GLOBAL AUTOMATED MATERIALHANDLING & STORAGESYSTEMS MARKET

Market Shares, Forecasts& Trends

2014 - 2019

mordorintelligence.com

3. MARKET OVERVIEW

3.1 Current Market Scenario

The Global Automated Material Handling and Storage Systems Market is poised to break into double

digit growth in 2014 again after a slow 6% growth in 2013. The demand is global with increasing need

for automation in a multitude of fields like pharmaceutical/healthcare, e-commerce/multichannel,

fashion, retail and cosmetics. Rising labor costs and increased affordability have recently given the

industry a boost. Today, AGVs play an important role in the design of new factories and warehouses as

more companies recognize the technology as an efficient, dependable and versatile material handling

solution

The investment trend will tend to shift from a 75-25 split between manufacturing and Warehousing &

Distribution to a 50-50 split by 2020. Simpler User interfaces will replace black box type technology. The

market will be driven forward by increasing trade volumes thereby needing delivery times to become

shorter and shorter and raising the demands on logistics.

The industry in APAC and other developing economies will be driven by the incredible rise in e-

commerce logistics. Investment in warehousing projects will lead to a higher need for automated

systems.

3.3 Factors driving the technology

3.3.2. Increasing focus on Workplace safety

The greatest asset of any company is its workforce, an injury or death to any one person in the

workforce is a direct blow on the productivity of the company and the morale of the labour.

Workplace safety is about preventing injury and illness to employees and volunteers in the workplace.

According to the UK Govt. Health and Safety statistics, the rates for fatal injuries at work are:

Great Britain – (0.71 per 100 000 workers)

France (X.X per 100 000)

Germany (0.81 per 100 000)

Italy (X.X per 100 000)

Spain (X.X per 100 000).

The rates for work – related injuries are:

UK workers – (X.X%)

Portugal (X.X%)

Bulgaria (2.4%),

Germany (X.X%)

Spain (4.2%)

Poland (X.X%)

EU-27 (5.5%)

Although these rates are considerably lower than the rest of the world. They still pose a considerable

threat to the workforce thereby drastically increasing the need for workplace safety.

Automation is the way to do this as it considerably reduces the probability of injuries or incidents in the

workplace. Automation, in the process of increasing efficiency also makes Workers move to supervisory

roles where they no longer have to perform dangerous applications in hazardous settings.

The Occupational Safety and Health Act of 1970 (OSHA) of the US Government has been promoting the

use of automation and robotics in the factory to make work safer and protecting the physical well-being

of the worker. The guidelines of the act are followed all over the world with minor modifications.

3.4 Factors restraining the market

3.4.1 High initial investment

Automated Equipment requires high capital expenditure to invest in automation (an automated system

can cost millions of dollars to design, fabricate, and install), a higher level of maintenance is needed

than with a manually operated machine, and a generally lower degree of flexibility in terms of the

possible products as compared with a manual system (even flexible automation is less flexible than

humans, the most versatile machines of all).

With the economy in flux, the materials handling equipment industry’s short term future is simply not as

rosy as hoped. The company’s willing to spend more are reducing year on year. However Companies are

cautious about hiring people so they are investing in existing facilities and making people more

productive which is the sweet spot for this business.

The bigger companies with resources might invest in new technologies but the smaller ones will sit back

and see until a proven solution is known due to their inability to take risks. This is a major hindrance to

the up and coming technologies in the field.

3.5 Current Opportunities in the Market

Automated Material Handling market presents a unique opportunity for vendors. Now, when there is a

considerable debate over the efficiency of new products, cost savings and environmental concerns,

vendors of these products are investing in research and development to make sure the new systems

adhere to the norms set by government policies or industry regulations. One of such offerings is high-

performance FCvelocity® 9SSL fuel cell stacks for use in the material handling market. This product

being manufactured by Ballard, is used in zero-emission fuel-cell powered lift trucks which delivers

economic, operational as well as environmental benefits. Growth of this market will also help allied

industries to manufacture products which are used in assembly of automated material handling

systems.

E-commerce is another such market which is yet to reach its full potential. With increasing preference of

consumers for online shopping and subsequent growth in online retail market, logistics and large

warehouses will become a necessity in future. This presents a significant opportunity for vendors of

Automated Material Handling solutions who can target this potential; high growth market segment.

Significant focus on manufacturing in developing economies like India and increasing penetration of

smartphones will are also revenue generation opportunities for the vendors of automated material

handling solutions.

3.7 Porter’s Five Forces

3.7.5 Competitive Rivalry within the Industry

The presence of large number of manufacturers of Automated Material Handling products increases the

competition between them for market dominance. The players are continuously expanding their

operations by acquisitions and focusing in research and development. Beumer, one of the market

leaders in this segment expanded its footprint by acquiring EnexcoTeknologies in 2011. Similarly

Swisslog, another market leader formed a joint venture with Heron Corp. for its light foods technology

expansion. As the market expands further with increase in economic activity in Asia Pacific, competition

will become fiercer and cost will play an important factor in determining the profitability of the players.

Competitive rivalry is high.

5. AUTOMATED GUIDED VEHICLES SYSTEMS MARKET BREAKDOWN BY

TYPE – MARKET SHARE, FORECAST

5.2 Tow Vehicles

These vehicles are the most productive form of Automated Guided Vehicles, as they can make more

loads per trip than other types of AGV’s. There are also known as “Tuggers”, because they are designed

to pull wheeled carts which can be loaded and unloaded with material automatically or manually. Some

of the benefits of these systems are: material handling is efficiently planned and predictable, increased

safety and can be operated to meet high production rates.

5.2.2 Market Share, Size and Forecast

2014 2015 2016 2017 2018 2019

Tow Vehicles Market Trends - ($ billion)

Being one of the most efficient systems, these are in huge demand. With the present market estimate of

$2.36 billion, the market for these is expected to cross $X.X billion by the end of first quarter of 2020. By

the end of 2019 these systems will contribute to XX% of the Global AGV’s market.

6. AUTOMATED STORAGE AND RETRIEVAL SYSTEMS (AS/RS) MARKET

BREAKDOWN BY TYPE – MARKET SHARE, FORECAST

6.2 Mini Load AS/RS

6.2.1 Introduction

The Mini load AS/RS are designed to handle small parts, totes, trays, and cartons. These systems are

capable of rapid acceleration and high-speed movement. These products are ideally suited for

automatic inventory storage and retrieval in high density warehouse operations and for dynamic picking

/ automated replenishment in order fulfillment systems.

6.2.2 Market Share, Size and Forecast

Mordor estimates present market for Mini load AS/RS systems to be approximately $X.X billion and is

expected to grow at a CAGR of X.X% to cross $X.X billion mark by the end of 2019.

2014 2015 2016 2017 2018 2019

Mini Load AS/RS Market Trends - ($ billion)

7. AUTOMATED MATERIAL HANDLING MARKET BY INDUSTRY – MARKET

SHARE, FORECAST

7.4 Retail

7.4.1 Introduction

With increasing competition in retail industry, cost-savings become paramount. Warehouse space,

increasing throughput and increased forklift operator productivity are all important to maximize the

efficiency and reducing the cost of handling per unit. Retail enterprises are increasingly investing

material handling solutions to maximize their process efficiency whiles saving on labor costs.

7.4.2 Market Share, Size and Forecast

Retail remains one of the biggest industry for material handling solutions across the world. Growing competition

across the industry is putting significant cost pressure on enterprises operating in these industries. It becomes

imperative of them to invest in technology to remain competitive and ready to face uncertain economic

conditions.

The market for Automated Material Handling solutions is expected to grow at a CAGR of X.X% to cross

$X.X billion by the end of 2019 from the current estimates of $X.X billion. Material Handling solutions for

retail in European market is the highest growth market. The disruptive e-commerce market is changing

the way enterprises operate. They are investing in logistics and warehouses to optimize their supply

chain and improve their business operation. Growing consumer confidence and improving economic

conditions of major countries will drive the need for investment in these solutions and making it a high

growth market

2014 2015 2016 2017 2018 2019

Automated Material Handling Market - Retail - ($ billion)

8. AUTOMATED MATERIAL HANDLING AND STORAGE SYSTEMS MARKET

BY GEOGRAPHY

8.2 Europe

8.2.2 Germany

8.2.2.1 Market Share, Size and Forecast by Automated Guided Vehicles Systems

The long recessionary period has hit the industry. Uncertainties in euro zone and excessively long

stretch of excessively low consumer-price growth has slowed the manufacturing industry and in turn

the market for Automated Material Handling. Though the measures are being taken by the European

Central Bank and German manufacturers were one of the driving factors for sustaining the euro zone

economy, a slowdown in German market can have an impact on the European market on the whole. The

manufacturing activity is expected to pick up in the last quarter of this year with an improving market

scenario across the Euro zone, the market for automated guided vehicles is expected to perform better

in future.

2014 2015 2016 2017 2018 2019

Germany Automated Guided Vehicles Systems Market - ($ billion)

Presently, Germany is a more than $X.X billion market for automated guided vehicle systems. It is

expected to become a $X.X billion market by the end of 2019 growing at a CAGR of X.X% for this period.

Germany remains the biggest market in Europe for these systems as it is the biggest economy of

Europe along with strong manufacturing industry which contributed XX% to its GDP for the period 2009-

2013 (Source: World Bank).

8.3 Asia Pacific

8.3.2 China

8.3.2.1 Market Share, Size and Forecast by Automated Guided Vehicles Systems

Manufacturing contributes to XX% of GDP to Chinese economy. Being one of the major hubs for

companies around the world, China has been one of the major manufacturing destination in Asia

Pacific. Government policies and low cost labor caused a tremendous growth in this sector. Though,

there has been some decline in recent time, it still remains a major market for Automated Guided

Vehicle systems. Investments are being planned for quality of growth, addressing environmental

concerns and reducing overcapacity. This focus will enhance investments in technologies and in turn

for Automated Guided Vehicle systems.

The market for Automated Guided Vehicles in China is expected to grow at a CAGR of X.X% to reach

$X.X billion mark by the end of 2019, from the present estimate of $X.X billion. The high growth market

is an opportunity for vendors of Automated Guided Vehicles to expand their footprint apart from big

markets like Europe and North America.

2014 2015 2016 2017 2018 2019

China Automated Guided Vehciles Market ($ billion)

9. VENDOR MARKET SHARE- AUTOMATED MATERIAL HANDLING

SYSTEMS

Vendor Market Share

Daifuku

Kardex AG

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