Catini to the U.S.

CORPORATIONS Catini to the U.S At a private luncheon in Milan with a group of Italian industrialists, New York Stock Exchange President Keith Funston extolled the advantages of listing their stocks on the Big Board, where they would have free access to the world's biggest financial market. One of the intent listeners was blue-eyed, blueblood Count Carlo Faina, 62, president of Italy's giant Montecatini Co. Last week the exchange made an announcement: about Feb. 15, provided SEC agrees, the New York Stock Exchange will list 20 million shares of Catini, as it is known in Europe, the first Italian stock to be sold on the exchange. To facilitate trading, each U.S. certificate will represent five of the low-cost ($4.50 each) Italian shares. Said

Count Faina: "The listing means recognition of Montecatini's size and international stature."

The recognition was long overdue. Catini, little known in the U.S., is a whopper of a corporation by any standard. It is Italy's No. 2 corporation (after Fiat), and one of the world's top ten chemical firms. It has 60.000 employees. 167 plants and mines, 60 subsidiaries. 200,000 stockholders, assets of more than $600 million. From the Alps to Sicily, it straddles Italy's economy, producing 57% of the .country's aluminum (35,000 tons), 89% of its pyrites (1,200,000 tons), 80% of its bauxite, 64% of its phosphates, the majority of its chemicals. To produce chemicals by its own patented processes, Catini has built 155 plants costing $540 million in 23 nations (including the U.S. and U.S.S.R.) that turn out 7,000,000 tons of nitrogen annually, 13% of the world's total. Currently under contract: another 43 chemical plants for companies in twelve foreign lands, a deal with the Indian government to build hydroelectric works.

Catini's output is used from the cradle to the grave--from nipples on baby bottles to formaldehyde for undertakers. All this has paid the company well: between 1950 and 1955 sales soared 85% to $275,680,000; profits jumped 130% to $16.6 million, though 1955 earnings of 6% on sales were not as favorable as Allied Chemical's profit of 8%, Du Font's 22%. But Faina's goal is as American as apple pie, though it may seem as unlikely in cartel-minded, low-wage Italy as pie in the sky. Says President Faina: "I want every workingman to have 100 shares of Montecatini, a home of his own, a car. a refrigerator and television in his living room. It can be done, and we're going to do it."

Small Profit, Big Turnover. Founded in 1888 to exploit the old copper mines around the ancient spa of Montecatini, the company perked along modestly until 1910, when hard-driving Guido Donegani, a young mining engineer, moved into the presidency and set out to build a self-contained empire. He began mining the area's neglected iron pyrite deposits (for sulphuric acid), then built a plant to process the pyrite wastes, and extracted 600,000 tons of pig iron yearly--a boon for iron-poor Italy. He made blasting powder for his own mines and turned Catini into Italy's No. 1 explosives manufacturer. Long before industry as a whole appreciated the need for research, he surrounded himself with scientists, and Catini's white-coated Giacomo Fauser developed the world-famous nitrogen fixation process that made it a leader in producing nitrates and fertilizers. When bills for fertilizer bags got too high Donegani imported jute from India, made Catini Italy's biggest jute processor; when power shortages hampered production, he built his own dams and power stations. With tycoon-fitting foresight. Engineer Donegani made Catini the largest producer of power for private use in all of Europe.

He believed, American-style, in small profits and big turnovers. Said he: "I prefer to make one lira cutting costs rather than five by raising prices." But where Donegani's business acumen triumphed, his political instincts failed. A Fascist member of Parliament as early as 1921 and onetime president of the National Fascist Federation of Industries, Donegani was arrested by the Allies in 1945. He died two years later, a broken man.

Rebirth. With the end of World War II, Catini seemed shattered. Out of 40 fertilizer factories, 30 were damaged or destroyed, others looted by the Nazis. Machines, supplies, power, credit were short or nonexistent. The only surplus was labor; Catini was saddled with 47,000 workers who by law could not be laid off. Carlo Faina, who headed Catini's Rome office, started out to rebuild the company. A cheery aristocrat who differs from Donegani in every respect except drive, he is the scion of a line that once ruled a large slice of Italy (said a medieval couplet: "From Roma to Perugia, it's all Faina"). After World War I. in which he got three decorations and was seriously wounded, he was hired through an ad by Donegani as his assistant.

With Donegani jailed, Faina got the company back into production in the occupied south, rebuilt the ruined factories. He plowed nearly $250 million back into the business in ten years, bought 2,000 forklift trucks, mechanized production with thousands of new machines. He abandoned Donegani's one-man rule for a U.S.-style line-and-staff system, authorized plant managers to run the works on the spot, set up executive committees in Milan to supervise the major decisions and divisions. On the technical side he held a lighter rein, giving considerable scope to Engineer Perio Giustiniani. a fellow Tuscan who has served with Faina as co-president since 1949.

Big Stick, Big Carrot. While he licked production bugs, Faina faced a bigger menace: Communist-dominated labor. Only eight years ago, 83% of Catini's workers voted for the Red-led Confedera-zione Generale Italo del Lavoro. Faina attacked the problem with a big stick and a big carrot. First he fired 163 Red shop stewards, then he gave Catini's workers the biggest employee welfare program in Italy: pensions, free medical care (166 doctors, 18 hospitals), low-cost housing (7,000 units), vacations and scholarships for workers' children. Working mothers got free day nurseries for their youngsters; working fathers got canteen meals for 10 lire (less than 2/): soup, pasta, meat, vegetables, half a pint of wine. But the most significant move was free stock for Catini's workers (an average of 31 shares apiece so far) with opportunity to buy more on the installment plan. Today 30,000 workers--half the payroll--are buying stock, and to encourage them to hold on to it, Faina runs a $100.ooo-a-year lottery with prizes for worker-shareholders.

Last week Faina totted up the results: in the last plant election, the Red C.G.I.L. got only 37% of the vote. In the past three years not a single hour of output was lost from labor strife. Says Faina: "We are showing our people that capitalism works."

The Next Ten Years. To keep it working, Catini keeps searching and expanding. In partnership with Gulf Oil it has struck a promising oil field in southern Abruzzi, plans to get into production as soon as a fight for control with the government petroleum monopoly is settled. In another partnership, with Fiat, it established a new nuclear subsidiary last year, expects to begin building major atomic plants in the next few years. A dozen other new plants are building for new products. Among them: steel-strong, crystalline isotactics resins (made from natural gas and petroleum derivatives) that promise to surpass even polyethylene in importance. Catini is considering options on three sites in New Jersey, Virginia and Ohio for U.S. production. Last week, as the Italian public snapped up a Montecatini stock offering that will increase the company's capital from $134 million to $160 million, Faina predicted that Italy's gross national product--which has doubled in the past ten years --would redouble in the next ten. Adds President Faina: "And Montecatini will help."

This file is automatically generated by a robot program, so reader's discretion is required.