My guest for this interview is Alberto Cracco, the CEO and Managing Director of Westrafo Transformer Manufacturers, in Italy and America. Welcome Alberto.<\/span><\/p>\n\n\n\n Alberto Cracco<\/strong><\/p>\n\n\n\n Thank you, Alan, it is my pleasure.<\/span><\/p>\n\n\n\n AR<\/strong><\/p>\n\n\n\n Alberto, I believe every company has a culture, and the culture is set over time, not in an instant. I read somewhere where you said, \u201cculture trumps strategy\u201d. When I look at the values at Westrafo they speak to me about building something for the long haul. But today we are in an environment where things like sustainability, innovation, and reliability are all important to what we do. Talk a little bit about the values that have been instilled in Westrafo and how you maintain them?<\/p>\n\n\n\n AC<\/strong><\/p>\n\n\n\n The actual values that the marketplace is asking for are reflecting what we have had with Westrafo from the beginning. Our mission is identifying reliability, innovation, and sustainability applied in the energy world to the transformer market specifically.<\/p>\n\n\n\n These are the values that you hear a lot of companies talk about, but this has been the root of our tree that we have built over decades, not something we are just trying to build. We started looking at the renewables market 10 years ago, with the goal to create a company that was able to support long term business growth with customers who are working in the renewable energy market.<\/p>\n\n\n\n Based on that is how we designed the company, and this is probably one of the reasons why we have been growing in such a consistent way, year by year.<\/p>\n\n\n\n AR<\/strong><\/p>\n\n\n\n How did you get into designing and manufacturing transformers for the green energy market? Did you show up one day and say, \u201cI want to build transformers for this specific market\u201d?<\/p>\n\n\n\n AC<\/strong><\/p>\n\n\n\n (Laughing) No, it was not like that at all. Although Westrafo was founded in 2014, the company’s historical background starts with my father who began manufacturing transformers and working in the transformer market in 1967.. That\u2019s over 57 years of experience.<\/p>\n\n\n\n My father worked as a technician at the beginning, working Saturday and Sunday when he was young making distribution transformers around Italy in order to be able to support the family.<\/p>\n\n\n\n Thanks to his technical and engineering background, he became Technical Director, then Sales Director, and finally became General Manager of a transformer company he led for almost 25 years before he retired. That was the day when we decided to start our entrepreneur activities as a transformer manufacturer. For eight years we had a minority share in a local company here in Italy and in 2014, we decided to step out and to create Westrafo: to start from scratch, to start from the ground up with a new company, was probably the best idea we ever had in our lives.<\/p>\n\n\n\n Beginning with almost 50 years of experience, with a blank sheet of paper where we can create whatever we want, allowed us to build exactly what we decide without constraints. This freedom to choose our path and focus on high-value markets is likely a key reason behind our success.<\/p>\n\n\n\n <\/p>\n\n\n\n AR<\/strong><\/p>\n\n\n\n That is excellent, a very inspiring story. You do not bring any of the mistakes that you make along the way to the new company. Is your father still involved in any way with the company?<\/p>\n\n\n\n AC<\/strong><\/p>\n\n\n\n My father is still the chairman of the company here in Italy. He is still an internal advisor for everything related to technical purchasing and strategic solutions. As a board member, he remains very active and continues to be one of the driving forces behind our company. I am very proud that we are be able to combine my optimistic approach and thinking completely out of the box with his experience, knowledge and his capacity to understand the transformer market.<\/p>\n\n\n\n AR<\/strong><\/p>\n\n\n\n That is excellent, with a mix of the old guard and the new. While I know you are a global company, let’s talk about your US efforts. The US market is hot. Right now, green energy in the United States provides on average about 38% of the power that we need, which is generational power. And if we could get a good energy storage system in place it is going to provide up to 60% with the existing infrastructure.<\/p>\n\n\n\n One of the big changes that we need is that we need a lot more transformers, a lot quicker. Is that part of your decision to get closer to the US market? Build them here and impact the supply to meet the current and growing demand?<\/p>\n\n\n\n AC<\/strong><\/p>\n\n\n\n Yes, that is why we decided to invest in United States by opening our production facility in Ohio.<\/p>\n\n\n\n As you know, we decided to enter the United States around 18 months ago.<\/p>\n\n\n\n We are starting from a base of solid information that we received from the market, from the growth. The Inflation Reduction Act expanded the renewable energy market, and many of our existing customers, whom we supply from Europe, requested a local supplier.<\/p>\n\n\n\n A couple of years ago, we explored the opportunity to establish a US facility. We realized it wouldn\u2019t be easy since the supply chain for transformer components is still limited here \u2014 only a few components are available domestically. Nevertheless, we chose to invest, attract suppliers, and to do agreement with local suppliers that can grow with us.<\/p>\n\n\n\n The rationale behind the decision is not only to be close to the market but to be an alternative solution for the market in the United States. We are working in the renewable energy market, and the Data Center market, both of which we expect to grow significantly over the next decade.<\/p>\n\n\n\n Our target behind our decision was to invest in a local facility here in the US, to support our existing customer base and to attract new US customers, manufacturing products by US workers and serving the US. as a local supplier. I think this is a big challenge for Westrafo but we are confident that we will successful in the project.<\/p>\n\n\n\n Everything at the moment is on schedule, so we are very satisfied for the project. Production is expected to start during this summer and we are on track for that. We are already receiving orders that are filling our production capacity.<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n AR<\/strong><\/p>\n\n\n\n And you are doing it in the Dayton, Ohio area, which has a great labor market?<\/p>\n\n\n\n AC<\/strong><\/p>\n\n\n\n Yes, the selection of the site was not easy: every US state wants to attract investment. When you say \u201cinvesting in the US,\u201d it really means choosing a specific state like Ohio, California, or Texas, all competing to host us. Our idea was to be close to the customer, in southern states and Texas or California, or to be close to the supply chain.<\/p>\n\n\n\n We decided to be close to the supply chain, a lot of which is coming from Canada now, or Ohio, Illinois, or Wisconsin in the US. This part of the Midwest is very attractive from a supply chain point of view.<\/p>\n\n\n\n After much review, we chose Trotwood, Ohio which is close to Dayton. That is a town that had been destroyed by a tornado in 2019, and a lot of people lost jobs because of it. We feel as an entrepreneur that when we make an investment, we need to help people and the community. There was a lot of enthusiasm to support us in our initiative, and we feel that we are more part of the city every day we are there.<\/p>\n\n\n\n AR<\/strong><\/p>\n\n\n\n The transportation infrastructure in that area is good as well.<\/p>\n\n\n\n AC<\/strong><\/p>\n\n\n\n Yes, I70 and I75 right near us and that is one of the reasons. Also, in Italy, we are 6 hours difference from the east coast time zone, so when we start work in Ohio, it is halfway through the day here in Italy. We have almost half a day where we can work together. Also, flight connections and a good labor market made it attractive to us.<\/p>\n\n\n\n AR<\/strong><\/p>\n\n\n\n I know you have a special relationship with Cargill FR3. I have talked to Javiera McGuiggan, who is one of our Executive Editorial Board members. She speaks very, very highly of you and Westrafo, so talk a little bit about that relationship with Cargill.<\/p>\n\n\n\n AC<\/strong><\/p>\n\n\n\n Our relationship with Cargill began in 2015, early in Westrafo\u2019s journey. We aimed to offer the market a better solution than what was available. Cargill was looking for a company that can support them as they developed their technology, to sell FR3 a better way.<\/p>\n\n\n\n The Cargill engineering team supported us in an incredible way during this journey. One year later, we shipped the first sustainable peak load (SPL) transformer that can operate at a higher temperature compared with current transformers in the market. This was sold to an Italian utility, was tested at CESI, together with another external laboratory, and based on that, we did a lot of other prototypes that we sold to German utilities and others. All the results were beyond our expectations.<\/p>\n\n\n\n We have certified our design criteria specifically for transformers using FR3 fluid. These are high-temperature designs incorporating materials such as thermally upgraded paper and high-temperature gaskets. Through this process, we were able to consolidate our design approach. <\/p>\n\n\n\n Installation costs are lower, and the performance of these transformers matches\u2014or even exceeds\u2014that of traditional mineral oil transformers, as this has been a key focus in our design criteria. Additionally, the use of FR3 fluid enhances fire safety. As you know, it\u2019s also environmentally friendly, making it a well-rounded, winning solution from every angle, especially from my perspective as a transformer manufacturer. On top of that, Cargill, an American company, operates production facilities worldwide, ensuring global availability and support.<\/p>\n\n\n\n AR<\/strong><\/p>\n\n\n\n One of the things that you mentioned is their willingness to be able to invest in their customers, and by that, I mean time, talent and energy. What do you see for the next decade?<\/p>\n\n\n\n AC<\/strong><\/p>\n\n\n\n If we look at our market, we have a couple of factors that are making us positive about the future. First, there are Greenfield projects, new projects that are being approved and moving ahead, both in the renewable energy sector and data center sectors.<\/p>\n\n\n\n The volume of new projects that have already been approved, that must be built in the next 2, 3 years is incredible, higher than what we normally think about. We are speaking about gigawatt after gigawatt, one terawatt of projects that are going to be developed in the next 5 years.<\/p>\n\n\n\n There is one reason why we are investing in Italy and the US, because the US will be one of the of the States where there will be more projects for this type of application and Italy is in a good logistic position for all the projects in Europe. <\/p>\n\n\n\n All European countries are investing a lot on the renewable energy technology. The sum of both Greenfield and Brownfield projects is probably going to develop with a compound aggregate rate, that is, between 12 to 14% in the next 10 years. This is our expectation.<\/p>\n\n\n\n <\/p>\n\n\n\n AR<\/strong><\/p>\n\n\n\n Load growth in the United States was flat for the last 20 years, and about 4 years ago it started to peak. It’s about 8 to 9% depending on who you ask. That is a huge problem because we have an aging infrastructure that must support this new load growth.<\/p>\n\n\n\n AC<\/strong><\/p>\n\n\n\n Yes, and when you compare the United States with a country like Sweden; where they are replacing transformers around every 20 years, even if the transformers are perfect, you see that they are continuously investing in better technology and better efficiency. I don’t think that the United States has the capacity to do what Sweden is doing, but certainly we need to upgrade.<\/p>\n\n\n\n AR<\/strong><\/p>\n\n\n\n You mentioned data centers. Data centers are hot right now. The biggest areas are Northern Virginia, north of Atlanta, GA, and another one of the top five is right up there near you in Columbus, OH. Columbus is a big data center market. Talk a little bit about FR3 for data centers because they must not have a fire, and the cooling needs are especially higher for AI data centers. Talk a little about that market because that is a unique, fast-growing market.<\/p>\n\n\n\n AC<\/strong><\/p>\n\n\n\n Yes, that is the fastest growing market currently. In 2024 the market was less than 10 gigawatts worldwide, but what we see is that this type of market is going to be something around 19 gigawatts this year, close to double compared with the last year. We are expecting 7 gigawatts in Europe. This market is growing in a more consistent way compared with battery storage and the solar market. In the next 4 years it will probably become the number one market for FR3 transformers.<\/p>\n\n\n\n By leveraging the thermal capabilities of FR3 fluid, we can design a transformer with the compact footprint of a smaller unit, yet offering highly flexible load capacity.<\/p>\n\n\n\n AR<\/strong><\/p>\n\n\n\n What the market needs is a transformer that is more reliable, more sustainable, and more resilient. These are some of your core values at Westrafo, correct?<\/p>\n\n\n\n AC<\/strong><\/p>\n\n\n\n Yes, when you speak about sustainability, to me it does not make sense to install a mineral filled transformer where you need renewable energy. That’s why we are focusing on the FR3 Transformer. Our vision is to be part of the energy transition by encouraging customers to adopt better technologies for a more sustainable world. This commitment is at the core of our mission.<\/p>\n\n\n\n AR<\/strong><\/p>\n\n\n\n Thank you so much Alberto. I really appreciate you taking the time with me. Have a great day.<\/p>\n\n\n\n AC<\/strong><\/p>\n\n\n\n You too, Alan.\u00a0<\/p>\n","protected":false},"featured_media":12360,"parent":0,"template":"","meta":{"_acf_changed":false},"article-category":[5],"class_list":["post-13350","article-hub","type-article-hub","status-publish","has-post-thumbnail","hentry","article-category-interviews"],"acf":[],"_links":{"self":[{"href":"https:\/\/transformer-technology.com\/wp-json\/wp\/v2\/article-hub\/13350","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/transformer-technology.com\/wp-json\/wp\/v2\/article-hub"}],"about":[{"href":"https:\/\/transformer-technology.com\/wp-json\/wp\/v2\/types\/article-hub"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/transformer-technology.com\/wp-json\/wp\/v2\/media\/12360"}],"wp:attachment":[{"href":"https:\/\/transformer-technology.com\/wp-json\/wp\/v2\/media?parent=13350"}],"wp:term":[{"taxonomy":"article-category","embeddable":true,"href":"https:\/\/transformer-technology.com\/wp-json\/wp\/v2\/article-category?post=13350"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/figure>\n\n\n\n
<\/figure>\n\n\n\n