BY PETER BRADLEY, EDITORIAL DIRECTOR
CONVEYORS
materialhandlingupdate
slow turn ahead
for conveyor market
After a dismal 2009, makers of conveying systems believe a modest recovery
is under way. In the meantime, look for great deals on equipment.
THE EARLY SIGNS, AT LEAST, ARE PROMISING. AFTER A DISMAL 2009, MANUFACTURers of conveying and sortation systems are once again getting what they believe are serious
inquiries from potential customers about new installations.
As far as the manufacturers are concerned, the rebound can’t happen soon enough. Last year
was among the worst the industry has seen in some time. Through the first half of the year,
sales tracked by the Conveyor Equipment Manufacturers Association (CEMA) were down by
18. 8 percent. (Full year statistics will be announced next month.)
But equipment makers have reason for encouragement. Not only are they fielding more
requests for quotes, but buyers themselves have indicated they’re likely to increase their spending this year. In a survey conducted in mid-2009, DC VELOCITY asked readers about their plans
for spending on conveyor equipment in 2010. While 19 percent indicated they expected to cut
spending, 31 percent said they planned to spend more this year than they did in 2009.
For companies planning to buy new equipment, the timing couldn’t be better. Right now,
vendors are hungry for business. Most of the manufacturers admit pricing pressure is intense,
and with manufacturing capacity plentiful, they are anxious to book business.
The intense market competition is just one part of the story. Like their peers in many other
industries, conveyor manufacturers have worked hard to trim their own costs over the past 18
months or so. That means they can now cut a better deal and still make a profit.
William J. Casey, president and COO of SI Systems, says, “I know that we’ve done a lot of belt
tightening, so our break even is a lot lower and that should translate into better-than-average profits.” He admits, though, that competition for order fulfillment equipment business is “a dogfight.”
Larry Strayhorn, president of TGW Ermanco, agrees. “We all sense it’s a buyers’ market, and
they are taking every advantage they can to pit us all against each other,” he says.
“This is a fantastic time for people to buy,” adds Michael Johnson, senior vice
president for unit handling systems at HK Systems. “They will never get a
better deal than now.”
Cautious but hopeful
The deals may be out there, but equipment makers aren’t
expecting a flood of orders in the immediate future. Todd
Swinderman, current president of CEMA and director
and chief technology officer for Martin Engineering
in Neponset, Ill., says, “Most of our members feel
like we’re bouncing along the bottom. We don’t
expect to see a dramatic increase [in orders].”
He does see some light ahead, however.
“After seeing a sharp decline in orders in
