KION invests in growth

News Story
- 5 Mar 2020 ( #964 ) - Frankfurt, Germany
3 min read
KION CEO Gordon Riske
KION CEO Gordon Riske
Following an extremely successful 2019 in which KION Group achieved its targets and, in some cases, significantly exceeded them, the group is now stepping up capital expenditure in order to drive its medium- and long-term growth.

KION has confirmed plans for a further factory for counterbalance trucks in the eastern Chinese city of Jinan which will enable the group to broaden its product portfolio in one of the most important markets. To this end, the KION group and key investor Weichai Power have established a new company in which the KION Group has a stake of 95% and Weichai Power 5%. This move should enable the Group to capitalise on opportunities for growth in the value segment and in the increasing electrification of industrial trucks in China.

The KION Group will invest around EUR100 million (USD112 million) and create more than 800 new jobs at the new site in the province of Shandong by 2025. The new highly automated plant, the adjoining KION Value Competence Centre, and the expansion of the sales and service network should enable the KION Group to significantly strengthen its position in this important market.

In another development, KION Group has acquired all of the shares in UK software company Digital Applications International Limited (DAI), which specialises in logistics applications. The KION Group's overall investment will amount to around EUR120 million (USD134 million). DAI will become part of the Supply Chain Solutions segment and will significantly expand Dematic's software portfolio, which supports the transportation, storage, and distribution of goods right along the supply chain. By acquiring DAI, KION will gain around 240 employees with extensive software expertise and specialist knowledge of logistics automation and supply chain engineering.

"These key strategic investments will strengthen our competitiveness for the long term and are the next logical step in the implementation of our KION 2027 strategy," says group CEO Gordon Riske. "In the long term, we predict that worldwide demand for industrial trucks will rise by around about 4% per year and that growth in demand for supply chain solutions will be in the high single digits. We will seize these opportunities by offering many new products, a broad portfolio, and an extensive range of services, software, and digital solutions."

Of course, unforeseen events like the Covid-19 outbreak may impact on those projections for market growth.

"The global materials handling market is likely to see further strong growth in 2020 if economic conditions stabilise slightly as expected," the company says. The ongoing expansion of the supply chain solutions market and a stabilisation of the global market for industrial trucks are primed to be the engines of growth. Overall, the global materials handling market is once again expected to grow at a much faster rate than global GDP. The KION Group believes that this is primarily because the fundamental growth drivers will remain intact, particularly the fragmentation of value chains and consumers' increasing preference for e-commerce. Growth at regional level, particularly in the cyclical market for industrial trucks, will again depend heavily on the economic conditions in the main sales markets."
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