Born in the Italian city of Vicenza on November 28, 1946, Paolo Scaroni graduated from Milan’s Bocconi University with a degree in economics, moving to New York to study at Columbia Business School, where he obtained an MBA, and of which highly respected institution he is now a board member. His first employment was at McKinney & Company, as an associate; he quickly moved to Saint Gobain, holding various positions in the French company before becoming president of the flat-glass division, based in Paris.
Down the years, his skill has been in nursing ailing corporations back onto their feet. That is exactly what he achieved with Britain’s Pilkington, a glass manufacturer that had pioneered safety-glass development with its patented float-glass process, invented by a company engineer in 1959, and subsequently cornered a massive 20 percent of the automotive glass market but which had become a complacent and stagnant organisation. As Scaroni told the Financial Times in 2000: “In spite of inventing the float-glass process, developing other good technologies and being a world player, Pilkington has underplayed the opposition for the past 20 years.”
Put simply, Pilkington had too many people, too many plants and excessively high overheads. It lived on its royalties from the float-glass process and not from selling glass. When those royalties dried up, the company was very close to going bust. Having enormous experience in the glass industry from his time with France’s Saint Gobain in a variety of positions between 1973 and 1984, Scaroni, who had been working meanwhile as vice-president of the industrial firm Technit, was parachuted into Pilkington in November 1996 – as president of automotive products worldwide and was quickly elevated to CEO of the whole group – with a clearly defined mission to reverse financial decline and save a company that has been in business since 1826.
Focusing initially on reducing costs, he closed various redundant plants across the world and streamlined the remaining workforce, which was double the number of people rival companies employed for the same levels of production. As he explained to the Financial Times at the time, he also set about making the company’s management more efficient: “We will be clarifying our management structure as well as reducing our overheads, which are killing us.”
“We should be able to have ordinary managers doing exceptional things. This can happen, provided you organise and motivate them properly.” Scaroni’s strategy worked. As Pilkington’s chairman, Sir Nigel Rudd, told the FT in 2002: “In the five years since Paolo has been here, we’ve completely changed the business.” Profits jumped by 23 percent from 1999 to 2000; old-fashioned management ways were modernised and the least efficient factories began to match the performance of the best ones. As one analyst expressed: “Pilkington was an old-fashioned and inefficient UK management company which would have gone into the ground. Paolo saved it.”
In 1985 he became deputy chairman and CEO of Techint and oversaw the privatisations of the Dalmine, Italimpianti and SIV subsidiaries before moving to the UK in 1996 and becoming Pilkington’s CEO. In May 2002 he was cherry-picked by the Italian government to be CEO of Enel, an energy company 68 percent owned by the Italian state and which was bleeding more than $1bn annually through its disastrous decision to diversify from its core energy business into telecommunications. Scaroni again applied his Pilkington formula, streamlining the workforce and improving efficiencies to prepare for full privatisation.
Job done, in June 2005 he moved on to take up a post as CEO of Eni, one of the biggest players in the global oil market. He accepts that hydrocarbons do not represent the long term future as, sooner or later, they will inevitably run out: “But,” he contends, “Demand for oil will continue to rise for at least the next 40 years.” Consumption will double from the present level because of increasing consumption in India and China. “That’s why, while we are investing heavily in research and development of alternative energy sources with, for example, $120m set aside for the research and development of solar technology over the next four years, we are constantly seeking new sources of oil,
specially both on and off-shore in sub-Saharan Africa.”
At a recent meeting, he told Ghana’s president, His Excellency Professor John Evans Atta-Mills: “Thanks to recent hydrocarbons discoveries in the deep off-shore, Ghana is destined to become one of the main producing countries in the region.” Eni also has a major project in progress to extract oil from tar sands in the Republic of the Congo and to then re-develop the land for palm oil production. “We believe our capabilities in terms of technology, operation and sustainable development will contribute to the economic and social development of the country,” Scaroni added.
Scaroni also met in August with His Excellency Yoweri Kaguta Museveri, President of the Republic of Uganda. “As one of the world’s top ten oil companies, we have been active in the sub-Saharan region since the 1960s and are major operators in the main oil producing countries there, such as Angola, Gabon, Nigeria and Mozambique, with daily production of 450,000 barrels,” says Scaroni, “Recent hydrocarbons’ discoveries near Albert Lake, in the east of the country, have demonstrated the great potential of Uganda, which is considered to be one of the most promising oil-producing countries in Central Southern Africa.”
While he firmly believes that oil will continue to be a prime energy source for quite a few years to come, Scaroni is a strong believer that the producing countries must take serious measures to create a far less volatile marketplace: “We’ve seen prices fluctuate from US$140 to US$40 in just a year. When prices drop like that, everyone at present cuts investment and reduces production, which then lifts prices back up. We must find some way to stabilise prices – even the Saudis do not like the present yo-yo effect,” Scaroni asserted during a recent BBC TV ‘Hard Talk’ appearance. “In my view, we need some form of global authority to set and stabilise prices.”
Decorated as an officer of France’s Legion d’Honneur in November 2007, Paolo Scaroni is currently a director of Assicurazioni Generali, LSEG plc (the London Stock Exchange Group), Paris-based Veolia Environnement and the Fondazione Teatro alla Scala. Between July 2005 and July 2006, he was chairman of the UK-based Alliance Unichem company.