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MHEDA Suppliers Display Restrained Optimism

By Chris Powers

Supplier ForecastOn these pages last year, MHEDA Suppliers predicted heady times and spoke of possible revenue records to be set in 2015. Many suppliers brought those expectations into fruition, as 2015 was by and large a positive one for the industry.

The outlook is still positive for 2016, although MHEDA Suppliers are a little more measured with their optimism this year. The uncertainty that inevitably comes with federal elections, an economy that remains inconsistent, lack of spending in key markets, and fluctuating petroleum costs are some of the challenges on the horizon this year. However, MHEDA Suppliers also point to customers’ continued emphasis on lean principles, pent-up demand that is starting to shake loose, focus on ergonomics and safety, and technological advancements as reasons for confidence.

Through it all, MHEDA Suppliers know that sound business principles will ultimately be the deciding factor on where the year ends up.

Bruce Dickey, vice president of sales at Narrow Aisle (Dallas, TX), shares the viewpoint of many MHEDA Suppliers looking ahead to 2016 when he says, “2016 will be what we make of it.” Dickey predicts robust sales growth of at least 20%, primarily attributed to an expanded dealer network and the continuation of product introductions that began last year. The company made staff additions in 2015 to be able to handle the increased capacity. Dickey sees specialty products being able to grow at a quicker rate than common models, and he also expects exchange rates to play a role in his company’s growth as the company looks to capitalize on relationships in Latin America. Domestic government and beverage markets also show promise. “Customers have greater emphasis on controlling costs, so products that can help them store even more in even less space can take advantage of that,” Dickey says. To help deliver that message to customers, Narrow Aisle will expand its social media and web presence.

Tri-Lite Inc. (Chicago, IL) saw substantial growth in 2015, a trend President Bob Herling expects to continue through 2016. Herling projects a sales increase of 7-10% based on international sales and revenue from new products, including LED dock lights, warning lights and strobes. To handle the extra work, Herling will look to hire an engineer and a customer service representative and will also focus on tooling and safety certifications for employees. “The U.S. economy and higher interest rates may hinder growth, but lower fuel costs may counter economic issues,” Herling says.

While economic factors will certainly play a role, SpaceGuard Products (Seymour, IN) is relying on other strategies to realize a sales increase. A new product line and sales technology, along with the launch of an online lead generation tool, will help the company expand in 2016 and beyond, according to David Murphy, creative director. “We are designing products and technology aimed to shorten the learning curve on our products so dealer salespeople can more easily move on to the next sale,” Murphy says. Continued emphasis on the data communications and health care markets should also assist growth, and SpaceGuard will bring on new manufacturing labor and add to its warehouse in late summer to accommodate the expected growth.

At Sentry Protection LLC (Lakewood, OH), the expectation is for 15% growth driven by new products, exports and expanded sales efforts. James Ryan, owner, will look to add internal operations and sales personnel to manage the growth. Inflation may play a role in 2016 to the extent that cost increases will require price adjustments. “Customers are demanding faster delivery, so we have had to refine our inventory levels and systems to match that demand,” Ryan says, adding that an investment in expanded tooling will be necessary.

GNB Industrial Power, a division of Exide Technologies (Aurora, IL), made significant capital investments to improve product quality and in new equipment to speed up production of industrial batteries. Doug Hitchcock, marketing manager, expects that those investments will help the company outpace the anticipated 4-6% growth in the industrial lift truck market. In addition, a continued focus on its flagship battery technology will complement an expansion of energy-efficient chargers and battery room networking. “As customers increasingly shift to 24/7 operations, they typically require faster opportunity charging of industrial batteries. At the same time, the lift truck manufacturers are loading trucks with more electronics, putting high power drain on the battery,” Hitchcock says. He is prepared for those challenges, and he believes another challenge may be fluctuating petroleum costs. “The market for Class I to Class III electric lift trucks may be temporarily softened by the price of petroleum,” Hitchcock says. “Some customers may second-guess that a propane-powered lift truck might be a wiser purchase, but we believe this is a short-lived, false assumption.”

Steve Lippert, executive vice president, Hamilton Caster & Mfg. Co. (Hamilton, OH), expects 2016 sales to be up modestly, 4-5%, over 2015. A decrease in the oil and gas industry that puts a damper on steel-related buying will be offset by gains in the automotive, homebuilding and aerospace industries. Plus, low interest and unemployment rates may lead to more discretionary spending in the coming year. The company added 24,000 square feet a couple of years ago and is keeping that lease for the foreseeable future. The company will introduce new products in the spring. “Customers continue to want more ergonomic-friendly products,” Lippert says. “In our world, that means easier access to caster brakes and easier rolling wheels. Also, on carts and trailers, deck height is very significant.”

Optimism abounds at JT Bates Insurance Group (Hilliard, OH), which expects growth of 20-30% based on growing recognition in the industry. Jayme Bates, vice president/partner, sees insurance as a fairly stable market even during uncertain economic times, which helps fuel the optimism. “Dealers always need insurance, so we have expanded our offerings to provide more protection,” Bates says, adding that the company recently added an extended warranty and a business policy to help cover more dealer needs. “With the increase in rental over the last several years, we’ve seen an increased need for protection for that equipment.”

A continued pattern of growth is also on the horizon for Crown Battery Mfg. Co. (Fremont, OH). The company saw 12% growth in 2015 and anticipates an additional 7-10% in 2016. Vice President of Sales Mark Kelley attributes that growth to a continuous strategy for organic growth. The company recently completed a building expansion, and will add more capacity for power utilities, some new production equipment and more staff in production, technical services and sales. Despite the positive outlook, Kelley says customers are still hesitant to spend. “It would seem that companies have money to spend, but are reluctant to do so until they absolutely have to, so it will be more of a timing issue for companies to update or upgrade their fleets of mobile equipment,” he says. Something to watch for is government regulation of the coal industry as it improves emissions.

Schaefer Systems International anticipates 2016 sales to be up by about 20% due to an increase in large warehouse and automation projects, particularly in the food and beverage industry. Klaus-Dieter Wurm, vice president and managing director, has already seen a good quantity of quality inquiries for approved projects for 2016. The company will add more staff in the applications engineering group to handle the growth. The company is also doubling the size of its corporate headquarters to accommodate the office space requirements and personnel needs of its information technology group, human resources division and marketing team. “Customers are becoming more and more interested in automation technology because it works better in cold storage freezers, is more reliable and can operate 24/7,” Wurm says. New product rollouts, including AGV technology, will be introduced to the dealer network in early 2016.

As a young company, Armadillo Tire LLC (Elm Mott, TX), is adding customers frequently. CEO Steven Smith foresees 40% growth as the company continues to build a following in the industry. Smith will hire customer service staff and outside sales reps to try to expand the company’s reach. “We plan to open more distribution centers starting on the West Coast,” he says. “We are targeting Las Vegas but do not have a target date yet; we plan to build the customer service team to support it before moving forward with building.” A new offering for cushion tire trucks will be a catalyst for growth as well.

Supplier ImageA more measured outlook comes from Dave Olson, national sales and marketing manager, Ridg-U-Rak (North East, PA). Olson foresees growth of less than 5%, primarily due to an overall global downturn in the economy and the inevitable uncertainty during an election year. Still, though, Olson expects to add positions with both a local and national concentration. “There is more focus by major retailers on online rapid order fulfillment, which requires expansion in their distribution and logistics capabilities,” Olson says.

At Morse Manufacturing Co. (East Syracuse, NY), growth is driven by new international markets. “Over the last few years, end-users have become much more aware of local, national and foreign safety standards,” President Nathan Andrews says. “Helping them comply with those standards has been important for us.” He is looking at a facility expansion or relocation in 2016, though no definitive plans are yet in place. The company will unveil a new drum handling product at MODEX. Andrews foresees slight company growth of less than 5%, which mirrors his view of the industry at large as the energy sector curbs investing and a strong dollar negatively affects international sales among large multinational companies.

A similar outlook comes from Bill Moriarty, vice president motive power, Americas for EnerSys (Reading, PA). He sees a greater customer demand for operational data and more demand for electric lift trucks over those with internal combustion engines. Capitalizing on these trends will involve an investment in people, training and staff development. Taken together, Moriarty believes it will lead to sales growth of 3%.

“Customer inventories are at lower levels, so there is pent-up demand,” says James Radous, executive vice president, Americas – Sales, UniCarriers Americas (Marengo, IL). This, combined with increased national account activity and North American dealer growth, leads him to forecast 4-7% sales growth. The company invested in a 120,000-square-foot addition to its facilities last year, which positions the company well for 2016. “We’ve taken a focused-factory approach to vertically integrate our processes and production reliability,” Radous says. “The new facility is part of our growth plan and strategy of localizing manufacturing and key components we source from suppliers.” A new light-duty walkie pallet truck is scheduled for 2016, as is a new enterprise resource planning system that will help improve efficiencies. The company will also focus on improved technology infrastructure and a new safety program.

Despite predicting a flat material handling market overall, Bob Fisher, CEO of Wesley International (Atlanta, GA), expects his company to realize 35% growth based on gaining several large accounts in 2015. He plans to add staff in sales, fabrication, assembly, engineering, procurement and materials management, and may need to outsource some work to meet the demand as customers continue their emphasis on value, productivity and lean initiatives.

The anticipation is for a 20% rise at Prescott Heald & Son (Omaha, NE), where President David Heald is banking on a new website and increased advertising to land new customers. He is starting to see sales increase as 2015 ends, and he expects the trend to continue due in part to a new stretch wrap product that is driving demand.

Kevin O’Neill, president, Steele Solutions (Franklin, WI), expects moderate growth of 1-2%, on top of a record 2015. The company is growing rapidly in both revenue and staff, so O’Neill will focus on managing that growth. “Training and development of our team will be critical,” he says. “We have a lot of new faces, and we must make sure our value proposition is not lost as we grow. The relationships that we have developed with our customers and employees remain the most important key to success in 2016.” O’Neill will add engineering and design staff along with welders and fabricators.

The strong steady growth of remanufactured products along with an improvement in the nationwide construction industry leads Gary Sass, U.S. market manager, Continental Tires America (Fort Mill, SC), to project a 15% sales gain. As customers continue the push toward more just-in-time delivery, “Customers are pushing toward more just-in-time delivery and keeping less inventory than before, so we need to focus on our fill rates,” Sass says. He expects industry consolidation to continue, which will limit customers’ choice of products and services while simultaneously improving those individual offerings. Sass says the company will maintain its social media presence, as it has become a cost-effective way to reach more customers.

Increased demand for attachments in industries such as beverage, third-party logistics, forestry, ports, and recycling leads John Regan, sales manager, Bolzoni Auramo (Homewood, IL) to project a 10-20% sales escalation in 2016. The company saw strong growth in 2015, especially in OEM markets, and Regan has confidence that trend will continue. Regan plans to add regional sales managers in the field and internal support to better serve the dealer networks. An upgrade to the commercial manufacturing area will include a new work flow line to allow for faster production on the retail side of the business. “Adopting more efficient and timely manufacturing practices, such as internal organization systems like SAP, will allow us to meet the always increasing market demand for prompt deliveries and shorter lead times on both regularly manufactured and specialty equipment,” Regan says.

After a slow first quarter, business will steadily increase throughout the year, says Milt Tandy, director of sales & marketing at Wirecrafters LLC (Louisville, KY). Tandy forecasts 5-7% revenue elevation driven by positive relationships with distributors and a focus on schools, universities and the medical industry. A new product to be released in the first quarter will also spur business. “We are excited for 2016,” he says. “We are well-positioned to handle the additional business.” To do so, the company will add personnel to the night shift.

Custom lift maker Autoquip Corporation (Guthrie, OK) will add staff and capacity to handle 10% growth, according to Louis Coleman, director of sales and marketing. He sees customers increasingly demanding products that increase productivity in specialized ways. “Every day presents an opportunity for a new product because every day our customers discover new, creative ways to use lifts,” he says.

For Advance Storage Products (Garden Grove, CA), expanded reach will lead to a sales boost of 10-15%. As customers request more product customization to meet very specific needs, the company is expanding its product line capabilities to accommodate those requests. The company will also add in-house, geographically focused sales and project management personnel.

“Distributors and their customers are demanding much more detailed information in a much shorter time frame. We are working hard to accommodate that need, by looking at our engineering and customer service processes to see where we can eliminate waste and improve upon the time we deliver information,” says Chris Mihalik, director of sales at The Caldwell Group (Rockford, IL). In response to that trend, the company will likely invest in new manufacturing equipment to make processes more efficient. Mihalik expects to slightly outperform an overall flat market. He predicts a 2-3% sales increase driven by continued strength in the construction market, potential late-year growth in the steel and primary metals industry, and continued growth of the company’s composite lifting beam line. The completion of a plant expansion to include sales and on-site training offices in the second half of the year will also contribute to the company’s growth.

Single-digit sales growth is the expectation for Dirk von Holt, vice president, TVH Parts Co. (Olathe, KS), driven by an expanded aftermarket parts offering, including telehandlers and aerial work platforms. He is wary of a slow market for parts. “Last year’s build-up demand was filled and fleets are young,” he says. Von Holt will further drive business by continuing to work on a positive customer experience via simplifying processes and customer interactions.

These MHEDA Suppliers are only a sample of the industry, but the strategies and forecasts are representative of the industry as a whole. From the lift truck segment to aftermarket to insurance to storage & handling products and more, 2016 will be a year that truly will demonstrate MHEDA Suppliers’ commitment to passion with a purpose.