Titans of Industry: Fagor Industrial’s Iker Alberdi

Fagor Industrial was built on the cooperative principles of a large business group in northern Spain. Tina Nielsen meets CEO Iker Alberdi to hear how it grew into an international player in the equipment manufacturing market

When the Spanish priest Father José María Arizmendiarrieta established the Mondragon Corporation in a small town in Spain’s Basque Country in 1956, he laid the foundations for what was to become one of the country’s largest and most influential cooperatives.

Today it is the 10th biggest business group in Spain with interests in finance, industry, distribution and knowledge. It is made up of over 286 companies, among them Fagor Industrial, manufacturer of commercial kitchen equipment since the early 1960s. From its base in Oñati in northern Spain it has made its name with its range of cooking, laundry, warewashing and refrigeration equipment.

Arizmendiarrieta set about creating an entire business ecosystem to support the local community – at the heart of it, just a few miles from the group HQ is the University of Mondragon.

It was during his time at the local university that Iker Alberdi, CEO of Fagor Industrial, joined the manufacturer. “I studied engineering at the University of Mondragon and I went to Fagor Industrial to do my final year project,” he says.

That was 15 years ago. Alberdi started out in the stainless steel transformation unit where he completed his university project. He then worked his way through the different parts of the wider business. “I worked in production before I moved to take responsibility for the cooking business unit, which covered R&D and production,” he explains.

Later he headed to Poland to manage the Fagor factory and on his return to the Basque Country he managed two other brands Edenox and Asber (both are part of the umbrella Onnera Group which also includes Fagor and five other brands).

With one more stop on the way to the top, he became MD of Fagor and finally in 2017, 15 years after he first joined the business, Alberdi took the reins as CEO.

It is no exaggeration to say he knows the business inside out and this, he says, is key. “I know the details of the business; it is easy for me to speak about how to use different products, how to develop or even purchasing, which I have been in charge of too. I think it helps us to be fast in our decision-making because I know the detail and the implications of different actions,” he explains.

Today Fagor Industrial has grown to a total of 2,200 people, 500 of them based in the Oñati facility, which houses the head office and the factory; Alberdi says with some pride that he knows them all. “We are a cooperative and relations between people are very good and very close. My door is always open – people knew me when I was 20-something years old, I have worked closely with a lot of people here,” he says.

His long relationship with Fagor Industrial means his role is as much operational as it is strategic. “Even being as big as we are, having this knowledge helps us to get into a lot of detail. I am close to the customers, I find out what they need and then we try to transmit this to the development team,” he says.

“I think as an engineer and as the CEO of the group this is important because we need to create products to provide solutions on a daily basis.”

Serving the innovators

Fagor Industrial started life inside the home appliance manufacturer Fagor Electrodomesticos in 1960; it wasn’t until the end of the decade that it became an independent unit. Among the first products was a fryer; later followed the electric boiling pan. Over time the company has expanded to warewashing and laundry, cooking and refrigeration.

So, more than 50 years on how would Alberdi describe Fagor today? “As a company I believe we are a project based on our people. We try to be familiar to people outside the company to create this project together,” he says.

The company is the market leader in Spain, its primary market – the nearest competitor is far behind, according to Alberdi – and it works with all levels of foodservice outfits. “Our most important channels are hotels and catering companies – hospitals, prisons, education and corporate canteens,” he says.

They also work on projects with Spain’s best-known chefs, among them Eneko Atxa, Elena Arzak and Andoni Aduriz. These may seem like prestige projects but to Alberdi they are crucial to help the company stay ahead of developments in the sector. “We try to be close to the people who are innovating – if we are able to fulfil their needs we believe it will help us develop for the future,” he explains.

With a presence in 20 countries and factories in Poland, Mexico, France and Spain, it is an international manufacturer and though the Basque and Spanish identities are important, it is a global player.

The second biggest market is France and after that the Americas. With a big factory in Mexico and warehouses in Miami, Atlanta, Chicago and Dallas, the company’s presence remains relatively limited but it is a huge market and there is potential for Fagor Industrial, currently turning over around $40m there, to go further.

“The American market is one where we are still small even if we do have a good turnover. The potential to grow is huge with all the products we have and we are not present in the fast food chains at all,” says Alberdi, but quickly adds that the right strategy needs to be in place before this could happen. “We need to figure out the correct channels and customer group and so on,” he says.

The Fagor product offering has always been broad and growth is pursued through product diversification in an effort to meet customer needs. Alberdi traces this strategy to the origin of Fagor. “We have never just been a specialist in modular cooking, but we want to give our customers a full solution. That is the idea with the brand,” he says. “If you are just doing one thing, yes, you might be more specialist, but this is about being close to the customer. Would we be better in cooking if we did not manufacture dishwashers? I don’t think so.”

Product development is always with an eye on the long term – Alberdi says
his team think 10 or 20 years ahead. “We are not listed on the stock exchange,
so nobody is checking us every three months to see if we are profitable,” he says.

While acknowledging that this is a sector of evolution rather than revolution, he insists that there are constantly new opportunities for development. “You can always make improvements to the product, based on the efficiency in the machines. You can improve the usability or cleaning functions. There are always improvements to be made,” he says.

He points to the internet of things (IoT) as a current area of development. “That is revolutionary for us,” he says and adds that the wider industry could benefit from some protocols. “There is a real challenge with the use of IoT in our sector and we need to help our customers use it to improve their business.”

New technology offers tremendous opportunities to make life easier for chefs. Alberdi dismisses any notion that this is because machines have to be simplified to work for a less qualified kitchen workforce. “As far as I can see, if we need to do a function then we want to make it as easy as possible for the end user. It doesn’t matter if this is Michelin-starred Eneko Atxa or a lower level chef in a big hotel. You need to do the function in the easiest way,” he says. “If you are good and the machine is easy to operate then you can be twice as good.”

Community and legacy

The cooperative principles on which Mondragon Group – and in turn Fagor Industrial – are built are cooperation, participation, innovation and social responsibility. Those are the four values from which all business decisions are made – the first two are reflected in the fact that all workers participate in the decision-making. Innovation is a must and social responsibility implies a commitment to social development and the local environment.

This final principle is the one Alberdi turns to when considering the challenges for the wider equipment-manufacturing sector. “We need to improve the efficiency of our machines and get better at water and energy consumption,” he says. “But we are a polluting industry, we need to create environmentally friendly factories.”

He believes the Mondragon values translate well to Fagor Industrial. “Something else that is important for us is legacy. We say the cooperative movement was started to improve society in the area and what is important now is to leave it to the next generation, that is at the core of who we are,” he says.

It is a good time for the wider industry, says Alberdi, and he is bold about future growth. “I believe we will grow through product development. We have markets where we are strong and markets where we have potential to improve,” he says. “It depends on the value we give customers. If that is OK everything will be OK.”

Like Alberdi himself, new workers continue to join from Mondragon University. Again, he points back to the genesis of the cooperative. “The origin of the group is to help the area and the local community. It is not just about giving a job, you need to improve people’s lives,” he says. “That’s why we start with education – it is the basis of everything.

Tina Nielsen

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