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Thank goodness that’s over!
Thursday, 24 Dec 2009 ( #443 )
News Story
Konecrane's Ettlingen facility
By anyone’s standards, 2009 was a tough year in global business, and the materials handling sector was not immune. Melissa Barnett reports that many of the grim financial predictions for the year came to pass, and by the end of the year’s first financial quarter, the mild-sounding "credit crunch" of 2008 had turned into a full-blown "global financial crisis".

The US-based Material Handling Industry of America (MHIA) predicted in January an 18% - 20% decline in new equipment orders for 2009. This forecast turned out to be extremely optimistic, with a revised MHIA report published in October showing in fact a decline of 44.9% in just the first half of 2009. MHIA expected the drop to steady over the remainder of the year to hold the total year decline at 35% to 38%.

The North American conditions were echoed around the globe, with a general drop of around 40% in new sales recorded by most of the large European and Asian manufacturers and dealers. News recently reported that the recession had to date cost the UK forklift industry GBP344 million (USD 559.5 million) in lost profit.

Hard decisions

Many companies weathered the financial storm by closing manufacturing facilities or by reducing staff.

Forklift manufacturers felt the pressure early and many shed staff consistently through the year; by July, Jungheinrich had implemented 300 layoffs at their German sites and planned to cut another 550 - mainly sales employees - from Germany and overseas. German seat manufacturer Grammer AG had reduced its workforce by 25% by mid- 2009 and flagged more cuts before the end of the year.

After 60 years of forklift production, Linde announced plans to close its Basingstoke operation in the UK, with job losses of 350. Production is to be transferred to mainland Europe over the next 12 months. About 200 sales and marketing and after-sales staff have been retained.

In North America, the story was much the same. In May, CNH Global NV, manufacturer of Case rough-terrain forklifts, based in Burlington, laid off 150 of its workers. Komatsu USA delayed the start of forklift manufacturing at Newberry, South Carolina until April 2010 and closed its Covington, Georgia production plant, saying the decision would strengthen its market position as it moved towards market recovery. Raymond Corp also mothballed one of its Canadian assembly plants, preferring to move the operation closer to home.

In October and November, Konecranes announced plans to close at least two of its crane plants, one in Germany and the other in Birmingham, Alabama. According to a company spokesman, the decision was part of its plans to restructure the organisation and cut costs in response to declining demand.

Tyre manufacturers seemed particularly hard hit. In early April, Trelleborg Wheel Systems America (TWSA) announced the closure of its Hartville, Ohio facility. Soon afterwards, Michelin and Continental also announced plant closures and staffing cuts in July, and Solideal admitted that it was experiencing similar difficulties.

Some didn’t make it

Sadly and despite their best efforts, some companies in the materials handling sector didn’t make it to the end of 2009. Early in the year, Comlec Units, a British forklift component remanufacturer, repairer and supplier, went into voluntary receivership. Chinese forklift manufacturer Wuxi Hu-Lift Equipment was dissolved by a shareholder resolution in March.

Companies weren’t the only things to fall in 2009. Matex, the Australian Materials Handling Exhibition was cancelled, with organisers citing lack of funding as the reason, particularly from the larger logistics and supply chain companies. IMHX, the UK event, is still scheduled for 2010 but has been postponed from its original start date of March to November. Organisers said they had reservations from major exhibitors about the original date because of the economic climate.  

Acquisitions, Expansions and Mergers

However, the news wasn’t all bad. There were distinct signs of life in a number of companies, with news of acquisitions, expansions and contracts taking place across the materials handling sector.

KION Baoli opening ceremony
In January, global manufacturer KION joined forces with Chinese forklift manufacturer Baoli to form KION Baoli (Jiangsu) Forklift Co Ltd to develop, produce, market and service forklifts. KION took a 60% stake in the new company, to be based in Jiangsu province, China. As in past years, 2009 saw contracts signed between European OEMs and Chinese suppliers, although numbers were significantly down.

Mid-year, Canadian-based Brookfield Asset Management acquired UK ports and logistics business PD Ports. PD Ports employs over 1,140 staff and has an annual turnover of about USD199.3 million (GBP120 million). Operations in the UK include Teesport, Humberside and Felixstowe.

In August, Brazilian attachment manufacturer SAUR Equipamentos S.A. and Germany’s Kaup GmbH formed an agreement to co-operate in Brazil. Under the deal, SAUR will market and sell the complete range of the European manufacturer, while local requirements will be manufactured at the SAUR production plant in Panambi, using KAUP components.

Also in August, the off-again, on-again Terex acquisition of Fantuzzi was completed for USD220 million (EUR155 million). The sale gave Terex ownership of the Fantuzzi and Noell lines of cranes, straddle carriers, reach stackers and forklifts.

In the same month, Nacco Materials Handling Group Inc (NMHG) finalised an arrangement with Arnold Machinery Co to take over sole dealership of both Yale and Hyster brands in the Rocky Mountain Territory of the US. The territory covers Colorado, Utah and Wyoming and portions of Nevada, Idaho, Oregon and Arizona. In a change from usual Nacco policy this allows Arnold to be the only authorised dealer for both brands in North America.

In September, Cargotec announced that its new multi-assembly plant in Northern Poland would be operational by mid-2010 and would employ 200 new staff. In the same month, Jungheinrich AG signed an agreement with Mitsubishi Caterpillar Forklift America Inc (MCFA). The terms of the agreement will be implemented in 2010. MCFA will distribute Jungheinrich-branded warehouse products in the United States, Canada and Mexico; Jungheinrich will design new North American market products that MCFA will manufacture; and Jungheinrich will supply class 1 products for sale under the Cat forklift brand and class 3 products for sale under the Mitsubishi brand.

Fuel cell research and development has been aided this year by the US federal and various state government initiatives. Universal Precision Products Inc (UPP) of Akron entered a five-year manufacturing partnership with Nuvera Fuel Cells Inc of Massachusetts.

A number of expansions took place at the beginning of the year but slowed down towards the latter half as companies restructured or put plans on hold. In January, Linde opened a new facility at its UK plant at Methyr Tydfil.

Jungheinrich, despite closures in other areas, capitalised on a strong used equipment market by opening seven specialist used forklift salesrooms throughout the UK. In March, Telehandler supplier JLG continued its plan to capitalise on growth in the Asian market by opening a sales and service centre in Singapore.

Hytsu's new manufacturing facility in Shanghai
In September, Chinese forklift manufacturer Hytsu opened its third factory in Shanghai. The facility is expected to produce 10,000 units annually and covers 10,000sqm of land. The new plant includes a forklift assembly line, testing centres and a logistics distribution centre.

In November, another Chinese manufacturer, E-P Equipment, opened what it believes to be the largest electric warehouse equipment factory in China. The production floor of the new facility is 34,000sqm.

New products and innovations

Unfortunately, innovation is not something that has priority in times of recession, as Bill Rowan, president of Sunbelt Industrial Trucks, Dallas, Texas, recently told News. "Right now, everyone is in survival mode and research is a luxury most cannot afford and will not invest in," he said.

In February, North American heavy equipment manufacturer Taylor Machine Works introduced its TXB Series of big wheel industrial forklifts. The TXB Series includes four models with lift capacities raging from 18,000lbs to 30,000lbs (8,000 to 13,500kg).

In the same month, Maximal launched a diesel forklift in both a 10 ton and 4 ton capacity. The 10 ton is Maximal’s first foray into heavy-duty forklifts and is designed to expand the company’s M series options.

In March, Ningbo Ruyi launched a new electric ride-on reach stacker, the CQDH15C, which it hoped would be ideal for the American market. The machine features a choice of AC or DC motors, non-polar speed control, single or double scissor lifts and variable mast heights.

Also in March, Watts Tyre Group introduced its latest industrial pneumatic tyre, the Sherpa, designed for difficult working conditions.

Crown Equipment Corporation announced in mid-year the launch of its first company-manufactured internal combustion (IC) forklift with the C-5 Series.

In August, TCM America announced the introduction of a new line of battery-powered walkie/rider forklifts. The new line means that TCM now has representation in the class III group of forklifts.

Still in August, Hoist Liftruck of Illinois, US, unveiled a redesign of its P Series of pneumatic empty container handlers. The P series features a modular chassis, similar to the ECH Series, which allows for cost-saving containerised shipping and easier maintenance.

There was a flurry of new product releases in November/December, with Bulgarian manufacturer Apex 11 launching its new three-wheel multidirectional forklift, the A-Lift, in November and KAUP GmbH kicking off December with the release of the B-series Triple pallet handler.

Chinese manufacturer Hangcha launched its new generation XF series, believing it to be the best-looking forklift they have made in 35 years.

Mecano Continental S.A. launched the diesel semi-industrial DSI 25/30 model in its Mast Explorer range. The DSI 125 and DSI 130 (2,500kg and 3,000kg capacity) rough terrain forklifts come in both two- and four-wheel-drive with lift heights of up to 6 metres.

Kalmar's new DRF420-450L Reach Stacker
This month saw Kalmar Industries AB launch its new DRF420-450L reach stackers which Kalmar believes will fill the niche for those container handling customers that don’t require a heavy-duty, intensive-use machine.


Thankfully, peer recognition will continue to be shown regardless of the economic climate and there were a number of worthy award recipients this year.

The 2009 UK Fork Lift Truck Association Awards for Excellence, the Archies, were held on Valentine’s Day. Winners included Douglas Gillespie, of Douglas Gillespie Plant (Lifetime Achievement Award); Environment Award won by Yale Europe Materials Handling and Innovation Award given to Combilift Ltd.

Crown's award winning design - the GPC3000
Crown was awarded the Good Design Award, sponsored by the Chicago Atheneum Museum of Architecture and Design, for its GPC 3000 series order picker. It was the fifth time Crown had won the award.

The Crown GPC 3000, along with JLG Industries LiftPod, also won gold in the commercial and industrial design category of the 2009 International Design Excellence Awards (IDEA).

Linde won two awards from the Xiamen Municipal Government at a ceremony in Beijing in February: a top 10 industrial enterprise award for outstanding contribution to Xiamen’s economic development and an outstanding product award for its 115 series electric reach truck.

Still in China, the China Industrial Truck Association presented Mr Bob Warren, president of Cascade Corporation, with a Lifetime Contribution Award. It was the first time that CITA had bestowed such an award.

This year, News would like to bestow its own awards, the Bouquets and Brickbats awards. Each year we publish stories, both good and bad, from the materials handling world. Some events make the materials handling sector a better place and to the companies who achieved this we would like to give a Bouquet award.

The recipients include:

Barloworld Handling for taking on 19 new apprentices this year despite the current difficult economic times.

Linfox Australia for reducing its greenhouse gas emissions by 28%, 12 months ahead of schedule.

Wegmans Food Markets for purchasing 59 Crown fuel cell-powered pallet and stand up forklifts, along with GenDrive fuel cell systems from Plug Power Inc.

Jungheinrich pink pallet jack generously donated to the Susun G Gorman breast cancer movement
Jungheinrich for donating a pink electric pallet jack to the Susan G Kormen breast cancer movement.

The Brickbats go to those companies which in no way enhance the materials handling sector. This year the recipients are all those companies and individuals who continue to flout workplace health and safety directives.

Most weeks this year News published at least one story which involved the death or injury of an employee by a workplace forklift. The accident reports News publishes are just the tip of the iceberg, so many more of them go untold.

Another Brickbat to those companies which ignored our requests for comments or information – and special mentions for those which later accused us of ignoring them in our reports.

Last word

Finally, at the very end of the year, the global materials handling industry appears to be experiencing a small but noticeable change in fortunes.

Jungheinrich reported a marginal resurgence in its third quarter financials for 2009 compared to previous quarters.

Young An Hat Company subsidiary Clark Europe, despite posting its first ever loss this year, predicts recovery and a 33% rise in sales in 2010.

Businesses surveyed by News believe the recession has done its worst and most are "cautiously optimistic".

In a similar survey, MHEDA found that 68% of members anticipated sales increases in 2010.

MHIA have predicted a conservative growth for next year. Hal Vandiver, MHIA executive vice-president of business development, says: "We now believe that growth in the 2%-3.5% range is possible for 2010."
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