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Top 20 systems suppliers

Modern’s 15th-annual survey of the world’s leading materials handling systems suppliers shows a continued trend of increased revenue in 2011 for the majority of the top companies.
By Lorie King Rogers, Associate Editor
April 01, 2012

Here’s the equation: Take the world’s top systems suppliers, add their reported revenue for 2011 and what do you get? A really big number: $14,338,000,000. In fact, Carl Sagan might have said there were billions and billions of dollars spent in the materials handling industry last year.

Modern’s 15th-annual survey shows increased revenue for 18 of the world’s leading materials handling systems suppliers. In fact, this year’s combined total revenue tops last year’s $11.4 billion by about 25%. In addition, the cut off to make the list rose from $100 million to $110 million. See last year’s Top 20 systems suppliers.

This year’s list also welcomes back all of last year’s Top 20, plus one. If you’re doing the math and come up with 21, you’re right. Here’s why: With last year’s No. 1 Schaefer and No. 2 Daifuku both reporting $2.5 billion this year, and currency conversion and fiscal-year-end timing differences, the race was simply too close to call. As a result, both companies can claim top honors.

Here are the details on where the remaining top five companies landed in the Top 20. Dematic keeps a tight hold on its ranking with $1.3 billion, up from $1.2 billion last year. Murata Machinery breaks into the billion dollar category, going from $749 million to $1.05 billion. Mecalux made a run at the billion-dollar threshold with an estimated $952 million in revenue, while Vanderlande posted modest growth to $747 million.

The next five system suppliers, which all experienced an increase in revenue, include Swisslog, Kardex Remstar, Beumer Group, Fives Group and Intelligrated. The combined revenues for these companies totaled $2.79 billion.

Adding to the equation
Going back to the top of the list, Daifuku saw its revenue spike more than $600 million dollars, from $1.95 million to $2.5 billion. The increase was due in part to the April 2011 acquisition of three companies which provide airport baggage handling systems and services, including Logan Teleflex Ltd. (headquartered in the United Kingdom), Logan Teleflex S.A. (headquartered in France) and Logan Teleflex (headquartered in the U.S.). In a statement to Modern, Daifuku also attributed the increased revenue to its sale of storage, transport, sorting and picking systems (primarily automated storage and retrieval systems) to a broad range of industries including food, pharmaceuticals and agriculture.

Schaefer, tied for No. 1, experienced a 16% increase in revenue over last year, going from $2.19 billion up to $2.5 billion. Schaefer company president Arnold Heuzen told Modern that “the company expects continued growth as a worldwide systems supplier as it opens new markets and subsidiaries in Asia, South America and other emerging economies.”

Top 10 news
Dematic and Murata Machinery attributed their company growth to similar factors. On the product side, Ken Ruehrdanz, warehousing and distribution market manager for Dematic, says the market is embracing new enabling technology and that applications for certain systems are on the rise. Regarding geographic coverage, while they were not able to disclose specifics, Murata Machinery told Modern that a significant portion of growth came from increased expansion in specific regions within key vertical markets.

Vanderlande Industries also extended its reach as a systems supplier by acquiring Beewen, a German company that supplies a number of materials handling systems. Swisslog enhanced its offerings by forming a joint venture with Heron Corp., an Austria-based producer of automation components, to manufacture state-of-the-art transport robots and continue its light goods technology expansion.
Beumer Group, which is back in the top 10, also expanded its footprint in September 2011 by acquiring Enexco Teknologies India Limited, located near New Dehli.

Rounding out the top 10 suppliers is the Fives Group, which experienced a bump from $383 million to $508 million, and Intelligrated, which grew from $378 to $435 million.

“Last year, our customers increased their earnings and were looking for an attractive ROI that can be found in our products, services and automated materials handling systems,” says Chris Cole, CEO of Intelligrated. “Intelligrated saw expansion of exports and growth in international business in Canada, Mexico and South America.”

In other news
A number of companies benefitted in 2011 when end users loosened purse strings and invested in materials handling solutions. “There was a lot of pent up demand in the market due to companies not spending money on projects for awhile, and we benefitted nicely from market activity,” explains Jerry Johnson, marketing manager for Knapp. Knapp benefitted to the tune of $94 million, going from $329 million to $423 million.

Market activity also led to a record year for Wynright. In fact, according to Brigitte Janos Brozenec, executive vice president of marketing, 2011 proved to be the strongest year in Wynright’s 40-year history. In addition to a 125% increase in robotic systems sales, the trends toward industry consolidation, productivity related infrastructure investments, planned DC expansion, and distribution center repurposing contributed to this overall revenue growth, she explains.

Stuttgart-based viastore’s reach beyond the four walls resulted in revenue of $125 million up from $104 million last year. New business development and market manager Amanda Rogalski says, “The increase was due mainly to our headquarters out of Germany expanding its export markets. Specifically, the Russian market performed quite well for us in 2011.”

While the Russian market helped viastore achieve a 20% increase, the European market wasn’t as good to System Logistics, which experienced a 15% decrease and missed the Top 20 list this year. Paul Roy, vice president of marketing and product management, believes “the lag was mainly due to the business challenges in Europe last year.” On the upside, Roy adds, “This year is already looking much stronger in both the U.S. and abroad.”

Back in the U.S., Dearborn Mid-West Conveyor saw its revenue increase by $10 million thanks to a boom in its automotive division, explains Michael Paisley, controller for the company’s Michigan division. “Automotive work was slow through 2008 and leading into 2009 with the bankruptcies of Chrysler and GM. They simply slowed production and delayed plans for new car models during that time,” says Paisley, “But since then, there has been a resurgence of new models being pushed out by the Big 3 starting in late 2010, and going well into this year.”

New to the list
Making its first appearance on the list at No. 13 is Kuka Systems North America. Kuka, which develops, implements and launches robot-based logistics solutions for general industry purposes, reported $352 million in revenue for its North American business alone, as global numbers were not ready for release as Modern went to press.

Industry outlook
On the surface, these larger revenue figures may seem like it’s smooth sailing for the materials handling industry. Let’s hope so. But Modern’s recent State of the Industry reader survey, which ran in our March issue, leads us to believe there are still some rough waters yet to navigate.

We reported that 2011 survey results showed that the budgets for equipment spending increased from an average of $395,000 in 2010 to $451,000 in 2011. That makes sense. A number of factors motivated end users to spend money on materials handling equipment, and that’s reflected in increased revenue for most of the leading systems suppliers.

However, our 2012 State of the Industry survey also showed forward momentum stalling a little. And, while the industry outlook isn’t gloomy, the short-term future might not be as bright as hoped. This was also the message at the State of the Industry meeting held at Modex 2012 in Atlanta in February, when the Material Handling Industry of America (MHIA) forecasted continued, but slower growth.

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In an interview with Modern, George Prest, CEO of the MHIA said, “What I hear from our members is that there is money out there, and there’s a lot of quote activity. However, people are being cautious with regard to when they are releasing orders.”

That said, MHIA anticipates an increase in new orders of 8% for 2012 followed by an uptick in orders to 12% in 2013.


Making Modern’s List

To qualify for Modern’s Top 20 list, companies must be suppliers of materials handling systems, not just equipment providers. In addition to manufacturing at least two major handling system components, a company must also employ full-time staff that designs, installs and integrates materials handling systems.

These systems include at least two of the following: transportation devices, storage and staging equipment, picking units, sortation systems, information management systems, data capture technologies and other types of handling equipment.

To be considered worldwide suppliers, companies must have a presence in North America and must also be able to report materials handling revenues to Modern. (Lockheed Martin, for example, is a systems supplier with a North American presence, but isn’t included in our Top 20 list because they can’t single out the revenue that comes from materials handling contracts.)

About the Author

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Lorie King Rogers
Associate Editor

Lorie King Rogers, associate editor, joined Modern in 2009 after working as a freelance writer for the Casebook issue and show daily at tradeshows. A graduate of Emerson College, she has also worked as an editor on Stock Car Racing Magazine.


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