Material Handling Equipment (MHE)
Market, Supplier, Risk and
Competitive Intelligence

Industry Outlook & Drivers

Global Market Outlook on Material Handling Equipment

• Asia Pacific (APAC) will continue to dominate the market in terms of growth prospects, which is expected to grow at 3–4% annually until 2022.
• Shift of market focus from product to service has been witnessed as an emerging trend in all the major regions to optimize buyer’s total cost of ownership (TCO).
• The global material handling equipment market size was more than $39 Bn in 2019 and is expected to cross $45 Bn by 2023. 
• The estimated CAGR of the material handling equipment industry is 3.8% by 2023. 
• The high market maturity regions include Australia, North America, and Europe while the medium and low market maturity regions include Africa, South America, and Asia. 
• When it comes to negotiation power, the supplier power is medium to high while the buyer power is low in the material handling equipment. 
• The rising number of counterfeit products sold through third-party online retailers has triggered customers to purchase MHE equipment directly from the manufacturers’ websites or physical retail stores.

Global Material Handling Equipment (MHE) Market Maturity

• Key trend, which is expected to influence MHE, would be the automation of mines. Both mining and construction customers are increasingly looking to optimize their cost due to fluctuating commodity demand.

MHE Market Overview

• Global Material handling equipment was expected to grow at a CAGR of 3-4 percent until 2019, driven by increasing demand from emerging countries such as India, Indonesia, China and other South East Asia.
• Key end users such as Coal are expected to increase by 1–2 percent by CAGR by output during 2018–2022, while metal production is expected to increase by 2–3 percent during the same period.
• Belts and accessories used for conveyors constitute around 23 percent of the $32.5 Billion global material handling equipment market share. Accessories include belts, rollers, structures, pulleys, scrapers, conveyor drives and skirting.
• Increasing mineral output growth rate coupled with expected increase in exploration activity and automation of mines could further drive the demand for mine material handling equipment.
• A few players differentiate themselves from their competitors in the MHE industry by using their own combination of raw materials to make products suitable to the mining condition.
• A fragmented mining end-user market and a consolidated supplier market reduces the MHE buyers’ bargaining power.
• Mine material handling system pricing by a manufacturer is done based on the global cost structure, and hence does not vary with the region of production.
• Profit margin for mine material handling equipment in a particular region is set by the manufacturer based on demand from the customers in that region and competition amongst suppliers.
• On-going development in new technologies is expected to cause a “huge seismic shift” in the way the MHE industry is doing business, thus improving the overall efficiency.
• The cost components that have a major impact on the material handling services industry procurement include electricity and raw materials. The raw materials account for over 70 percent of the costs while electricity accounts for more than 7 percent of the total cost. 
• The key raw materials that are required include steel and rubber. 
• The global material handling equipment market share according to equipment type is studied in the report. 
• Cranes and lifting equipment hold the largest market share at 46.5 percent. This includes industrial cranes, light crane systems, mining cranes, overhead cranes, loaders, JIB cranes, girder cranes, process cranes, heavy lifting equipment, and gantry cranes.
• The second-largest market share was for industrial trucks such as forklift trucks and electric forklifts.
• This is followed by continuous handling equipment and then racking and storage equipment which take third and fourth place according to market share and include mining hoists.

Global MHE Drivers and Constraints

Drivers

Commodity Demand/Price 

• Commodity demand is a result of the global economic situation. The average commodity price was expected to grow between 5 percent and 6 percent until 2017, with an increase in demand for MHE from the mining industry.

Automation of Mines 

• Decline in the commodity prices and fluctuations in the demand has forced the mining companies to go for automation of mines in order to improve their profit margin and cost savings which will result in increasing adoption of MHE.
• The COVID-19 crisis has pushed the demand for fully automated solutions in the manufacturing industry, with manufacturers increasing spending on automated technologies over the next couple of years. 
• Further, material handling equipment manufacturers are upgrading their conveyor and sortation system in the near future. Moreover, several medium-sized enterprises are focusing on purchasing or modernizing new equipment.

E-commerce

• As online shopping is rising rapidly than ever before, customization is at an all-time high according to industry experts. Customized systems and mining equipment are going to be on the rise and this will help push the industry to grow. 
• Even though the demand in industrial use cases saw a marginal setback in 2020, explosive growth in the e-commerce space has helped maintain the growth of the MHE industry amidst the pandemic. 
• Healthy demand for delivery and distribution of grocery products during the nationwide lockdowns has set high hopes for material handling equipment manufacturers.
• E-commerce players are focusing on stepping up their distribution networks and warehouses to assure timely delivery of MHE equipment. High demand for material handling equipment will further enable efficient storage and transfer of goods in a system.

Favorable Initiatives

• China has launched the One Belt One Route (OBOR) initiative, which is also referred to as the Belt and Road Initiative (BRI). This move to connect a network of road and rail routes from China to Europe through the Middle East will offer opportunistic growth potential. 

Constraints

Mining Industry Slowdown 

• Reduction in mineral output from mines and closure of high-cost mining operations due to the current mining industry slowdown is adversely impacting the revenue pools of material handling equipment suppliers.

Non-mining Sectors

• The shutdown of thermal power plants around the globe and sluggish demand from other sectors such as infrastructure had driven down the demand for material handling equipment in recent years.

Investments

• SMEs will struggle to invest fully as there is a high initial expenditure required for material handling equipment procurement, installation, programming, integration, and other activities related to the market. High maintenance can hamper the growth too

Market Driver-Commodity Price

• Prices of key commodities are the best indicators of mining activities and which in turn evinces the demand for HME.
• In Q4 2018, from October 2018 to November 2018, apart from iron ore and copper (which is expected to increase by an average of 5-6%) average commodity prices for the rest was expected to decrease by an average of 3-4% as compared to last quarters average.
• Demand for commodities increased tremendously as the economy recovered from the economic recession in 2009. 2010 and 2011 saw a boom in mining activity due to high demand for raw materials.
• Late 2013 and 2014 witnessed a slowdown in mining, resulting in the reduced demand for mining equipment - storage and handling.
• Again, 2014–2015 witnessed reduced demand; however, it is expected to be an uptrend in the coming years. The average commodity prices for the rest were expected to decrease by 8-9% in H1 2019 when compared to the same period in the previous year.

Why You Should Buy This Report

This MHE industry report provides information on the global and regional levels. It lists out the key performance indicators (KPI) and drivers and constraints for the material handling equipment market. It provides Porter’s five forces analysis of the global MHE industry and the SWOT analysis of major players such as Sandvik, FLSmidth, Metso, etc. Further, the material handling equipment market report lists out the best industry practices and new innovations, the cost structure breakdown, price trend and price driver analysis.