According to most, 2003 was supposed to be a year of recovery for a materials handling industry reeling from recession. In fact, most of the companies included in Modern's seventh annual listing of the 20 largest materials handling system suppliers did show steady improvement. But at the same time, others continued to struggle, reflecting a somewhat uneven marketplace.

Of the 18 companies returning to the list this year, 11 saw increased sales during 2003. Six had lower sales than the previous year while one company had level revenue. Those with gains averaged increases of 14.4%, while those that declined saw revenue fall an average of 17.5% from 2002.

In order, the top five system suppliers based on 2003 revenues are Siemens Dematic, Schaefer Holding International, Daifuku, FKI and Swisslog. Those are the same five that headed the list last year, except that Schaefer edged ahead of Daifuku this year for the second slot. As it has the past few years, Siemens Dematic continues to hold the pole position, with $3 billion in annual sales, or more than double the revenue of its nearest competitor.

Europe continues to dominate the system suppliers market, with 13 of the 20 companies and four of the top five coming from the continent. Four other firms are headquartered in the U.S.A., two in Japan and one in Australia. Europe also led the way in revenue increases. Eight of 11 European companies that returned from last year's list increased revenue in 2003, while two declined. The U.S.A. had two companies on the list with gains and two with lower sales, while one Japanese company gained and the other was down in revenue.

For the fourth year in a row, each of the 20 companies also had revenues above $100 million. At the same time, the bar was raised for companies to make the list. This year's #20, Flexlink, had higher revenue, $115 million, than any other company in that final spot in previous years' surveys.

Additionally, the combined revenue of all 20 companies also reached $11.96 billion, the highest in several years and $460 million more than in 2002. The average increase per company was about 4% – not bad in a struggling economy.

To qualify for Modern's list, companies must be suppliers of materials handling systems, not just equipment providers. They must also have a presence in North America to be considered a worldwide supplier. In addition to manufacturing at least two major handling system components, a company must also have full-time staff that designs, installs, integrates and implements materials handling systems that include two or more major equipment types. These are transportation devices, storage and staging equipment, picking units, sortation systems, information management systems, data capture technologies and other types of systems. The table on page 42 defines what each member of the 20 supplies.

There are two newcomers to the list this year. Spanish-based Mecalux disclosed its revenue information for the first time and made the list in the thirteenth position with $252 million in sales. The company, with U.S. headquarters in Melrose Park, Ill., is one of the world's largest producers of static racks and automated storage systems. They also provide robotics, controls and software.

Family-held Witron, based in Germany, also joined the list this year at the #16 position. Witron is well known for its picking solutions and integration capabilities. Its U.S. offices are in Arlington Heights, Ill.

While two new companies made the list, two others from last year did not. Our #20 from last year, viastore systems, did not have enough revenue in 2003 to qualify for this year's Top 20. Also, last year's #9, Norwegian-based Dexion, sold off its U.S. subsidiary, Richards-Wilcox, and no longer has a North American presence, a requirement to make the list.

Along those lines, there was much less merger, acquisition and divestment activity than in recent years. However, one major company, Swisslog, is in the process of selling off its hardware manufacturing divisions and will soon be concentrating solely on software and integration capabilities.

Lockheed Martin also acquired baggage handling technology with the purchase of the designs of Airline Baggage Handling, Inc. Increased revenues pushed them up one notch to #9.

One major aberration from last years list is Kardex-Remstar. In previous years, several key overseas divisions were not included in the revenue figures the company provided Modern. That has been corrected in this listing and has allowed them to jump six positions to tie for seventh this year.

Another major change also had Vanderlande Industries dropping four positions to #12. Most of this was due to an upward spike in last year's report from a huge UPS project. While the Netherlands-based company showed less revenue in 2003 than in 2002, it actually had a 31% increase in net income from ordinary business and has recently increased its employee base by 8% to meet anticipated orders.

Trade groups and specific companies we talked to are also looking at similar growth expectations industry-wide for 2004. Hopefully in next year's survey, each of our Top 20 companies will have record gains to report.

Click on the icon to see last year's list. - The World's Top 20 Systems Suppliers - April 2003