History

Paper, electric power, finance – Burgo Group, a synergy born of experience

Luigi Burgo

When Luigi Burgo, the founder of the paper company that bears his name, first came to Verzuolo (Cuneo) in 1897, he was a young engineer with a good knowledge of the new world of electricity.

He moved to the Saluzzo area from his native Liguria, after meeting Tommaso Toesca, a reel winder at the Thury workshops in Genoa, who told him that the Municipality of Verzuolo needed a public lighting system.

And so the Alimonda Burgo & C. company that he founded in Genoa in 1899, created the first hydroelectric plant in Verzuolo to provide public lighting in the town.

The excess energy produced every day by the plant, together with the abundance of water in the area, gave Luigi Burgo the idea of building a plant to produce paper.

No sooner said than done; on May 21, 1905 he founded the Cartiere di Verzuolo ing. Burgo & C. company with a stock capital of Lire 300,000. The company grew year by year and had become a European giant by 1930, just 25 years after it was founded, with 5400 employees and eight plants (in Verzuolo, Corsico, Maslianico, Pöls, Fossano, Treviso, Romagnano Sesia and Lugo di Vicenza).

In 1921 Luigi Burgo was made a Cavaliere del Lavoro and then a Senator of the Kingdom of Italy.

In 1943 the tragic events of the war caused Luigi Burgo to be imprisoned in Verona, accused by Mussolini of plotting against the Fascist state.

After months of harsh incarceration which were to leave their mark for the rest of his life, Luigi Burgo was freed and on June 20, 1946 the Supreme Court confirmed his status as Senator, after he had been stripped of all his positions and his assets had been confiscated.

From 1947 to 1953 Luigi Burgo was represented in the companies by a trustee. He returned on July 22, 1953, as Honorary Life Chairman of the company, a position he held until his death on March 8, 1964.

“Un imprenditore europeo, una terra di confine: Luigi Burgo e la Valle Varaita” / Aldo A. Mola, Miche Berra. - Cuneo: Cassa di Risparmio di Cuneo, printed in 1993 - 198 p.: ill.; 31 cm.

Luigi Burgo, founder of Burgo company      

Origins

A company that made history in Italian industry

The Verzuolo (Cuneo) papermill was founded in 1905 based on Luigi Burgo's insight that excess energy from the power plant he had founded a few years earlier could be used to launch the new activity. Burgo soon achieved significant results: 5,000 kilos of packing paper produced in the first year, 315 employees by 1909, Grand Award Diploma in1911. In 1918 Burgo was already Italy's leading paper manufacturer and thanks to the company the country no longer needed to import newsprint.

Unaffected by the crisis in 1929, the company continued to expand, purchasing mills and developing projects in the energy and raw materials fields. It launched production of cellulose, setting up Cellulosa d'Italia-CELDIT with IRI, and it founded an experimental institute to study poplar cultivation, which marked the beginning of a focus on resources and the environment that is still a distinctive feature of its production today.

The Verzuolo paper mill 1925: Newsprint paper leaving the Verzuolo paper mill 1938: Debarked wood at the Verzuolo paper mill  

After World War II to the 1960s

Growth

After the war Burgo launched a vast campaign to update its mills and made investments in other paper and associated sector companies. Furthermore, it produced new papers to respond to the latest market requirements (like packing, food wrapping and packaging papers) and increased production of coated papers for the publishing field, where more widespread affluence created an increased demand for books, magazines and newspapers.

In 1960 Burgo became the first Italian company to enter the tissue sector by setting up a joint venture with America's Scott Group to form Burgo Scott Group, with plants in Villanovetta, very near Verzuolo, Maslianico, Maraino and Romagnano Sesia. An experience that lasted for over 20 years.

1947: the Lugo di Vicenza paper mill ­ the “Dutchman’s” room 1950: the paper machine 6 at Verzuolo The new Mantova plant in 1964, designed by Luigi Nervi  

The 1980s

The 1980s: reconversion and first partnership with Marchi

For Burgo the '80s were years of restructuring and reconversion of production. Widespread difficulties in the market forced the company to increase its share capital by bringing in a new shareholder, a move, however, that enabled it to resume growth. The first contact between the Burgo and Marchi companies dates back to this period and in fact in 1989 Marchi acquired 75% of the Toscolano paper mill together with Burgo (25%). This marked the beginning of a new and fruitful synergy.

Marchi made a name for itself for silk production in the early 1900s in Italy's Veneto region and then later expanded in the '20s and '30s. After World War II the Marchi family entered the paper market by acquiring shares in Tipolitografia Palladio, then in the '60s it launched the Valchiampo paper mill and in 1971, the Sarego mill.

Burgo increased its output thanks to an aggressive investment plan, with new production lines (PM3 at Duino), conversion of certain lines from uncoated to coated paper production (coating unit at Avezzano, PM7 at Verzuolo) and acquisition of new mills (Tolmezzo, Chieti, Marzabotto). The Co.Me.Cart. company was also formed in this period to develop technologies and plant for paper production.

The architect Oscar Niemeyer at the building site of the San Mauro Torinese headquarters The building of the PM3 at Duino External view of Tolmezzo mill PM2 at Avezzano

The 1990s

Innovation

In the '90s Burgo confirmed its vocation for innovation. It developed paper technologies (especially in the reel paper sector), it specialised in eco-sustainable solutions, it created new business opportunities by developing the electric power stations at its mills and boosting its efforts in the raw material production field.

A prime example of this was the Burgo Ardennes production site in Belgium, which managed to combine its paper and cellulose production perfectly while minimising consumption of water. This marked the beginning of a pronounced internationalisation.

The Burgo Ardennes plant Paper being coated A phase of pulp refinery at the Tolmezzo facility Mantova: the treatment tanks for water entering the plant

From 2000 until today

The years of integration

During this period the company has been particularly dynamic and seen significant changes, including at corporate level. In spring 2000 Dieci srl (some of the shareholders in this finance house had been long-standing investors in the company) launched a successful take-over bid for all Burgo's shares, then it incorporated Burgo in 2001 and promptly took on its name. As a result of this operation the company said farewell to the Italian Stock Exchange, where it had been listed since 1929.

The new resources were exploited immediately to make significant investments. One example, Verzuolo, where the new PM9 was launched in 2001 thanks to an investment of over 500 million euros. This is one of the world's most modern machines and has set the world coating speed record a number of times.

Energy generation increased significantly and in 2003 an Energy Business Unit was formed with responsibility for relevant costs and revenues, its mission being to exploit the overall company energy system. That same year, with the advent of a free market, Burgo Energia was set up to handle marketing of generated and purchased energy.

Changes continued at corporate level in order to develop all resources capable of boosting the company's growth. Relations between Burgo and Marchi were consolidated and after the acquisition in 2002 of the Villorba paper mill in joint venture with Marchi Group (from the late '90s Italy's number two paper manufacturer), which then bought out the holdings of certain Burgo spa shareholders. In 2004 cooperation between Burgo and Marchi became operative, representing the consolidation of a union that had already yielded significant synergies in the past and was later to lead to the founding of a new Group.

In January 2007, in fact, the new Burgo Group company was founded, the result of a merger by incorporation of Cartiere Marchi spa in Cartiere Burgo spa, a move that led to a maximum integration of their strengths, know-how and business. Now Burgo Group was poised to establish itself as a leader capable of continuous evolution.

The combined cycle power station with gas turbine at the Avezzano mill. The rolls of Verzuolo mill Condensed water recovery in the combined cycle The automated warehouse at Verzuolo