Another big year for materials handling

Local Feature Article
- 5 Jan 2017 ( #802 )
16 min read
The industry came together at CeMAT 2016
The industry came together at CeMAT 2016
There was plenty of activity in the materials handling market in 2016 - and the market growth looks like continuing in 2017. Allan Leibowitz looks at the A to Z of the past year.

Acquisition activity was dominated by the protracted Konecranes/Terex merger, which kicked off in late 2014, but was delayed in January when Terex received a rival cash bid from China's Zoomlion Heavy Industries Science & Technology Co. Then, in May, that deal was finally scuttled when Konecranes agreed to buy Terex Corp's crane business for EUR1.1 billion (USD1.3 billion). This deal is still to finalise. Meanwhile, Konecranes has signed an agreement with Columbus McKinnon Corporation for the sale of the STAHL CraneSystems business. Konecranes will receive cash proceeds of EUR224-230 million (USD240-247 million) from the transaction, depending on the 2016 result of STAHL CraneSystems. In February, Hyster-Yale Materials Handling announced it would buy Penta Holding S.p.A., the majority shareholder of Bolzoni S.p.A. The two entities entered into an agreement for Hyster-Yale to buy 100% of Penta's outstanding shares for EUR53,495,837 (USD 59.66 million). Hyster-Yale Group in April acquired Speedshield Technology's telematics installation and distribution businesses in the United States and the United Kingdom. The acquisition provides Hyster-Yale with the exclusive distribution rights of these businesses' products in all areas outside of Australia. In June, the Palfinger Group agreed to buy 100% of the shares in Herkules Harding Holding AS and, thus, the globally operating Harding Group. The seller is the Norwegian private equity fund Herkules. It was another busy year for Belgium's TVH Group which continued its acquisition spree in July, buying the shares of French company GDI Group, a European leader in the supply of replacement glass and accessories for agricultural tractors and industrial plant cabs. The purchase came hot on the heels of TVH's acquisition of the shares of Industrial Access S.A. Before that, TVH had purchased the assets of the Danish forklift manufacturer DanTruck ApS. As a result, TVH became the exclusive distributor of parts for DanTruck and Heden lift trucks. In October, Manitex International sold its Liftking rough-terrain forklift subsidiary to the LANCO Group of Companies, parent of Mi-Jack Products, for USD14 million. Illinois-based Mi-Jack produces rubber tyres and rail-mounted gantry and industrial cranes and sees the acquisition as a good fit with its goals and reputation. In November, NEIP III SpA, an investment company run by Finint & Partners, and Group Battioni Pagani subsidiary BP Handling Technologies Srl signed an agreement to acquire 100% of CVS Ferrari Srl Manitex International Inc., a company listed on Nasdaq.

The UK voted to leave the European Union<br />Image: British Irish Trade Association
The UK voted to leave the European Union
Image: British Irish Trade Association
Brexit came as a shock to the materials handling sector in June, when 51.9% of UK citizens voted to leave the European Union. "There's no doubt that there will be significant changes ahead which will affect all of us in the UK - for better or worse," Peter Harvey, chief executive of the FLTA, told Forkliftaction News. James Clark, secretary-general of BITA, noted: "Our sector has weathered various storms in the past such as the lengthy global financial crisis and other economic threats and emerged all the stronger for it and we are confident that the industry can adapt to the evolving political climate and continue to be successful."

China's forklift manufacturers continued to make inroads, both in their domestic market and globally, with Anhui Heli ranked10th in the 2016 DHF manufacturers listing, followed closely by Hangcha. The Chinese were out in force at CeMAT in Hannover, where observers were impressed not just by the number of suppliers, but also the range and quality of the products they had on show. LiuGong used CeMAT to launch its new C-series forklifts "designed for export markets rather than merely adapted from domestic designs".
Ruyi also showed a move from a price focus towards quality, reflecting its dual emphasis on exports and growing domestic marketshare. Maximal also had a number of brand new products on show at CeMAT, including a new rough-terrain forklift said to be the only model of its type produced in China. EP, meanwhile, showed almost 20 new products "suitable for the European market".

Dematic's purchase in June by the KION Group shows the rising importance of automation in the new materials handling environment. KION completed the acquisition in November, and John Baysore, previously CEO of Dematic North America, was appointed as president and chief executive officer. Celebrating the closure of the deal, KION CEO Gordon Riske said "the transaction brings together the world's most profitable manufacturer of forklift trucks and warehouse technology with one of the largest and fastest-growing warehouse automation and software solutions providers".

Energy sources continue to compete in the market, prompting the CeMAT organiser to launch its first-ever energy-themed trade show in the US market. Called Hydrogen + Fuel Cells NORTH AMERICA, it will be staged alongside Solar Power International at the Mandalay Bay Convention Center in Las Vegas from 10 to 13 September 2017. Deutsche Messe has been operating an event dubbed Hydrogen + Fuel Cells + Batteries as a distinct showcase at HANNOVER MESSE for more than 20 years. In 2016, the showcase featured more than 160 exhibitors from 25 nations.

Omega Lift's IP was acquired by Liftking
Omega Lift's IP was acquired by Liftking
Failed Canadian heavy forklift manufacturer Omega Lift reached the end of the line in October, when its assets were sold to Hilco Industrial Acquisitions Canada and later auctioned off. Omega Lift left a string of creditors and unhappy customers when it went into liquidation at the hand of its financiers, who were owed more than CAD10.8 million to secured creditors. In November, the company's remaining assets, its intellectual property, patents and some of its stock, parts and equipment were snapped up by Liftking Manufacturing Corp.
Meanwhile, in June, Chinese manufacturer Shangli announced it was restructuring after "a terrible period in the last six months". In April, it was understood that Shanghai Shangli Heavy Industry Co., Ltd. (SAL Group) had been badly affected by slowing export sales and loss of marketshare in the domestic market, but the owner, Ye Zhongdao, reinvested in the company, moving to a new factory and attempting to restore market confidence.

Global market growth appears to be continuing for the forklift sector. Consolidated 2016 figures are not yet available, but the industry is confident of beating 2015 performance, marked by steady growth in the European and American forklift markets. China had slowed in 2015, but its export push continues. Brett Wood, chairman of the Industrial Truck Association (ITA) and president and CEO of Toyota Material Handling North America, says the global forklift truck and the broader materials handling industry continued to be relatively strong, reflecting strong economies particularly in North America and Europe. In fact, several countries recorded truck sales at all-time high levels.

Heavy, cumbersome loads are stimulating the development of sideloaders, described in a Forkliftaction News special feature as "the chameleon of materials handling equipment - adept at being modified to suit customers' requirements". Read the full feature here.

Industry 4.0, the integration of robotics and smart systems into logistics operations, was the major talking point for the industry. In April, business advisory firm PwC reported that more than half of US manufacturers are implementing automation in materials handling. Industry 4.0 was equally evident in Europe and a key theme at Linde's World of Material Handling show, according to vice president of sales and service marketing Massimilano Sammartano, who points out that seven of the 10 highlights were non-traditional forklift solutions. Later, at CeMAT in Hannover, Toyota Material Handling US president Brett Wood told Forkliftaction News he was struck by "a big increase in automated and semi-automated lift trucks".

Jungheinrich chairman Hans-Georg Frey
Jungheinrich chairman Hans-Georg Frey
Jungheinrich continues its strong performance. Ranked third in the latest DHF listing, the group reported growth in its last financial period, with sales and orders rising in the third quarter. The European market was the driving force, expanding by 13%. Following the collapse of recent years, Russia returned to its course for growth (+28%). The Asian market recorded a smaller gain, growing by 3% (+15% in the third quarter), with demand in China rising by 9% since January. Market volume in North America was up 3% year on year (+12% in the third quarter). Product highlights included two wins at the IFOY awards, with the EKX 516 winning the Warehouse Truck (highlifter) category and the Jungheinrich EJQ 325 snaring the honours in the Special Vehicle class. Meanwhile, the group continues to roll out its dealer strategy which saw the acquisition of a dealership in Malaysia and the majority stake in NTP Forklifts in Australia in 2015. Last year, it established a sales division in Chile, taking over the assets and staff of Spitec Renta Lift; and in South Africa, Jungheinrich took over the assets and operations of BME Group.

KION group, the world's second-largest manufacturer, closed out last year in a strong position after recording a solid third quarter. Driven mainly by growth in Europe, revenue grew by 3.8% to EUR1.283 billion (USD1.42 billion), while the group's earnings were up 4.6% on the same period last year, EUR126.8 million (USD140.72 million). The KION Group saw the number of trucks ordered go up by 10.3% in the third quarter of 2016. The group's performance has been boosted by its May 2015 acquisition of Belgian automation specialist Egemin Group. "Thanks to a unique and comprehensive portfolio of products ranging from forklift trucks to fully automated materials handling solutions, we will be better positioned than ever to meet the needs of our customers and to support them with value-adding solutions," says KION CEO Gordon Riske.

Lithium-ion was the battery technology to watch in 2016. The technology, popularised by Tesla in the automotive space, was recognised with its first coveted IFOY award - also a first for a Chinese truck. BYD's ECB18C, an 80 v lithium-ion stacker, took the title in the Counterbalance Truck up to 3.5 T category. The technology is finding its way into the ranges of mainstream manufacturers, with Carrefour Italy choosing a fleet of new EXU Li-Ion low-lift pallet trucks from STILL late last year. The retailer has deployed 66 new lithium-ion trucks.

Manitou used its good performance in 2016 to fund a buy-back of 2.8% of its share capital from Toyota Industries Corporation. The transaction followed the termination of the industrial partnerships between the two companies, dating back to December 2014. The company reported growth in the third quarter, with sales rising 18% to EUR323 million (USD351 million). There has also been a modest rise in orders, with EUR206 million (USD224 million) booked in the quarter - up from EUR189 million (USD205 million) for the same time last year. Like other manufacturers, Manitou saw steady growth in Europe, but it found the going tougher in North America, where markets were "still weak and under competitive pressure".

National Forklift Safety Day on June 14 brought together leading US companies for the third time, with a number of events around the nation. NFSD, sponsored by the Industrial Truck Association, serves as a focal point for manufacturers to highlight the safe use of forklifts and the importance of operator training. James J. Radous III, UniCarriers president and chairman of National Forklift Safety Day, led a number of events in Washington DC and met with legislators on Capitol Hill to raise awareness of the importance of forklift safety. Meanwhile, in the UK, September was marked as Forklift Safety Month (Safetember) as part of an initiative by the Fork Lift Truck Association. FLTA has been organising its safety campaign since 2008 to raise awareness of the dangers involved in forklift operations throughout the industry.

Jim Dicke
Jim Dicke
Obituaries last year included some esteemed industry leaders. November saw the passing of Crown founder James Frederick Dicke, who died at home at the age of 94, following a struggle with cardiac issues. Forklift pioneer Freddy Brown passed away peacefully in his sleep on October 16, with his wife at his side, after fighting a brave battle against Alzheimer's disease. Brown is best known as the founder of Translift. He pioneered the design and manufacturing of man-rising narrow-aisle forklifts before moving on to design the current Bendi range. Earlier that month, tributes poured in for John Strang, a driving force behind ICHCA International (International Cargo Handling Coordination Association), who died peacefully at home on 29 September 2016 after a long illness. Strang was appointed to an Officer (AO) of the Order of Australia on June 13, 2016 for distinguished service to the transport and logistics sector through executive roles in progressing industry development, and to professional business organisation . George Coates, secretary general of the British Industrial Truck Association (BITA) from 1982 to 1999, died on 2 August, a few days after his 90th birthday. In February, veteran forklift executive Rolf Slobotzky, a pioneer in the materials handling industry in Latin America, passed away at the age of 91. Forkliftaction News readers will recall Slobotzky's popular and long-running "South of the Border" column, in which he chronicled developments in the industry in Latin America.

Port growth around the world ensured plenty of orders for the big names like Konecranes and Kalmar. Among the biggest Konecranes deals were an order from the Virginia Port Authority for 86 automated stacking cranes (ASCs); 12 RTGs for the South Carolina Ports Authority; 10 high-specification forklifts to Bristol Port Company in a GBP1.5 million (USD2 million) order (through Cooper Specialised Handling); and 13 Empty Container Handlers for DP World in Jebel Ali, Dubai, UAE. Kalmar, meanwhile, obtained orders to supply 23 diesel-electric straddle carriers to Transnet Port Terminals (TPT) Durban Pier 2, a dedicated straddle carrier operation in South Africa; 34 Kalmar Gloria reachstackers to the European ro-ro terminal operator C.RO Ports SA; and 25 forklift trucks to the Algerian port procurement company, Groupement D'Interêt Commun Des Entreprises Portuaires (GICEP). The company has wound back production capacity, moving production of forklifts from Sweden to Poland.

Rationalisation saw the closure and/or relocation of manufacturing facilities, especially in Europe. Caterpillar will close its plant in Gosselies, Belgium. The measure follows an announcement that Caterpillar would cut some 10,000 jobs worldwide to increase profitability. Terex Cranes will consolidate its three current manufacturing locations in Zweibrücken, Germany into two. The company will continue manufacturing operations of the Demag crawler and all-terrain crane lines in its Dinglerstrasse and Wallerscheid locations and make multimillion-dollar investments in both facilities to support ongoing manufacturing operations. However, it will cease machine production in the Bierbach facility in 2017 and the facility will be sold.

SOLAS, the International Convention for the Safety of Life at Sea, was amended on July 1 2016 with the introduction of new weighing regulations that require packed shipping containers to have a verified gross mass (VGM) before they can be loaded on a ship for export. Although there was initial confusion, the changes seem to have been implemented fairly smoothly, thanks in part to a barrage of new hardware and software solutions such as BISON's world-first system for weighing containers on a trailer chassis and Mobicon's Mini Straddle Carriers TF2 which can be fitted with VGM container weighing equipment.

Toyota retained its position as the largest player in the industry in the 2016 ranking by DHF. The ranking, based on previous-year results, puts the Japanese giant's revenues at JPY924.9 billion or EUR6,592 million, representing growth of 14.3% or 16% for the respective currencies. According to the report, TMHG's growth extends to all regional markets, notching up growth of 5.4% in Japan, 15.3% in Europe, 9% in North America and 17% in Asia, Latin America, Australia/Oceania, the Middle East and Africa. Toyota is not just competing for the premium market, but is attacking the 'value end' with the Tailift and CT Power brands it has acquired.    

The United States market is tipped for a significant decline in new orders in 2017. MHI's MHEM Forecast reported that new materials handling orders peaked in 2015 at a record high of USD33.7 billion, with domestic demand also at a record level of USD33.5 billion. The report went on to say that materials handling growth slowed significantly in 2016, adding fears for "significant downside risks" in 2017, but subsequent improvements in 2018 and 2019. Downside risks include slowing domestic manufacturing, the slowdown in oil and gas, the relatively strong dollar, slowing global growth, Brexit, and volatility in US equity markets. This pessimism is not universal, however, and another report predicts investment growth. The 2016 Equipment Leasing & Finance U.S. Economic Outlook released by the Equipment Leasing & Finance Foundation predicts "modest equipment and software investment growth". Materials handling is one of the bright spots in the Economic Outlook, which is focused on the USD1 trillion equipment leasing and finance industry.

F-TEC's training centre opened in July 2016.
F-TEC's training centre opened in July 2016.
Vocational training in the UK took a step forward in July with the opening of F-TEC's new training centre in Swindon. The 5,000 sqft. (465 sqm) facility features lecture theatres and a workshop area where apprentices will gain practical experience across a broad range of forklift brands and model types while established engineers will be taught the specific new skills required by their employers. F-TEC (Forklift Training Engineering Centre), formerly BITA Academy, is the industry-led organisation that delivers apprenticeships in materials handling equipment engineering and the June name change was part of a wider overhaul of the apprenticeship provider's operations.

Els Thermote
Els Thermote
Women in the industry were the focus of an in-depth report in Forkliftaction News in August. The report quoted Liz Richards, CEO of the US-based MHEDA industry group, who is seeing more and more women attending the association's educational conferences, conventions and regional networking summits. Among the successful forklift women featured in the article was Els Thermote, CEO of TVH in the Americas. She started in the forklift industry at an early age in Belgium, working for her father and co-founder of TVH, sweeping floors and counting inventory. Thermote grew with the company, working her way up through the ranks through hard work and determination and today leads its American operations.

Xtreme Manufacturing gets a mention not just because it's the only company starting with that letter, but also because it entered the Latin American market in December with the opening of Ahern Chile, a new sales and service provider based in Santiago. Xtreme and stablemate Snorkel have grown internationally alongside the Ahern International distribution group and its subsidiaries - Ahern Australia, Ahern Japan, Ahern Deutschland and Ahern Canada.

Yanmar added three new turbocharged and aftercooled engines to its range, joining the company's existing TNV family of common rail engines which are EPA Tier 4 final, EU Stage 3B and FOEN (Switzerland) certified. The new models came ahead of the EU's new so-called 'Stage V' regulation, which is set to reduce emissions even further by setting stricter limits, making European mobile machines the cleanest in the world. To ease the burden on manufacturers, the European Commission has granted an extension of the general transition scheme by six months (24 months in total) to give European machine manufacturers sufficient time to re-design their fleet to comply with the new requirements. Furthermore, introducing a provision on replacement engines with a time limit of 20 years will allow for the continued use of machinery using replacement engines, thereby contributing to the EU's objectives on resource efficiency.

ZAPI, the Italian manufacturer of electronic speed controllers, electric motors, battery chargers and associated products for electric and hybrid vehicles, acquired all outstanding shares of Delta-Q of Burnaby, British Columbia, Canada. "The acquisition of Delta-Q is a strong strategic fit for ZAPI Group, and will provide additional solutions that the combined customer base will benefit from," said Giannino Zanichelli, president of ZAPI Group.
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Inside Forkliftaction

The year is not even a month old, and already we are seeing increased acquisition activity in the US dealer market.
One has to ponder the reasons for this surge, and no doubt, intensifying competition is a major driver. In order to prosper, dealers need critical mass, access to multiple
...Continue Reading

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