Materials Handling: trend makers & deal breakers
PMV reports on Materials Handling Middle East and the market’s trend makers and deal breakers
Materials Handling Middle East 2015 — billed as the must-attend trade show for regional logistics, warehousing, supply chain management, freight and cargo industries — reported double-digit growth in both visitors and exhibition space.
The biennial three-day event in Dubai attracted 4,386 trade visitors from 55 countries — 30% more than its previous edition in 2013 — while the 129 exhibitors from 21 countries covered 15% more space at Dubai International Convention and Exhibition Centre.
Organisers Messe Frankfurt said the diversity, quality, and innovation of products on show was evident. The eight edition of the show provided a snapshot of the Gulf’s inherent strength in logistics, with sectors from oil and gas and automotive to manufacturing and retail all driving the region’s materials handling sector.
More than 250 brands were on show, including six of the world’s top 20 materials handling systems suppliers: Daifuku from Japan, SSI Schäfer and Kardex Remstar from Germany, Mecalux from Spain, Swiss company Swisslog, and the USA-headquartered Bastian Solutions.
Ahmed Pauwels, CEO, Messe Frankfurt Middle East, commented: “While some sectors might have slower growth presently, others are gaining momentum and picking up the slack, and it’s estimated the Gulf’s materials handling equipment market will be worth $5bn by 2020 — up from $3.8bn in 2014. This explains the impressive growth at Materials Handling.
Andrey Kras, account manager at Daifuku’s international business department, detailed: “Prior to 2014 we would receive maybe two enquiries per year from the Middle East, and this maybe grew to perhaps 10 enquires last year. In 2015, we’ve already had 20 — so the growth is huge, and these are high value leads.
“To my surprise, auto parts storage is a big market here, and whoever has a warehouse is becoming aware of ASRS; they’re putting in the back of their minds that whenever they’re ready, they will buy this, so we need to be here to capitalise on this opportunity.”
With 30 UAE companies in all and more than 30 exhibitors making their debuts, this year’s exhibition was the most comprehensive and representative in the event’s 14-year history.
The UAE powerhouses headlining the event included: the Kanoo Group, Al-Futtaim Motors, General Navigation & Commerce Compnay (GENAVCO), SPAN Trading and Al-Futtaim Auto & Machinery Company (FAMCO).
Isam Abu Naba’h, president, of GENAVCO, said the show wasn’t just about meeting clients and selling products. He commented: “With so much on offer in the market, it’s important for clients to have the right solutions — they have the right to the best services with the highest quality safety standards at a reasonable price.”
David Dronfield, regional GM for storage and handling solutions at FAMCO, added: “The more developed a territory, the more emphasis on efficient distribution operations which require more sophisticated handling equipment.”
According to Frost & Sullivan, Saudi Arabia accounted for 46% of the Gulf’s materials handling equipment revenue in 2014, followed by the UAE with a 35% share, while the other four GCC countries made up the remaining 19%.
SSI Schäfer attended with the expectation of further expanding their already considerable footprint in the market. Matthias Hoewer, GM for the Middle East and Africa said: “SSI Schäfer has been in the region for more than 20 years and can look back to hundreds of successful installations and projects. Automotive, fashion retail and F&B production are core markets next to third party logistics providers.”
On the customer side, Rene Wenger, core facilities manager at Masaood John Brown (MJB) Gas Turbine Services, was visiting the event to source warehousing equipment for a 30,000m2 planner facility in Dubai for operation by 2017.
“We’re in the planning stage of our new facility, so now was the perfect time to visit this show. It gave us a fantastic overview of what we needed, from shelving and forklifts, to floor grinders, and we’ve seen so many companies.
A new feature was a ‘Forklift Operator of the Year’ challenge — a competition where 77 contestants went head-to-head for the crown.
Returning features were the demo area, showcasing Toyota, Raymond, Jungheinrich, and Hyster machines, and the two-day ‘Warehousing and Materials Handling Conference’.
QUESTIONS & ANSWERS
What was the thinking behind introducing new elements to the event this year?
Michael Dehn (MD): Materials Handling Middle East is a show we have organised for 14 years, since 2001. The first couple of editions were hard for us, because Materials Handling is highly dedicated to a small part of a very big industry, but we are now very competent in this area. In the last two editions, we have started to get the industry a lot more involved in the show, and we have developed more interactive features this year, like the forklift challenge, and a conference is always welcome in this region, because people want to talk and hear about safety and efficiency related issues.
Why do you think attendance is up this edition compared with the 2013 event?
MD: On the first day of the show, we had 29% more people here compared to the first day of our last show. This is unusual, as we would normally expect around 8-12% more — but we have done a lot of different things this time and I am quite sure it’s these additional initiatives.
As I mentioned, Materials Handling had a difficult start back in 2001 and the perception was not always great about it. I think it’s very hard to convince people to take the time out of their regular daily schedules to attend.
Forklift drivers are crucial to most logistics businesses, and they can’t just leave their forklifts and go off to a show — so it is hard to convince their bosses to let them come, and you have to have a very strong value proposition.
It’s the same for the managers and owners, who need to be convinced they will see something worthwhile, which has been challenging in the past. Now we have reached a crucial size — the important thing at an exhibition is you don’t want to see just one manufacturer of a type of product; you want to see three, four or five so you can actually compare the products.
There is no point if there is just one — you could have just gone to the showroom of the manufacturer. We have a great selection or products so you have three days to communicate the issues you have in your warehouse and try to find the best solution with the experts.
That’s what it boils down to: if a show doesn’t offer that, people are disappointed, and this year we have a big variety of products.
How easy is it to attract new exhibitors?
MD: It used to be a lot harder. It all comes back to 2011 when we decided we would really focus more on the delivery and performance — we turned around a lot of things at that time.
Now it is easier to convince clients because we have a lot of data to show them from previous events. When the last event is good, it’s much easier to sell the next event.
Next time should be even easier. In our business it is very important to deliver or even over-deliver. We have built up a very good rapport by now with our clients.
What are the important industry trends?
MD: When you look at this industry and our location, Dubai is pretty advanced in terms of logistics and materials handling, but it is surrounded by many countries where the technical standard is lower, so we have to provide the low, medium and high end — not in terms of quality, but in terms of technology.
We have the latest automation systems and we have the regular warehouse products, but we have a log of manual materials handling products, and I think this is an area that could improve a lot of people’s work in terms of health and safety but is overlooked, in my opinion.
These are simple, inexpensive products that are super long-lasting and could also improve efficiency. Everyone wants to see the cooler, high-tech stuff we have here, but smaller operations should look at these things because they would never go for a fully automated system.
If you have a small warehouse, two or three trucks and a few people, you do not need a sophisticated automated system; in that case, there are a lot of simpler products you can look into that relieve pressure on your workers while making operations safer and faster.
George Kumi of Diesel Technic has been crowned the ‘forklift operator of the year’ in the first competition of its kind at Materials Handling Middle East.
Kumi came out on top of 77 fellow contestants from throughout the UAE, as he successfully navigated three-tonne of electric forklift machinery through narrow spaces replicating a tight warehouse environment. Mohammed Aaga from Aramex, came in second, while Imran Khan Jay, from Baqer Mohibi Enterprises, was third.
Kumi, who has been driving forklifts since 2010, said: “It feels tremendous. I didn’t think it would end like this. I knew I had done well, but I thought my friend had taken the lead from me. We had a lot of training, which played its part, but it was a lot of fun and I’m really happy.”
Commenting on the event, Michael Dehn explains: “We launched our Forklift Operator of the Year challenge this edition because while we get purchasing managers to come, we also want users to come and see the latest products.
“We have been completely blown away by the response — we had to close registration because we received 70 applications within a few days, from all the big warehouse companies. It’s an exhibition where we need to involve people a lot more and this year we have really achieved this.”
In logistics, GENAVCO is the UAE distributor for major forklift brands like Crown, JLG, Weiro, and Flexi, as well as the major stacking and shelving brand Stowe.
Asif Khan, GM at GENAVCO, notes: “Our most interesting brands are Crown and Stowe. Crown is a long time player in the forklift industry — they rank number five in the world.
“Stowe is a two-year-old partner with us. We joined hands in 2012, and we first displayed Stowe’s products in the last exhibition in 2013, and we’ve done some fantastic projects in the UAE in the last two years. One of the biggest was the IKEA distribution centre, where we installed 100,000 pallet positions of shelving.”
The project, completed in July, represents one of the largest shelving projects undertaken in a single installation in the country.
“You find DC or warehouses of this side elsewhere also, but most have grown over a period of time, perhaps ten years or so to reach a total number of 100,000 pallet position plus.
“We had 170 containers of components — so you can imagine the logistics. We had to offload around 30 containers a week for about two months. It was a very tight objective, and we only had three months to complete it.
“RHS also has 100,000 or more pallet position, but it has been here for fifteen years.”
Sharjah’s Iffco also installed double-deep operation with around 40,000 pallet positions.
GENAVCO has also achieved considerable recent success with its Crown forklifts, including a 31-truck order with Deal distribution, and a 13-truck order with the Lance Group.
“Crown also has specialty treated machines to work in –20°C,” adds Khan. “Our stock pickers then come from JLG, which has product that caters to both the construction and indoor applications, like maintenance in the aisles.
“You will find one scissor lift parked in a corner or every warehouse, because you need a narrow machine, or a diesel-powered version if you are on the construction site or roadside.
As Crown does not manufacture diesel forklifts, GENAVCO get these from Shantui.
Bulmor owns an Austrian brand of 3t to 18t two- and four-way side-loading forklifts most suitable for niche application involving the storage and movement of elongated goods like pipes sections and glass.
Russell George, MD for Bulmor Lancer, explains: “We’re a family-owned company. We manufacture about 300 sideloaders a year, with the most popular sizes being the 5t to 8t. What we’ve produced for the Middle East market, is a cost-effective truck with a base spec, because generally how they’ll operate here is that they’ll take the door off to allow for more ventilation.”
Bulmor bought the Lancer Boss side-loader business in 2001 with an existing distribution network that was very successful up until 2008.
“We’ve still sold product every year into Saudi Arabia, the UAE and Oman, primarily through existing contacts,” notes George. “Even though we had to pull back due to the crisis — like all companies — because the product is so good. We sell to all the huge steel producers throughout the world, like Tata, and locally companies like Mabani Steel and Zamil steel have always bought it — so to a certain extent it has spoken for itself. The fact that they buy it by email is further testament to the product.
“At this moment in time, we’ll probably do about 12 this year, but the plan is to grow that to about 25-30, which doesn’t sound like a lot, but when you think about the capital costs of these: they start at about $75,000 to $80,000 and I think we can do that.
“The last truck that we sold to Mabani Steel in February 2014, which is not that long ago, has already done 7,000 hours. Given that a single shift is 2,000 hours a year, that’s more than double what you’d expect.”
There is another reason for George’s strong sense of confidence in the Bulmor brand.
“With a niche product you also don’t get huge competition. In a strong year, the UK market can top 30,000 forklift trucks. Sideloaders will probably top 200-300 units,” he notes.
Bulmor’s has been actively representing its product in the Middle East here for about two years, but its biggest challenge now is finding a suitable distributor to market its product more directly and really reach out to customers.
“The hardest problem at the moment has been choosing who we distribute through. Over the last two days we have had a lot of people express their interest in being our distributor.
“We took the decision to return to this exhibition last year, and it seems like the right choice, because the customers are coming back, and we’ve had a lot of live enquires — far more than we expected. Every evening we can’t get out, because we’re too busy emailing people.”
Daifuku, the world’s largest materials handling supplier, was present to showcase its automated storage and retrieval systems (ASRS) — commonly used by global giants like Toyota, IKEA and Nike.
Andrey Kras, account manager at Daifuku’s international business department, said the company is looking to establish an office in the Middle East to cater to growing interest in the region for its automated warehousing solutions.
“The Middle East is not really ready for case handling — it is still looking at weekly rather than daily replenishment — so we are more focused on pallet solutions,” he explains. Anything that a forklift that can handle, a static crane can also handle. There is no replacement for an SRS when your throughput it high.”
The biggest barrier to the uptake of more automated solutions in the region is uncertainty among potential clients who fear the risks of the system shutting down or partially breaking.
“We do a lot of counselling for our potential clients,” explains Kras. “We explains that we always consider redundancies — for example, a part can always be kept in two locations.”
Recently, the Japanese brand secured its first recent contract in the region — to build the aircraft parts centre for the New Hamad Airport in Doha. This project is a perfect example of where the speed and accuracy will really count.
Kras comments: “It’s a huge system: about 12 aisles of these stacker cranes, with eighteen transfer vehicles — the shuttle machines.
But it wasn’t the very first job for Daifuku in the region — that honour lies elsewhere.
“We got our first job in 1975 for a frozen SRS in Tehran,” Kras explains. “I got to know of it because a year ago they sent a request for parts, but we couldn’t find the schematic because the people involved with it were already long gone from Daifuku, and we had to make something up for them. But the fact is that all 10 cranes that were installed 40 years ago are still up and running — they just needed some spare parts. I think it was pallet handling for ice cream.
“Frozen is one of the key sectors, and then its parts, food and pharmaceuticals.
“We are currently in the process of installing another two projects in the region: one in Saudi Arabia and one in Oman, and I am following up on about 20 from customers.”
The Al-Futtaim Group was out in force at the show, with large exhibition stands for both Al-Futtaim Auto & Machinery Co. (FAMCO) and Al-Futtaim Motors.
David Dronfield, regional GM for storage & handling solutions division at FAMCO, notes: “The MENA region continues to attract investment, creating growth in business demand.
“Product range selection is based very much on the criteria specific to the territory demands. Free zones are experiencing continued growth in logistical activity with an associated requirement for materials handling equipment.
“FAMCO has a complete range of materials handling equipment and final product selection is determined on assessment of all relevant criteria for an individual customer.”
FAMCO’s material handling range includes Linde forklifts, stackers and reachers — including the flagship H30D forklift truck with hydrostatic transmission and a torque converter — and it also stocks Dexion storage systems.
Al-Futtaim Motors was established in 1955 and the dedicated and exclusive distributor of Toyota, Hino trucks and Toyota Material Handling equipment in the UAE.
The Toyota Material Handling range, a value alternative, includes both Toyota and Raymond forklifts and BT warehouse equipment.
Vladimir Knezevic, MD of Al-Futtaim Motors Commercial Vehicles, notes: “Thanks to the wide range of products offered by Hino Motors and Toyota Material Handling, our customers vary from small and medium enterprises to large distribution companies, and from FMCG and logistic companies to construction and governmental institutions.”
Al-Futtaim Motors’ range of electric-, diesel- and gas-powered Toyota Material Handling machines vary in their lift capacity from 1.5t to 16t (for both in-door and out-door applications), while reaching lift heights of up to 14m.
Hino trucks meanwhile provide transport gross vehicle weight ratings from 3.5t to 40t, across various types of body application.
Al-Futtaim Motors also runs a network of 3S facilities across both Dubai and Abu Dhabi, and from early 2016 will be expanding to Sharjah.