Hard Times Ahead Forces Companies to Focus on Innovative Solutions
New research from industry analysts Frost & Sullivan shows a drive for efficiency and product development is continuing to keep the industrial weighing machinery market moving forward in otherwise difficult times for the industry.
The European market is close to maturity, and overall developments on an annual basis indicate slow rather than rapid growth. In such a mature industry sector, it is imperative for manufacturers to respond to the challenges by developing innovative solutions. Overall, growth has been fairly static in recent years with Frost & Sullivan valuing the market at $1.09 billion in 2000, an increase of 2.9 per cent on the previous year.
The market is faced by a series of competitive issues. Price has always been a strong factor, and fierce competition between suppliers resulted in price reductions across the market as a whole. Profit margins were negatively affected. However, product developments, especially technical advancements, in the European market are continuously undertaken as the user base demands equipment that is more precise and efficient.
The aim is to enhance performance, accuracy, speed and capacity, and investment in more advanced technology should benefit revenues as this advanced machinery is generally higher priced, positively influencing the advance of the total market.
The study also found the trend towards greater efficiency has been increasing noticeably in recent years. Costs in production lines can be reduced by deploying more efficient and accurate weighing machinery. The savings achieved by the deployment of such weighing machinery also shortens the payback period of the investment.
End-users are generally prepared to pay a higher initial cost for this more advanced weighing equipment, provided they can be convinced of the long-term benefits. It is key for manufacturers to continue to expand customer awareness of new and improved machinery currently available or soon to be released.
The European industrial weighing machinery market is served by a significant total of manufacturers. The leading competitor in the market was Mettler Toledo which has seen an advance in share to 14.2 per cent. In second was Carl Schenck with 10.6 per cent. The study also found the competitive structure has changed with a number of fresh mergers and acquisitions increasing the level of market concentration. Companies which merged or were acquired by others often gained new potential and followed different strategies to increase their market share. For example, Societa Cooperativa Bilanciai's (SCB) market share increased significantly in 2000, placing the company fourth in Europe. SCB occupies the largest share of the Italian market and has gained share by acquiring other market participants in different European countries. SCB is also anticipated to become more influential and gain in market share, primarily owing to its strategy of acquisitions.
Other significant rivals include Precia Molen, Avery Berkel, K-Tron and the Thermocentron group. Excluding Precia Molen, the market shares of these companies lie below five percent of the total market. Avery Berkel's prospect to gain a larger share of the market, especially of the UK market, greatly increased because of the enlarged commercial opportunities of the combined companies, Avery Berkel and Salter Weigh-Tronix. K-Tron is expected to gain a distinct competitive advantage via technological innovation towards the end of 2001. Thermocentron has acquired a number of manufacturers and is gradually attaining a more significant share of the European market.
Report Code: 3968, Publication Date: October 2001, Price: 5000 Euros
For more information contact: Nikki Cole nikki.cole@fs-europe.com Tel. +44 (0) 20 7343 8325
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