Italian floods cause damage to IT vendors

The area around Ivrea, traditionally a center of IT manufacturing, was one of the hardest hit, with the Dora Baltea River that flows through the town breaking its banks in many places. More than 20 people were killed by the floods across northern Italy and the industry ministry estimates that damage will amount to more than 10 trillion lire ($US4.3 billion).

"For the moment it is very difficult to calculate the damage," said Federico Barilli, director of the Assinform industry association in Milan. "There has certainly been damage to the producers, to which one has to add the damage to IT users in the area," Barilli said in a telephone interview.

Among the worst affected was the Olivetti Group, whose Olivetti-Lexikon plants manufacture printers and photocopiers in the area. "The Olivetti-Lexikon plants at Ivrea, Aglie, Leini and Scarmagno are all producing as normal," an Olivetti source said. "At Arnad we are carrying out the necessary inspections and hope to resume production soon." The Arnad plant produces ink-jet technology for printers, he said. It is still too early to put a figure on the material damage and lost production, the source said. It was also premature to speculate on the potential market for replacing flood-damaged IT equipment used by companies in the affected area, he added.

Three companies operating from a former Olivetti plant in Ivrea -- the mobile phone company Omnitel Pronto Italia, the software solutions company Getronics and Diebold, the world's second largest manufacturer of automated teller machines (ATMs) -- all suffered flood damage, according to Laura Spezia, an official of the Fiom trade union responsible for the IT sector.

"Omnitel had flooding in the basement, while at Getronics they had water up to the first floor," Spezia said. "But they have all been back in action since yesterday." Office buildings in Ivrea used by Omnitel and the fixed line telecom operator Infostrada also suffered power cuts and other disruption for two days, she said.

Initial damage assessments for the area of Ivrea published October 20 found 30 companies reporting significant damage and another 500 unable to give an accurate picture of the damage situation.

"In general, hardware manufacturers did not suffer flood damage, only disruption to supplies and the availability of the labour force," Spezia said. "The flooding was terrible and has affected a lot of companies. There is no doubt it will have serious repercussions for the economy of the Piedmont region as a whole."

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