By Chris Powers
By almost any measure, 2014 was a very successful year for the material handling industry. Indeed, many manufacturers and suppliers members indicated that 2014 was a record-setting year. A rebounding economy, pent-up demand for new and used equipment, strong international markets and a drive to improve efficiencies all helped make the past year one that we will be talking about for a long time.
With few exceptions, MHEDA Supplier/Associate Members expect those good times to continue into 2015. The rate of growth may be slowing down a bit, and there are still challenges to overcome. However, trends toward expanding e-commerce and retail distribution, emphasis on lean processes, lower energy prices and the push toward energy efficiency, among others, are keeping the general outlook optimistic for more good times ahead. Steve Lippert, executive vice president of Hamilton Caster & Mfg. Co. (Hamilton, OH), exemplifies the spirit of many of his fellow Supplier/Associate Members when he says, “The material handling industry as a whole will be robust. Aerospace and automotive markets are already flying high, and if housing ever becomes a factor again, watch out!”
However, the MHEDA Supplier/Associate membership is nothing if not practical, so it realizes that the high times won’t last forever. Uncertainty abroad, volatility in the stock market, government gridlock and a slow-to-rebound job market are just a few of the potential issues MHEDA members see as potential obstacles. Most do not expect inflation to be a major issue but it may be something to watch in certain segments. .
Consumers have higher expectations than ever, which continues to put pressure on material handling distributors and suppliers. Vic Kedaitis, president and CEO of Worldwide Material Handling Products (Romeoville, IL), speaks for many Supplier/Associate Members, saying, “Like any business-to-business supplier, we deal with customers who want their purchases to be quick, easy and accurate. This demand is more critical than ever and tolerance for errors is low.”
With that perspective in mind, MHEDA’s Supplier/Associate members predict measured growth in 2015.
E-commerce is expected to drive up sales for SI Systems (Easton, PA). “We’re seeing a much higher level of quoting activity in the pipeline,” says John Molloy, president/CEO. The company moved into a new building in 2014, and Molloy plans to add geographic-specific staff in 2015. A big driver for the company has been its success in utilizing social media tools such as Twitter, Facebook, Google+, LinkedIn and YouTube. “These social media outlets dramatically increase our placement in online search results, which has greatly increased our online exposure with potential partners and end-users.”
A 20% sales escalation is on the horizon for Schaefer Systems International (Charlotte, NC). “We see positive signs, particularly in the semi-automatic product lines: vertical lift modules, deep-channel pallet storage and integrated standard solutions,” says Klaus-Dieter Wurm, vice president and managing director. He points to a steady upswing in quotations and the introductions of a new pallet conveyor and a new carton conveyor as drivers of that growth. The company expanded its corporate headquarters in 2014 to increase office space capacity and also expanded its automation engineering facility to make room for more applications engineers, software engineers, mechanical engineers and structural engineers.
Hytrol Conveyor Company (Jonesboro, AR) had one of its best ever years in 2014. “People are spending money again and investing in equipment and technology,” says Philip Poston, director of communications. “Customers are requiring more customization, and we are responding to that with more specialized solutions while allowing them to test their products within our facility.” For 2015, Poston predicts 10% sales growth accompanied by a 5% increase in staff. A five-year facility-expansion plan is in the works, which may be expedited to reallocate existing space and accommodate ongoing lean process improvements. A software-based technology product and enhancements to an existing product will contribute to the anticipated sales growth.
Handle-It (Milwaukee, WI) experienced its highest-ever quote volume in 2014, and it expects additional growth this coming year. The company anticipates sales growth of 5-10% to be driven by new products introduced in 2014 and 2015 and a focus on the pharmaceutical market in 2015. “We see pharmaceuticals as a tremendous growth market for us, and we will focus on products that work in that market,” says Eugene Schenk, sales manager. “Also, we have invested space and resources to have some products available immediately for customers.” To support its growth, Handle-It will add some personnel in technical support, engineering and product development and is placing an emphasis on social media in 2015.
Thanks to an increasing demand for a safe and secure mounting technology for warehouse and distribution vehicle fleets, Gamber-Johnson, a Leggett & Platt Commercial Vehicle Products Company (Stevens Point, WI) expects to see at least a 30% increase in sales within its material handling product line. “We have partnered with key distributors of technology and vehicle platforms to ensure that we provide a total solution that meets the need of the end-user,” says Tom O’Brien, product manager. “As more technology is integrated into the material handling equipment, we will continue to support it, adapt and develop innovative products.”
Having experienced tremendous international sales over the last two years, Morse Manufacturing Company (East Syracuse, NY) expects moderate overall growth of 7% in 2015. The company has a new drum handling product in the prototype stage that President Nathan Andrews expects will help drive some of that increase. He is also working with his own team, distributors and suppliers to address one of the industry’s biggest challenges. “Lead times are becoming an industry-wide issue, because customers expect instantaneous results,” Andrews says. “We are taking measures internally in terms of cross-training and working with suppliers to communicate delivery expectations honestly.”
Dan Gentile, president of Save-ty Yellow Products (West Chicago, IL), saw sales rise by at least 25% in 2014 and is looking forward to another strong year in 2015. “We have added several additional employees in all departments, including a business development manager, inside sales and outside sales staff,” he says. Gentile is offering a variety of new products in 2015.
“As the economy continues to improve, we see our customers growing or improving their facilities. Manufacturers are adding capacity and equipment that provides added productivity and safety,” says Louis Coleman, director of sales and marketing at Autoquip Corporation (Guthrie, OK). “Customers are still playing catch up with a robust market and are looking for large-capacity, high-travel, custom-designed lift products.” It all adds up to an expectation for 10% sales growth. Coleman points to the company’s YouTube channel as an essential marketing tool. “It allows us to show potential customers our design and manufacturing capability through seeing our products operate via video. If a picture is worth a thousand words, then a video is worth a million. When we release a video to our channel and send email blasts, these video create lots of traffic and phone calls,” Coleman says.
Following an 8-10% sales gain in 2014, Starrco Company (Maryland Heights, MO) is predicting another increase of 10-20% in 2015. President Bryan Carey says the company will be adding salespeople and project support people to help accommodate the expected sales increase.
According to Wayne Meyer, director of sales and marketing, Jifram Extrusions (Sheboygan Falls, WI) is undertaking aggressive sales and marketing initiatives that will help the company maintain the strong sales growth it saw in 2014. The company will release line extensions in 1Q 2015 as well additional custom-sized pallets targeted for both distributors and end-users. An investment in plant equipment will help automate internal processes, and an investment in its online presence and an expanded mobile platform will help provide customers will real-time information.
At Bluff Manufacturing (Fort Worth, TX), President Andrea Curreri is seeing end-user needs become more sophisticated, and customers are making more complex demands for efficiency, automation and reduced down time. “Sellers need to have more in-depth understanding of their customers’ business plans to provide better solutions,” she says. Bluff has adapted by adding on additional engineers and customer service representatives. The company adds products each quarter; what those products are is determined by meeting the needs of channel partners and end-users. For example, craft brewing is a major growth market that will increase demand for keg-flow systems and wine bottle racks. Also, snow and ice safety laws will increase demand for the company’s Durasweeper snow removal device. Curreri expects the company to move into a larger facility in the second half of 2015. It all adds up to a modest sales increase of 3-5%.
Lift Products (Elm Grove, WI) is forecasting a 5-10% rise in sales driven by two to three new products that will be released in 2015. Curt Brzezinski, national sales manager, predicts a strong industry-wide market for lift tables and ergonomic equipment but cautions against slowdowns in factory production. Lift Products will be looking at additional office space in 2015 to accommodate growth.
In 2014, Steele Solutions (Franklin, WI) spent money on infrastructure, including new equipment, technology and staffing in 2014 to handle what turned out to be a record-breaking year in 2014. Kevin O’Neill, vice president of sales, says relationships with key distributors and intense focus on customer service will drive continued growth in 2015. “I have not talked to one other supplier who is worried about next year, unless of course, something like Ebola or Isis causes something that is not the radar right now,” O’Neill says.
After seeing sales increase by 30% in 2014, Tri Lite (Chicago, IL) expects growth to continue, albeit at a slower pace. Bob Herling, president, predicts a gain of less than 5% as he puts a strong focus on light-emitting diode (LED) products for the loading dock. “We can still capitalize on consumers’ desires to move to more durable and efficient loading dock equipment to grow our business,” Herling says. However, he is wary of a reversal in recent government policy that may result in a decrease of energy-efficient legislation that would potentially impact his business.
Berner International Corp. (New Castle, PA) is in a similar position. Michael Coscarelli, national sales manager, admits that 2014 will be tough to beat, but that doesn’t stop him from predicting 3-5% sales growth. “People are still realizing the benefits of cutting energy and going green, which is beneficial for products like ours,” he says. The company is currently rearranging its facility, which will enable it to unveil enhancements to existing products and new SKUs that will lower the cost of installation for customers.
John Ganahl, general manager, Air-Lec Industries (Madison, WI), will be investing in renewed marketing efforts to help drive a modest sales increase of 3-5%. Ganahl took over the company in 2013 and is focused on growing the business and putting more sales reps on the street. “Everyone needs doors; the question is whether they are made domestically or overseas. We are working to capitalize on our Made in America products,” Ganahl says. Sometime during 2015 the company will unveil a new safety element in its products that would help customers remove a “buying-decision roadblock.” Ganahl sees a challenge in infrastructure. “If Congress continues to ignore infrastructure as a political ploy, I have little hope for sustainable growth nationwide.”
International business, particularly in growth markets in Mexico and South America, will help UniCarriers Americas Corp. (Marengo, IL) realize sales growth of 5-7%. In addition, the company recently purchased the 125,000-square-foot building across from its existing facility in Marengo, which will allow it to relocate its testing lab and technology center and create a headquarters campus. UniCarriers Americas Corp. is also unveiling multiple new products that will help round out its product line and set the company up for aggressive future growth. “People are spending money again, and there are still old units out on the market. We can take advantage of that pent-up demand,” says James J. Radous, executive vice president, Americas. “In addition, aftermarket parts and service, and warranty work are major business channels for us through our national accounts.”
A sales elevation of 16-20% is expected at Heli Americas (Memphis, TN), thanks to an expanded distribution network in the eastern part of the United States. “We’re seeing larger purchasers buying aggressively,” says Bruce Pelynio, president. “There’s some uncertainty for smaller buyers, but that can be a boon for the rental market.” Pelynio says the company’s results will be aided by new national accounts and new equipment offerings, including a new Tier IV-compliant diesel truck and expanded options in other classes to complement existing products. The company is expanding its website to assist dealers and also is adding staff in service, aftermarket support and marketing.
Narrow Aisle (Dallas, TX) finished 2014 ahead 25% in sales volume and expects similar results again in 2015. “In addition to hard work, our recent success is due to our conversion to AC power and a broader product offering,” says President Warren Cornil. The company now offers six units, compared to only one in past years. Cornil also points to broader acceptance of articulating very narrow aisle trucks worldwide.
Bret Bruin, national strategic planning and dealer development manager for Toyota Material Handling, U.S.A., Inc., (Columbus, IN), says economic indicators point toward steady growth throughout the end of 2015, for both Toyota and the industry. “Rental companies are buying equipment at record levels, indicating that commercial and residential construction and investment in infrastructure should remain healthy in 2015. Plus, the trucking industry is operating well over capacity,” Bruin says. “These are two key customer segments that are leading indicators for other customer segments.” He cautions that the Fed’s move to raise interest rates may have an impact but still forecasts growth. “We will ramp up with additional capacity, including headcount, and we strongly encourage dealers to invest in additional sales and service coverage.”
At Douglas Battery (Winston-Salem, NC), Brian Faust, general manager, expects moderate growth of 4-5% due to added distribution channels, new products and new national accounts. “We expect things to cool off from a new battery and truck purchasing perspective, so we will remain focused on the replacement side of the business in both batteries and chargers,” Faust says. He adds that customers are pushing for data management and the ability to justify the right battery and charger for the right application. The company will invest in a plant expansion and possible additions on the sales team.
Internal combustion truck users converting to electric trucks and replacement battery business lead Bill Moriarty, general manager, EnerSys (Reading, PA), to predict 3% growth. “With improving economic conditions, there is general growing market acceptance of premium products,” he says. “There continues to be more interest among customers changing over to electric lift trucks for lower operating costs and cleaner environments.” EnerSys is expanding its headquarters and also plans to continue to grow its service centers around the country. While optimistic overall, Moriarty cautions that the European economy and a strengthening dollar may negatively influence customers’ export activity.
Mark Kelley, vice president of sales – industrial products group, Crown Battery (Fremont, OH), points to organic sales and unit growth from channel sales efforts as reasons to expect a 10-14% sales gain for the Industrial Group, which includes material handling, railroad and mining markets. The company is adding 15% more factory and warehouse space during 1Q at its Ohio manufacturing plant. “There is a belief among customers that new battery chemistries will replace current technology. However, lead-acid batteries are still the most recycled, safest and cost-effective products to support electric material handling equipment. We must continue to communicate that to the resellers and users of the equipment,” Kelley says. In addition, Crown is offering a higher-capacity battery for material handling applications and is now domestically manufacturing its line of sealed lead-acid six-volt and 12-volt deep cycle batteries for material handling equipment.
Applied Energy Solutions (Caledonia, NY) is looking at 11% growth driven by additional market share and pent-up sales demand for high-frequency chargers. “We have seen more customers request customized chargers for different material handling environments, so we continue to develop new technologies around those applications,” says Jennifer Morgan, public relations and marketing coordinator. The company will continue to invest in infrastructure, including customer relationship management and enterprise resource planning systems.
For TVH Parts Co. (Olathe, KS), the October 2014 launch of a new TVH Distribution Center in Miami, Florida; increasing product offerings for aerial work platforms through a recent acquisition; and the ongoing strong business climate will combine to increase sales by 5-10%, says Dirk von Holt, vice president. “Regardless of the up or down position in the business cycle, industrial equipment always needs maintenance and repair items,” he says. TVH will continue to invest in employee education, training and health awareness programs.
Bolzoni Auramo (Homewood, IL) will experience a 7-10% boost, due primarily to expanded fork and fork attachment sales. “The market will continue to move forward,” says Ronnie Keene, vice president of sales and marketing. “It is moving slowly but momentum seems to be building.” He is generally optimistic but cautions that instability in world markets could have an impact on the industry.
A similar warning is cast by Gary Sass, U.S. market manager, commercial specialty tires for Continental Tire the Americas (Fort Mill, SC). “Challenges include imports from overseas and conflicts around the world as we compete on a global market with our production facilities in other parts of the world,” he says, adding, “Keep a close watch on raw material prices. They have been neutral to down, and we expect a small increase in 2015.” Despite these trends, Sass is forecasting a 30% increase in volume for 2015, with increases in all segments. The gains will be driven largely by remanufactured product and forklift tires in heavy applications. As customers become more information-driven, Continental has responded with more focus on total cost of ownership and just-in-time inventory needs.
At Stellana (Lake Geneva, WI), Michael Scoon, director of sales and marketing, is gearing up for 8.5% growth based on new market opportunities developed over the past couple years, along with new quoting opportunities outside the core business. The company is targeting OEMs and aftermarket dealers by rolling out a high-traction poly tire that carries above-average loads. He expects to add manufacturing and sales personnel, and he also expects to invest in technology within the manufacturing process to help lower costs. “Customers are under more pressure to drive out unnecessary costs, which has forced us to re-evaluate all of our processes and make investments to support those changes,” Scoon says. “However, those changes have not made much of an effect to our bottom line because the savings are almost always passed along to the customer.”
Hamilton Caster & Mfg. Co. (Hamilton, OH) is preparing for 5-8% sales growth. Executive Vice President Steve Lippert bases that on new product introductions in late 2014, new outside sales representatives and a cooperative 2015 economy. In addition to bringing on factory and front office staff, the company will invest in new capital equipment to increase manufacturing capacity. “Customers need more ergonomic products that roll easily and reduce noise, and time-saving products,” he says. In particular, Hamilton salespeople are focused on maintenance-free kingpin-less casters. “We’re optimistic, but cautious because it’s always the unknowns that throw things off track. Given the low-interest world we are living in, it’s hard not to expect to see rising interest rates,” Lippert adds.
Richard Joch, national dealer manager at Konstant (Rolling Meadows, IL), sees consumer confidence and growing demand leading to 10% sales growth. “Customers are coming to us with more serious inquiries and larger projects,” Joch adds. “At the same time, they are demanding quicker turnaround times, for both quoting and manufacturing.” To accommodate, Joch is involving more current staff in sales to dealers. The company is looking to add more structural steel capability and greater manufacturing volume, while simultaneously unveiling a new seamless welder beam line.
Wildeck is gearing up for a 10% sales rise due to market growth, market share growth and new products, according to Keith Pignolet, president. To accommodate, Pignolet will add manufacturing positions during 2015. He identifies strong consumer spending, growth in housing and readily available financing as issues that will impact the material handling industry next year.
Celebrating its 25th anniversary in 2015, Unirak Storage Systems by F&F Industries (Taylor, MI) anticipates growth of 15% driven by product improvements that will both increase sales to existing distributors and add additional distributors in more competitive markets. Those product improvements will improve margins for dealers and for Unirak in 2015. “Distributors drive our business model, and allowing them to repeatedly close business with comfortable margins is key to our growth,” says Eric Gonda, vice president. The company is eyeing an expansion in the second half of the year to increase indoor Quick Ship Stock inventory combined with anticipated larger truckload order staging. A new rolling mill will give the company seven brand-new beam profiles, enable better precision in cut-to-length and production volume, and trigger the use of robotic beam end-plate welding to improve quality and throughput.
Wirecrafters LLC (Louisville, KY) expects sales growth of 7.5% based on positive forecasts from its top distributors and independent industry research. The company added staff in 2014 in production and sales to handle continued growth, and Vice President of Sales Milt Tandy says the new salespeople are bringing a different perspective to the company. “The new younger salespeople coming in to our business have a much greater need for technology. We are adding technology to everything we do in dealing with this new group of salespeople,” Tandy says. The company is also investing in new machinery on the production floor and in sales tools for distributors.
Pent-up demand and a continued drive within the supply chain to stay competitive through improved efficiencies lead Vic Kedaitis, president and CEO of Worldwide Material Handling Products (Romeoville, IL), to forecast sales growth of 10-15%. “A number of our key customers have shared their own forecasts and expectations for 2015, which increased our own confidence in investing in additional resources to support this growth,” he says. As such, the company began a major expansion of its office and warehouse space, expected to be complete in 1Q 2015, that will more than double the size of each. Kedaitis points to other positive indicators as well. “The production surge at manufacturers of storage products and other supply-chain-related industries looks to continue throughout 2015, and stable commodity prices, especially steel, will minimize the uncertainty that has plagued the industry in past years.”
At Western Pacific Storage Solutions (San Dimas, CA), a 5-6% rise in sales will be driven by demand for big distribution centers and larger systems in general. Tom Rogers, president, sees more quotes in the pipeline, a harbinger that sales activity should continue throughout at least the first part of the year. He will focus on training and improving the skills of his new people, and will likely add engineers, estimators and CAD operators. “Customers are more educated than ever, which requires us to demonstrate our value. We are implementing programs to make our customer service representatives more knowledgeable about the equipment so we will be better able to serve customers,” Rogers says.
A similar outlook comes from Nashville Wire Products (Nashville, TN), where Steve Johnson, vice president of sales, predicts a 5-6% increase based on the demand for larger shipping and order-fulfillment centers and larger projects that supplement the regular sales. “It’s not just the online shippers who are looking at larger buildings,” Johnson says. “A lot of stores are going that way and it seems like more major projects are being planned.”
Unarco Material Handling (Springfield, TN) expects consistent, positive growth driven by productivity gains and cost reductions achieved through automation. “We see positive opportunities across all industry sectors as companies become more efficient, curb costs and face increasing global competitive forces,” says Brian Boals, director of distributor sales. The company is investing in people, including both market- and geographic-focused sales positions. “We must make sure that we provide the proper tools to optimize our people’s performance and help them meet customer needs. The speed to market continues to increase and system integration becomes more important,” Boals adds.
Dave Olson, P.E., national sales and marketing manager at Ridg-U-Rak (North East, PA), predicts continued growth in logistics and distribution, particularly in the Southeast United States. Part of that is attributable to order-fulfillment and e-commerce businesses, but some will also come from the Panama Canal expansion. “I foresee an increase in oceanic trade, particularly in markets like Savannah and Charleston, which will impact warehousing and logistics-related industries like ours,” Olson says. He says the continued health of the industry will help his company realize sales growth of up to 10%.
Pricing is extremely important to customers of 3D Storage Systems Limited (Newmarket, ON, Canada), and shorter lead times and quick delivery have led to increased order intake. President Neil Dixon saw his best year since 2008 in 2014 and believes sales will continue to improve in 2015. “With GDP continuing to rise, our customer base expects to close more projects in 2015 than they did in 2014,” Dixon says. “We have seen increased quoting activity from our dealer base which translates to increased sales 6-12 months downstream.” The company will continue to expand its pushback and carton-flow product lines in 2015.
Advance Storage Products (Garden Grove, CA), anticipates a sales increase of 5-10% based on general market growth, so John Krummell, president and CEO, will invest in his team’s training and development to meet the needs of customers. “We see more demanding installation and delivery schedules, and we continue to integrate our personnel and IT capabilities to ensure that we always meet our delivery commitments,” he says. Some will monitor potential challenges such as the availability of freight carriers and possible inflation in steel and freight. A new production facility in Salt Lake City launched in late 2014/early 2015 will provide structural rack and pushback systems for the West Coast market.
A general rise in dealerships’ use of technology and integrated software systems are among the reasons why Ray Marean, president of Yosemite Software Solutions (Mariposa, CA) expects sales to increase by at least 10%. Marean also points to the company’s long-term inbound and outbound marketing plan. “In 2014, we saw dealership growth and consolidations that will continue and help our 2015 sales. Also, many organizations are looking to integrate their software solutions, and we are strategically positioning ourselves to meet these dealer needs,” he says. The company will invest in software development resources and create strategic relationships to help add services and features that improve dealers’ sales efficiency.
One of the most optimistic forecasts comes from Pierre Bertrand, equipment dealer specialist, CRM Dynamics (Mississauga, ON, Canada), who estimates 70% growth driven by additional sales and marketing initiatives that will drive more value out of existing partnerships. “More companies recognize the value of technology to drive more sales, even in the material handling industry,” Bertrand says. In response, the company is releasing standard interfaces between the leading industry enterprise resource planning systems that will allow equipment dealers to leverage their investment computer systems into real measureable increases in sales.
For eBS, a Mechdata Company (Houston, TX), the expectation is for 10-20% growth. Director of Business Development Kim Prevost attributes that to the implementation of a Cloud offering that will make access to the software easier for users, as well as more brand awareness from renewed marketing efforts. In order to diversify the company, eBS has expanded its services to other related equipment markets, such as compressors, oil and gas, and aviation. “Diversifying without losing focus on what we are best at is the key to the post-recession economy,” Prevost says. Within the material handling industry, she points to a “changing of the guard” as a critical factor as many owners and executives choose and implement succession plans.