Dematic Dematic Russia

2021: Entering the Russian market

In March 2021, the supplier of logistics solutions within the enterprise (intralogics) and warehouse automation Dematic announced its entry into the Russian market. A company with German roots dating back to the 19th century, whose global headquarters is now located in Atlanta (USA), has registered a "daughter" in Russia - Dematik LLC. Its founder is the German legal entity Dematic. The Russian office is located in the settlement of Mosrentgen in the NovDonbass administrative district of Moscow.

According to the database of legal entities Contour. Focus"," the general director of Dematik LLC was appointed, who Victor Shpakov previously headed a number of German technology companies. According to Kontur.Focus, as of March 2021, he is also listed as the general director of the Russian subsidiary Fooke, a German manufacturer of milling machines and processing centers. The company explained to TAdviser that, being a representative, Russian-German Chamber of Commerce Viktor Shpakov temporarily acts as general director of Dematik LLC.

And Dmitry Chernigov, who has been working in the KION group of companies for more than 10 years, which has included Dematic since 2016, became director of business development at Dematic's Russian office. Chernigov noted that KION has long been represented in Russia by other business areas: Still, Linde and Baoli, which are suppliers of lifting and transportation equipment. Dematic's Moscow office is located in the same building as Linde's office.

Walmart is one of the largest Dematic customers "(photo - Slickdeals.net)"

Dematic says that in Russia they offered customers all their global portfolio of products and services. Among the flagship solutions are a shuttle system for inter-rack transfer of goods in warehouses (Dematic Multishuttle), a suspension system for storing and distributing goods in bags (Dematic Pouch System). Examples of in-house products include, for example, warehouse equipment RapidStore, RapidPick picking point, Multishuttle Flex warehouse management systems, and DC Director.

And as a distributor, Dematic also offers the solutions of the Norwegian company AutoStore for creating compact robotic warehouses where goods are stored in trays, and orders are carried out through workstations, Dmitry Chernigov said.

To manage supply chain optimization solutions in real time, the Dematic iQ software platform is used, which is integrated into the existing customer landscape.

According to the annual report of the KION group, the revenue from the direction of solutions for optimization of supply chains, presented by Dematic, in 2020 amounted to 2,627 billion euros with an increase of almost 32%. Among the largest Dematic customers are Amazon, Walmart, Adidas, Coca Cola, Nestle, L'Oreal, etc. Walmart, in particular, in January 2021 announced plans to expand its fullfilm centers with the participation of Dematic as one of the partners.

According to the industry magazine Modern Materials Handling, at the end of 2019, Dematic ranked 3rd in terms of revenue among players in the segment of warehouse handling systems (Materials Handling System) after Daifuku and Schaefer Holding International^[1]. Dmitry Chernigov noted that Dematic operates in a very highly competitive market.

The Russian automation market has great potential, since now it is not yet at the level of Western Europe. But it won't take long to catch up with her. Much is expected until 2025. The fact that step by step developed in the automation of intralogistics for decades in other countries can be done from scratch in Russian warehouses, distribution, production, "says Rainer Buchmann, head of Dematic in Central Europe.

And Guido Boehm, Dematic's senior manager, regarding the choice of the moment for Dematic to enter the Russian market, explained to TAdviser that this is a logical continuation of the expansion of its business in the global market. Russia is an attractive and strategically important market in terms of geography, he said.

In addition, the logistics and intralogic markets in the country are now rapidly developing, as well as the e-commerce market is growing, Guido Boehm added. The company considers this a chance to enter Russia.

The development of the e-commerce industry was facilitated by the covid-19 pandemic. Dematic says that groceries, food and drink, pharmaceuticals and healthcare, fashion, shoes, sports equipment and accessories, entertainment electronic goods, home goods and several others are especially rapidly developing vertical segments here.

Russia was no exception. In 2020, the largest Russian retailers noted a large increase in online trading, which pushed them to expand warehouse space. So, for example, X5 Retail Group, the largest player in the online food market, opened its fourth dark store ahead of schedule in 2020.

Rainer Buchmann noted that Dematic's first steps in the Russian market were made by founding a local legal entity and opening an office here. But I must say that even before its opening, the company had already "lit up" in Russian projects. For example, Dematic supplied equipment and software for the Miratorg automated low-temperature distribution center, which opened in 2007^[2].

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