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Position paper on LogiMAT 2015 in Stuttgart

Statement Peter Kazander, COO of EUROEXPO Messe- und Kongress-GmbH, Munich, Exhibition Director of LogiMAT

Exploiting opportunities – opening up new perspectives

With more exhibitors and exhibition space than ever before, LogiMAT 2015 now ranks number one in the world in the international intralogistics trade fair sector. As a barometer of technological and commercial trends in the industry, the most important intralogistics trade fair in Europe mirrors the current range of products and services on offer in this diverse sector. In the face of the current challenges posed by globalisation and geopolitical developments, in the 13th year of its existence the fair also reflects the opportunities and risks involved in times of upheaval and new beginning.


Under the motto “Mastering complexity – Intelligent design for the future”, from 10 to 12 February 2015 LogiMAT, the International Trade Fair for Distribution, Materials Handling and Information Flow, will open its doors for the 13th time to offer a unique view into the future of intralogistics.

For the 13th time!
In many cultures, 13 is considered not exactly a lucky number. However, we could hardly handle things in the same way as large hotels, for instance and, instead of the 13th, organise “LogiMAT 12A”. Besides, the fair’s management doesn’t think much of irrational superstition. Furthermore: a look at the bare figures proves that, when it comes to LogiMAT 2015, pessimism is simply not appropriate. For the first time, in seven of the eight halls in the exhibition centre this year more than 1,150 international exhibitors (up 10 per cent) from over 28 countries will be presenting their ranges of up-to-the-minute solutions for greater efficiency in intralogistics process chains on over 85,000 square metres of exhibition space (up 13 per cent). This is not only a record in the history of LogiMAT. Rather, with this volume of exhibitors, at the same time LogiMAT 2015 ranks number one in the world in the international intralogistics trade fair sector.

Those who must know best – the exhibitors themselves – explain the reasons for this: “At LogiMAT we have our finger on the pulse, we can experience for ourselves what really affects logistics professionals and discern the latest trends”, says Dr. Harald Göbel, SAP-EWM expert from abat AG. This makes LogiMAT “the leading trade fair for storage technology. No other fair offers a higher concentration of quality business contacts”, is the verdict of Stefan Rauscher, director and owner of Franz X. Rauscher KG. Beyond its “focus on intralogistics, with the products of its exhibitors along with the informative accompanying programme LogiMAT is increasingly offering a comprehensive range of solutions for the requirements of the entire supply chain”, explains Giovanni Prestifilippo, director of PSI Logistik GmbH.

“It has established itself not only as a regular annual industry platform but is also regarded as an information and working fair for decision-makers”, is the view of Thomas A. Fischer, Director of Sales, Marketing and Service (CSO), Still GmbH. An opinion that runs throughout all segments of the industry. “With its focus on intralogistics, LogiMAT is the most important fair that has been bringing together users, planning experts and manufacturers successfully for many years”, says Jürgen Hess, Managing Director of Miebach Consulting. “Our international Miebach colleagues will be arriving with customers who want to experience the trends at first hand at the leading international fair for upcoming investments.”

In fact, the fair’s management is able to detect an increasing international trend not only among exhibitors but also on the part of the public. “LogiMAT has definitively established itself as the leading trade fair and meeting point for networking in the intralogistics industry”, explains René Holzer, CEO of Gilgen Logistics. “Now, LogiMAT also has the reputation internationally of being the intralogistics fair for Central Europe. It’s also an important barometer of trends.” Exhibitors such as Heimo Robosch, Executive Vice President Knapp AG (“LogiMAT is acquiring ever greater importance, because it has grown from being a purely German-speaking fair into an international event.”) or Kim Fabian Schneider, Sales Manager Germany, Stöcklin Logistik AG (“For Stöcklin Logistik AG, LogiMAT is the most important logistics trade fair in Europe.”) deliver a similar-sounding verdict.


No. 1 worldwide for mechanical and plant engineering and construction

In a good many people’s eyes the number 13 also has thoroughly positive connotations. It stands for radical change and transformation, for new beginnings and growth. With these meanings it gets right to the heart of what LogiMAT – and in particular the 13th edition of LogiMAT – signifies. LogiMAT stands in general – as a working fair, information exchange and the most important industry gathering – per se for the sustainable organisation of intralogistics in business enterprises, for continuing development and growth. In this 13th year of its existence, LogiMAT also reflects above all, however, change and new beginnings.

On the one hand, this relates to the development drivers of Industry 4.0, the Internet of Things and e-commerce. Against this background, industry and service providers have to invest in modern intralogistics systems and are looking for the investment security of sustainable system solutions. You’ll find these in a unique and comprehensive showcase providing a concise overview of the products and services currently on offer in the diverse sector of intralogistics at LogiMAT 2015.

On the other hand globalisation, with its changes to intercontinental trade flows, and the current geopolitical developments of companies as well as economies demand a maximum degree of flexibility. Such times of radical change and new beginnings involve risks and opportunities in equal measure. In view of the volatility of markets, the historical ‘bon mot’ also holds good here: “Life punishes those who delay.” Only flexibility in reshaping traditional processes and logistics chains as well as in opening up new markets will ensure long-term competitiveness, offer scope for alternative action and open up new perspectives. Both for companies as well as for economies. And these perspectives have absolutely nothing to do with the ghosts of economic slowdown and an impending economic crisis that have been troubling quite a few respected leading economists and analysts over the past weeks and months.

On the contrary. Russia, for example, doesn’t even figure among Germany’s ten most important export partners. Barely more than three per cent of German exports go to Russia. Conversely, Germany’s entire natural gas and oil imports, of which around half is purchased from Russia, occupy the top spot amongst imported commodity groups. However, they make up only just under 11 per cent of the entire volume of imports. Moreover, looking back over the years, marked fluctuations in German-Russian trade involving falls of more than 35 per cent are nothing unusual.

Furthermore, the German Chambers of Industry and Commerce, for instance, are continuing to assume that in Russia there will be persistently “high demand for machinery and equipment” and that “new supplier structures” will be set up, so that “despite the current crisis” new business opportunities will arise for the German mechanical and plant engineering and construction industries and motor vehicle parts manufacturers. Even if Russia is one of the more important markets for some sectors of the German mechanical and plant engineering and construction industries: with a share of 19 per cent of total world exports, internationally German manufacturers in mechanical and plant engineering and construction and intralogistics are number 1 – and that will scarcely change regardless of partial declines in individual sectors. If we look at the economy as a whole, two thirds of the German companies active in Russia are in fact continuing to anticipate steady or, in some cases, even sharply rising revenues for 2014. Overall, the exports of the German export industry increased significantly in 2014 compared with the previous year. For the current year, the German Central Bank is predicting growth of three per cent in foreign trade and, for 2016, an increase of 4.5 per cent. The economic experts at Allianz SE even envisage growth of 4.1 per cent in German exports in 2015.


Robotics and automation in excellent shape

In my view, these facts in no way support any talk of an impending crisis. Exhibitor registrations for LogiMAT 2015 rather give rise to a very different expectation. Key segments of the intralogistics industry, largely characterised by small and medium-sized businesses and therefore representing a large number of the companies in the German mechanical and plant engineering and construction industries, are also reporting rising demand accompanied by a persistently good order position. Thus, for instance, the image processing industry in Germany posted growth of at least ten per cent in 2014. Production in the German machine tool industry remained at the high level of the previous year. With growth of seven per cent in 2014, robotics and automation currently find themselves in excellent shape. Last year, steel and metal processing in Germany moved ahead by around three per cent. For the first time since 1993, mechanical engineering companies and plant and equipment manufacturers again account for more than one million employees and, at 210 billion euros, achieved the highest sales in the industry’s history in 2014. Thanks to strong foreign demand, especially from third countries outside the eurozone, the turnover of the German electrical engineering and electronics industries will post a rise in 2014 of approximately two per cent.

Around a fifth of German mechanical engineering companies are also planning appreciable IT investments for the replacement of legacy systems, upgrade projects and first-time launches. In addition to ERP or CRM projects, this is increasingly being aimed at business intelligence systems, quotation and variant configurators as well as webshop solutions and digital spare parts catalogues. The industry association Bitkom does not see a cooling of the positive business trend in the hi-tech sector. In the service sector, in the manufacturing sector and in commerce there is above-average high demand both for IT hardware and communication technology and for software and IT services.

Added to this is the fact that for the coming years the forecasts for the growth of the German economy as a whole continue to show an increase. It is true that the “composite leading indicators” of the OECD point to a slowdown in the eurozone, but they are more optimistic for the other regions of the world.

For export-oriented companies, this means that as a result of greater flexibility in their business segments and markets they are gearing themselves up to be able to replace critical markets. Already, at the end of last year, their order books were filled in particular as a result of demand from countries outside the eurozone. “At the present time there is no expectation of a slide into recession,” was the verdict of BDI Chief Executive Officer Markus Kerber at the end of 2014. The sanctions imposed by the EU against Russia had been reflected in the German export figures, he stated, but were more than offset by increased exports to other countries. The exports of German mechanical engineering companies and plant and equipment manufacturers to the two largest foreign markets, China and the US, have already taken an upward turn once more.

The boom in Central Asia continued in 2014. Kazakhstan, Turkmenistan, Uzbekistan and Azerbaijan all benefit from their oil and natural gas exports. There, part of the receipts are being used to invest further in the expansion of the economy. New growth markets are also on the rise. Whereas growth in Russia is collapsing, for 2015 growth rates of five per cent are predicted for the developing and newly industrialising countries – for India 6.4 per cent and for China 7.1 per cent. Meanwhile, economies exhibiting strong growth and a robust business sector also include countries such as Colombia, Indonesia, Peru, the Philippines, Bangladesh and Sri Lanka. In addition, on the African continent, alongside established heavyweight South Africa and the large oil-producing country of Angola, most notably countries such as Kenya, Tanzania, Zambia and Ethiopia have experienced positive economic growth. According to studies, their business environment is at least at the level at which the BRIC countries found themselves in 2001. All of which spells new growth and sales markets for trade and industry.


Western countries are missing out on the new growth markets

Africa, the last great growth market: According to a forecast by the International Monetary Fund, in 2014 Sub-Saharan Africa was set to move ahead economically at a similarly strong pace to that of China. At the same time Ghana, with its high growth rates and political stability, is visibly taking on the role of a “Gateway to West Africa”, which is increasing its attractiveness for companies wishing to locate there. However, Germany and other western countries are in danger of missing out on these markets. Increasingly, trade and investment partners from Asia and Latin America are buying the raw materials there, positioning themselves for the future and selling their finished goods in these countries. In 2013, the German export economy transacted barely two per cent of its world sales in Africa – two fifths of these in South Africa and a further 40 per cent in the countries bordering the Mediterranean between Morocco and Egypt. This, despite the fact that Angola, for instance, would offer an attractive market for German companies from the energy, water supply and transport infrastructure sectors.

In the short-term certainly, hi-tech automation systems are unlikely to be in great demand in these countries. However, and this is what developments in China and Russia have taught us, the producing companies and service providers will want to embrace and introduce market-specific solutions, systems and equipment. This is a challenge for companies in the intralogistics industry too.

The strength of the German economy, a fact that will be emphatically demonstrated by the exhibitors at LogiMAT 2015 via their exhibits, is based essentially on the innovative capacity of its small and medium-sized businesses. When it comes to innovative strength, Germany is in fact well positioned. In a comparison of 35 industrial nations, the country has cemented sixth place. The gap to the two leading nations of Switzerland and Singapore remains marked, but in contrast the gap to the three countries of Sweden, Belgium and Finland immediately ahead of Germany is relatively small. The wealth of new ideas translated by manufacturers into products and solutions is testament to the high degree of dynamism and innovative capacity of the intralogistics industry, largely characterised by small and medium-sized businesses. Many of these innovations will be presented to the international trade audience for the first time at LogiMAT.

The most important drivers for the current product and solution developments of manufacturers and of demand in the market in Europe are the new challenges brought for instance by the ‘project of the future’ Industry 4.0 or intralogistics for multi-channel trade, in particular e-commerce. The first wave of investment, as shown by the industry figures mentioned above, has already kicked in – and it will pick up speed considerably if the potential for optimising Industry 4.0 is further sharpened and the instruments and step sequences are defined. At any rate, as a result of Industry 4.0 technologies, by 2025 industry association Bitkom and the Fraunhofer IAO expect an additional value added potential of 78 billion euros. Market researchers predict that German companies will already have spent more than 300 million euros in 2014 on digital networking alone; the figure is set to rise to 650 million euros this year. By 2020, the German economy will invest around eleven billion euros in the sector.

In my view, in this segment an economic slowdown or even an economic crisis is therefore nowhere in sight. Trade in the 21st century, cutting as it does across borders and continents, is already closely networked. Alongside it, in the shape of intralogistics we see a strong industry continuing to prosper which, with its concepts, products and ideas, will generate further growth impetus for the economy. The trade audience at LogiMAT 2015 will be able to form its own judgement in February.


Munich 10.02.2015, Reproduction free of charge. Copies of publication to: EUROEXPO GmbH, PR department, 80912 Munich, Germany.