Current market conditions are challenging worldwide, says Kurt Schmalz, managing partner of the eponymous provider of automation and vacuum handling systems. US demand continues to be a growth driver.
According to company figures, the Schmalz Group's annual revenue in 2023 was €284 million. Schmalz says that group revenue will remain at this level in 2024. "The past few years have been mixed for us, but overall positive. The recovery after the coronavirus pandemic brought us steady growth in 2022 and the first half of 2023.".
In the following six months, markets in Europe and Asia initially performed less strongly than predicted, and from autumn 2023 onwards, business in Germany also declined. "In 2024, the economic situation stagnated." The reasons were manifold.
Intellectual property rights in China?
The transformation of the automotive industry remains a challenge, compounded by new competitors from China. Schmalz explains: "Asian competitors also pose direct challenges, for example, when intellectual property rights are not enforced in their markets." He adds that there is also increased price and cost pressure due to rising purchase prices, falling sales prices, and increased labor costs. "Markets in Europe and Asia are developing mixed. In contrast, we see the USA as a growth engine for our group of companies.".
J. Schmalz
The group continues its international expansion. Since September 2023, this has included a subsidiary in Slovenia – a rapidly growing economic nation. Schmalz explains: “With our local team, we support clients in Serbia, Croatia, Bosnia and Herzegovina, Kosovo, Montenegro, and North Macedonia (...). Since August, we have also had a presence in Vietnam. This country is one of the fastest-growing economies in Asia and offers us a broad customer base in Southeast Asia. Numerous companies are establishing factories there to expand their operations and networks in Asia. Our newest branch opens up the market to the entire region for us.”.
Ambitious goals
In addition, Schmalz has established a second location in the USA with the opening of "Schmalz Flexible Gripping" in Boston in August. There, Schmalz develops and manufactures the "mGrip" finger gripper. This summer, the company acquired the product family of the US company Soft Robotics (SRI). "This was a strategic move for us into the food industry," says Schmalz. The vacuum specialists have also been present in the Czech Republic since October 2022 and are currently expanding production capacity in Poland. Schmalz explains: "With these new locations, we are gaining better access to local markets and can support our customers directly on-site with our automation solutions.".
Photos: Schmalz
Despite the challenging situation, the company has set ambitious global growth targets in the medium term. This applies particularly to the USA, "but we also expect slight sales growth in Germany." With a diversified product range, Schmalz aims to tap into new sectors and markets, for example, entering the battery handling, pharmaceutical, and food industries. This will also require targeted acquisitions. Such acquisitions will enable rapid market entry and access to technology – for example, with the mGrip finger gripper in the food industry.
“We expect a weak economy and a difficult start, at least in the first half of next year. (…) Nevertheless, we are optimistic and anticipate significant sales growth again. In exports, individual growth markets in Europe are delivering substantial growth, while the USA dominates in absolute terms.”.
His conclusion: "We have the right answers to many questions, and we continue to invest in our locations, our employees, and sustainability.".
