse the environment. This is going to affect you and your legacy tomorrow.”
Photo: Tratos factory, Knowsley