Mecalux S.A.

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Mecalux S.A.

Avda Gran Via 72-78
L'Hospitalet de Llobregat
E-08902
Spain
Telephone: (+34) 93 261 69 00
Fax: (+34) 93 336 02 60
Web site: http://www.mecalux.com

Public Company
Incorporated: 1966; 1969 as Mecalux
Employees: 2,100
Sales: EUR 241.5 million ($312 million) (2004)
Stock Exchanges: Madrid
Ticker Symbol: MLX
NAIC: 337215 Showcase, Partition, Shelving, and Locker Manufacturing; 423440 Other Commercial Equipment Merchant Wholesalers

Mecalux S.A. specializes in the design and manufacturing of warehousing systems, specifically the production of shelving systems. The Spanish company is that country's market leader, claiming a share of some 50 percent of the domestic market. Spain is also Mecalux's largest market, accounting for roughly half of its sales, which topped EUR 241 million ($312 million) in 2004. In addition, Mecalux is a major player in the heavily fragmented European shelving market, claiming market leadership in France, Italy, Greece, and Portugal. Together, the European market represents 74 percent of the group's revenues. Overall, Mecalux's share of the European market is estimated at 7 percent. Farther abroad, the company also holds a leading share of the Argentinian market. The South American market as a whole accounts for 4 percent of sales, while the U.S. market generated 17 percent of the group's revenues in 2004. Mecalux supports its international presence with manufacturing facilities in a number of markets, including Mexico (Tijuana), Poland (Gliwice), the United States (Chicago), France (Toulouse), and Argentina (Buenos Aires), as well as sales and marketing subsidiaries in a number of countries. Altogether, Mecalux is present in some 50 countries. In 2004, the company acquired fellow Spanish warehousing systems group Esmena. Mecalux also operates subsidiary Logismarket, which produces an industrial directory featuring more than 20,000 logistics, storage, packaging, and industry equipment products. Mecalux has also begun a diversification into automated warehouse systems, developing robotics-based systems for the automatic handling of boxes and pallets. The company's fourth division is its publishing division, Mecalux News, which publishes a monthly Spanish-language magazine for the logistics and warehousing markets and a corresponding French-language quarterly. In 2005, the company boosted its robotics division with the acquisition of the automated storage systems division of the ThyssenKrupp group. Mecalux is listed on the Madrid Stock Exchange but remains dominated by the founding Carillo family, which holds more than 56 percent of the company's shares. Founder José Luis Carillo remains the company's president.

Origins as a Shelving Firm in the 1960s

José Luis Carrillo opened a small workshop in Barcelona in 1966, where he began producing lightweight metal shelves for the area's stores and warehouses. Demand for Carrillo's shelves grew quickly, and by 1969 Carrillo decided to industrialize production. Carrillo incorporated his company as Mecalux that year, and at the same time launched Mecalux beyond the local market. In support of this, Mecalux opened sales offices in Seville, Valencia, and Madrid. By 1972, Mecalux had expanded its sales network to include all of Spain. Backing the company's expansion was the opening of its first large-scale facility. The 3,000-square-meter building opened in 1970.

The increased capacity enabled Mecalux to extend its operations from its base in shelving production to include a wider range of warehousing functions. As part of this effort, the company began developing its own pallet racket systems and products in 1974. The success of this line helped Mecalux achieve strong growth through the 1970s. In order to meet demand, the company expanded its production and warehousing facilities, doubling the size of its main facility.

Spain's economic boom in the late 1970s and early 1980s, following the death of Francisco Franco and the development of a democratic government, provided a strong market for Mecalux's growth. The company quickly established itself as one of the country's leading shelving and warehousing systems producers. By the end of the 20th century, Mecalux had claimed the outright lead in the market, with some 50 percent of the total Spanish shelving market.

Mecalux also successfully turned toward the international market. In 1982, the company entered neighboring France, setting up a sales office in Paris. The company soon imposed itself on the French market, later becoming the market leader in that country. At the same time, Mecalux made its first expansion overseas, launching a production subsidiary in Argentina in 1984. Supported by a 6,000-square-meter facility there, Mecalux became the dominant shelving producer in that market as well.

Back at home, Mecalux moved into a new headquarters building in Barcelona in 1984. At the same time, the company expanded its product line again, now extending its operations to include turnkey warehousing systems. The company also boosted its production capacity at mid-decade, opening a new 35,000-square-meter plant in Cornella, in Barcelona, in 1986.

With this increased capacity, Mecalux was able to turn its attention toward conquering new markets. The company moved into the United Kingdom and Germany, establishing sales offices in these markets. By the beginning of the 1990s, the company had boosted its operations in France and Portugal as well. In both of these countries, Mecalux became the leading player in the shelving and warehousing systems markets.

Public Offering in the 1990s

Mecalux's continued advance into the international shelving and warehousing market encouraged it to invest nearly EUR 8 million in order to reequip and expand its main Cornella plant by 1994. The company continued opening sales offices in Portugal, then turned to Italy in 1995, opening its first sales office there.

In order to step up its expansion, Mecalux sought new capital in the mid-1990s. The company first turned to the institutional market, generating more than EUR 19 million from an investment group led by Mercapital. With this funding, the company launched construction of a new 15,0000-square-meter logistics facility in Barcelona. Mecalux also extended its operations into the publishing realm, with the debut of Mecalux News. Devoted to the logistics market, the magazine grew into a monthly with a Spanish circulation of 30,000. The company later added a French-language version, which it published as a quarterly.

Mecalux targeted the Americas for growth in the late 1990s, adding a sales branch in Chile in 1996. In 1997, the company supported its entry into the North American market with the opening of a manufacturing plant in Tijuana, Mexico. Production at the facility, which boasted some 30,000 square meters of production space, was launched in 1998.

Following completion of the Tijuana plant, Mecalux added sales offices in Tijuana and Monterrey, in Mexico, as well as in Los Angeles. The U.S. market became one of the company's fastest growing markets and by the mid-2000s represented some 17 percent of group sales.

Closer to home, the company added production capacity in France, buying a facility in Toulouse. That plant enabled the company to extend its range with light shelving products, such as for use in filing cabinets. Mecalux also extended its range to include office partitioning systems.

Mecalux continued to add sales branches, opening offices in Bologna and Padua, in Italy, and in Bordeaux, France, in 1998. The company turned to the Eastern European market the following year, with the opening of its first branches in Poland and the Czech Republic. Also in 1999, Mecalux went public, listing its shares on the Madrid and Barcelona Stock Exchanges. José Luis Carrillo, who still served as president of the company, continued to maintain a direct controlling stake of more than 56 percent, with his shareholding extended to some 70 percent through indirect holdings.

International Leader for the 21st Century

Mecalux's international network grew again in 2000 with an entry into Belgium and Austria, as well as new offices opened in Poland and the Czech Republic. The company's interest in the Eastern European market received a new boost the following year, when Mecalux launched construction of a new plant in Gliwice, Poland. The initial phase of the facility featured 25,000 square meters of production space, costing the company some EUR 28 million.

The year 2001 also marked two important milestones for the company. The first was the creation of subsidiary Logismarket, in partnership with Accenture. Logismarket served as a business-to-business catalog and portal for the international logistics community, backed by a print catalog with a European circulation of 225,000, as well as a CD-ROM edition with a circulation of 270,000, and a Web site, Logismarket.com, with a directory listing more than 2,500 companies and more than 22,000 products.

The second milestone of 2001 was Mecalux's decision to diversify into a fast-emerging warehousing category: robotics and automated systems. In support of this effort, the company created a new division, Mecalux Robotica, which began developing a line of automated warehouse systems. The division grew quickly, and by the middle of the 2000s represented more than 10 percent of company sales.

Company Perspectives:

The development, expansion and improvement of the service that a company provides for its clients relies without question on knowing how to anticipate their needs and consequently, on being able to supply products that improve their work and fulfil their expectations. Thus, Mecalux clearly recognises that new technologies play a key role in the development of our company and we devote much time and effort to them.

The company continued adding new branches, extending its reach in Spain and France in 2001, and boosting its Italian presence with the opening of a larger office and warehouse facility in Milan in 2002. In the meantime, the company prepared to accelerate its penetration of the U.S. market. In 2001, the company began construction of a massive 280,000-square-feet production facility in Melrose Park, Illinois, near Chicago. The first phase of the plant launched production in early 2002.

By then, Mecalux had already established itself as the market leader in much of southern Europe. The company then targeted the northern European market for future growth. In 2002, Mecalux launched a new drive to expand into the region, especially into the German market, supported by the opening of new sales branches in Hamburg, Stuttgart, Munich, Frankfurt, and Dusseldorf. In that year, the company also added new branches to its French subsidiary, which now boasted 12 sales centers throughout France.

The downturn of the international economy at the beginning of the 2000s put a crimp into Mecalux's growth. By 2004, however, the company was ready to launch a new growth effort. Mecalux now turned toward acquisitions for its expansion, reaching an agreement to acquire fellow Spanish company Esmena in 2004. Esmena was founded in 1956 and launched its own shelving operations in the late 1990s before being acquired by steel group Corporación Gestamp in 2000.

As Mecalux finalized the Esmena acquisition in the first half of 2005, it continued to seek acquisition opportunities. The next purchase came in July 2005, when the company reached an agreement to purchase the automated storage systems division of Germany's ThyssenKrupp group for EUR 5.25 million ($6.1 million). The acquisition complemented two aspects of Mecalux's growth strategy, boosting its northern European presence while at the same time enhancing its robotics operations. By then, Mecalux claimed a 7 percent share of Europe's fragmented warehouse systems market and ranked among the market's world leaders.

Principal Subsidiaries

Mecalux Argentina, S.A.; Mecalux Belgium, S.A.; Mecalux Brasil, Ltda.; Mecalux Chile, Ltda.; Mecalux Estantes, Lda. (Portugal); Mecalux France; Mecalux Gmbh A(Germany); Mecalux Levante, S.A.; Mecalux Mexico, S.A. De C.V.; Mecalux Milano, S.R.L. (Italy); Mecalux Servis, S.A.; Mecalux Servis, S.A.; Mecalux Sp. Z O.O. (Poland); Mecalux U.K. Ltd; Mecalux USA, Inc.; S.Gallardo, SL

Key Dates:

1966:: José Luis Carrillo begins producing light metal shelves in a workshop in Barcelona.
1969:: The company incorporates as Mecalux and launches industrial production.
1970:: A new 3,000-square-meter production plant opens.
1974:: The business expands into pallet racking systems.
1982:: The company expands internationally, opening a sales office in Paris, France.
1984:: Mecalux enters Argentina with a 6,000-square-meter production plant.
1986:: The company launches construction of new 35,000-square-meter plant in Cornellá, Barcelona.
1991:: Mecalux expands into the United Kingdom and Portugal.
1995:: The company enters Italy.
1997:: Mecalux builds a 30,000-square-meter plant in Tijuana, Mexico, and expands into the North American market.
1999:: The company goes public, listing on the Madrid and Barcelona Stock Exchanges, and enters Poland and the Czech Republic.
2001:: Mecalux debuts its b2b directory and Web site Logismarket, creates an automated warehouse systems division (Mecalux Robotica), builds a production plant in Gliwice, Poland, and completes the first phase of a 280,000-square-foot plant outside of Chicago.
2004:: Esmena, in Spain, is acquired.
2005:: Mecalux acquires the automated storage systems division of the ThyssenKrupp group.

Principal Competitors

Siemens Dematic; FKI plc; Daifuku Co., Ltd; Schaefer Holding International, GmbH; Murata Machinery Ltd; Swisslog Holding, Ab; Kardex AG; Columbus McKinnon Corporation; Vanderlande Industries BV.