This is HSM’s year. The Salem, Germany-based manufacturer is currently recording the highest amount of new booked orders in its history, and is forecasting a 25 percent increase in sales after securing some major orders including a large contract from Office Depot.
Sales are up across all product categories: shredders, compacting machinery (which compact down used beverage containers — UBCs), and balers. The company is expecting to boost sales to €82 million ($102 million) in 2006, more than 70 percent of which is generated in international markets.
Stefan Schraff, head of marketing at HSM’s German headquarters, spoke to OPI+ about the company’s excitement over its recent performance. He said: "We are doing very well and are very satisfied with what’s going on. We are expanding all parts of our business, particularly shredders."
Shredder demand is currently increasing worldwide — a trend that is expected to continue for the foreseeable future — and HSM is riding the wave. The company is also profiting from a backlash against Chinese products, believes Schraff. Apart from a few products in one of HSM’s lower budget lines, all of its manufacturing is done in Germany. "Our shredder business is doing great worldwide, particularly in the US," said Schraff. "And in Asia Pacific in particular, there is a trend away from Chinese products because they can be of poorer quality. In both the US and Asia Pacific there is a big trend for products made in Germany and Europe. This is a strategic selling point for us."
The Office Depot contract, which involves manufacturing a range of shredders and baling presses for the OP giant, is already having a "big impact", said Schraff, although he would not reveal exact details of the contract. The agreement has required a large-scale restructure at HSM’s manufacturing operations in Germany, which was completed ahead of time. This included an investment in computer numeric controlled (CNC) machines so that the company is able to produce much higher quantities of paper shredders than before.
The contract with Depot is HSM’s first with the big boxes. Schraff told OPI+ that similar contracts with Staples and OfficeMax are hopefully not far off.
UBC compacting machines and environmental technology are more minor sources of income for the company, but ones that are becoming increasingly significant. The compacting business is spreading rapidly in Europe and is already strong in Germany and the Benelux. On the environmental side, baling presses are also selling well. "They are very specific products, but are increasingly important for our business," said Schraff.
Next year, the country plans to step up its marketing efforts even further. And although the US, UK and continental Europe will remain HSM’s most important markets, eastern Europe and Russia are growing in importance. Schraff also admitted that there is room to grow in other markets – a few countries in Africa and South America for example – where the German manufacturer is currently not strong.
Of course, innovation is crucial in maintaining the company’s market position. But in this, Schraff admits, his company is not a leader. "We are not at the forefront of innovation," he said. "Some suppliers are more innovative in products, although we invest in innovation that lasts. Some suppliers may release new products every year, but by the following year they have already disappeared. We want to have innovation that lasts for years."
