Speaking at her New Year’s Eve address, German chancellor Angela Merkel said that while the German economy was doing well, next year would “without a doubt be more difficult than this one”.
It’s a viewpoint shared by many. The country’s economy is forecast to grow between 0.5 and one per cent in 2012, much lower than the three per cent estimated in 2011. Nonetheless it is expected Germany will avoid negative growth and recession predicted earlier by economists for this winter.
“In Germany, we have good reasons to be confident,” Merkel added.
A study by Germany’s Allensbach Institute indicated 49 per cent of Germans were optimistic about the year ahead, while 17 per cent declared themselves pessimistic and 26 per cent sceptical. But these are just words. What matters is not how the year is categorised, but how it is shaped and in Germany the international exhibition industry is hard at it. The economic crisis drove the German trade fair organisers to increase their focus on expansion abroad in the hope of capitalising on higher-yield medium-term growth rates. In 2010 these organisers held 226 events, an increase of nine per cent on the number of events held in 2009. And this number is going up.
The country’s exhibition industry has strong support from its public sector, which invariably owns the venues. But each Messe (exhibition hall and accompanying business) is organised as a private company. The results of this public/private model speak for themselves. Germany is home to some of the world’s leading events including construction giant Bauma, which lays claim to being the largest single exhibition on the planet; Cebit, the largest event in the digital IT and telecoms event industry; and the leading food and beverage show Anuga. It is also home to four of the world’s six largest venues.
The seat of government
The capital, Berlin, is home to two venues, Berlin ExpoCenter City and Berlin ExpoCenter Airport, both of which are expected to make a big impact in 2012. The latter is to be the new stage for the Berlin Air Show (ILA), with the main section of the grounds covering 250,000sqm and hall and chalet areas for aircraft displays a further 50,000sqm.
Raimund Hosch, CEO of Messe Berlin believes international exhibition organisers are attracted to Berlin by the existing large international events. Messe Berlin’s established brands include IFA, ITB, InnoTrans, Fruit Logistica, International Green Week Berlin, Water Berlin and ILA, shows he claims “provide the right economic conditions for other events on the exhibition grounds, of equal importance in their own fields.”
Following far-reaching structural changes in the 1990s, Berlin is now a modern industrial location with a combination of advanced and traditional industries, characterised by the presence of several large firms as well as a significant number of small and medium-sized enterprises. One third of the entire industrial workforce is employed in the electrical sector. Other vital industries include metalworking, mechanical engineering, chemicals and the food industry. Berlin’s position as a major industrial location is augmented by a flourishing service sector.
“Together they ensure Berlin’s worldwide standing as a highly attractive market place for goods and services,” Hosch comments. “ITB features presentations from more than 180 countries, and foreign exhibitors account for up to two-thirds of the total at Messe Berlin’s events.”
Messe Berlin’s overseas development includes the expanding ITB Asia in Singapore, ‘The Trade Show for the Asian Travel Market’, and Asia Fruit Logistica in Hong Kong. Fifteen per cent more exhibitors have registered for ITB Asia 2012 and there has also been a 10 per cent rise at Asia Fruit Logistica.
“We have been able to establish a substantial foothold on the Asian market with these two trade fair brands,” claims Hosch.
Support from above
The exhibition industry in Berlin is supported both nationally and by the city’s local government through a co-ordinated effort by the federal states of Berlin and Brandenburg. These bodies have developed a strategy for promoting innovation which is divided into five clusters, focusing on the health industry, energy technology, transport, mobility, logistics, information and communication technology, media, creative industries and optics. “The intention is to present the potential offered by the capital and surrounding region, and to promote this potential with maximum effectiveness,” says Hosch. The national government’s commitment can be seen in the expansion of the network of federal highways and through comprehensive infrastructural measures aimed at enhancing the appeal of the nation’s capital.
Germany’s best-known expo export
With the second-largest exhibition grounds in the world (according to German association AUMA) and numerous overseas ventures, Messe Frankfurt enjoys perhaps Germany’s most recognisable international reputation as an organiser.
The venue itself is home to many well-known brands including one of the world’s ‘big five’ auto events the IAA Motor Show, the Frankfurt Book Fair and the meetings and business destination fair IMEX.
In autumn 2013 Messe Frankfurt becomes owner and operator of another congress centre in the adjacent Europaviertel district, a new space offering organisers rooms to accommodate 100 or 150 people to supplement the congress facilities available at its exhibition grounds.
Messe Frankfurt is one of Germany’s most accessible venues in terms of international air, rail and road transport, and also offers a high level of service expertise. Messe Frankfurt’s trade fairs, exhibitions and other events have given the company a global brand awareness. Many of the events it organises in other countries have become the second or third largest exhibition in their respective industries, topped only by flagship fairs held back in the motherland.
Messe Frankfurt president and CEO Wolfgang Marzin claims its worldwide presence is the result of consistent and logical utilisation of globalisation opportunities. “Our most important tools in this respect are a global network, comprising 28 subsidiaries, and network links to more than 50 international sales partners,” he says. “This interaction creates presence, optimum platforms and industry expertise in more than 150 of our customers’ target markets.
“Overseas activities have become increasingly important in recent years and Messe Frankfurt will be continuing to develop its overseas business in the future as well.”
One example of the consistent strategic growth of a subsidiary company can be found in Russia, where Messe Frankfurt has been present since 2001. “We have been able to double the pace of business over the last 12 months from the Moscow office,” says Marzin. “This was primarily attributable to our own exhibitions − Techtextil, Texcare and Heimtextil − as well as cooperative ventures with other international organisers including ISH Moscow and SHK Moscow, which are being held in April 2012 in cooperation with Messe Düsseldorf.”
The company’s international reputation recently helped it to get the American NAMM association onboard to jointly organise the new NAMM Musikmesse Russia and Prolight+Sound NAMM Russia. Messe Frankfurt has also taken over the organisation of Interlight Moscow, strengthening its profile as global market leader for building and lighting trade fairs.
Growing a giant
Munich is Germany’s third-largest city and the powerhouse of the country’s economy, where financial and insurance sectors as well as high-tech companies and carmakers play a key role.
The city is the home base of seven DAX companies, the German stock market index.
Messe Munich’s home portfolio is clustered under three pillars: capital goods, consumer goods and new technologies. Each segment is topped by flagship events that are leading international trade shows.
Bauma, the trade fair for construction machinery and vehicles, regularly covers 555,000sqm of exhibition space, making it the largest single trade show in the world. The event launches soon in Africa, joining sister events in India and China and firmly establishing the Bauma brand as the place to find and sell construction machinery. As well as Bauma, ISPO Munich is a leading sports business platform and every two years, Electronica is the place to be for the electronics industry.
In addition to continued implementation of the internal efficiency and growth programme, the focus for Messe Munich in the near future will be on implementing a new corporate strategy. “Targeted growth on the domestic market through strategic acquisitions and the expansion of market positions abroad are the core goals on which we will concentrate in the coming years,” says Klaus Dittrich, Chairman and CEO of Messe Munich International. “We want to increase the proportion of our international business 50 per cent by 2016.”
It’s all adding up. On the domestic market, Messe Munich achieved an EBITDA of US$49.6m, $21.6m above forecasts. Sales came in at $230.4m, overshooting the target by $14m. “To turn in such a pleasing result in a year when the programme was less strong, due to the differing cycles of the individual events, shows the full impact of the efficiency and growth programme,” says Dittrich.
Media centre
Cologne, in the west, is Germany’s media capital. In addition to the trade fair business and the media, growth sectors such as the insurance business and telecommunications are at the forefront. But Cologne also continues to be one of Europe’s leading industrial regions. For example, the city is the home of chemical and pharmaceutical firms, biotechnology and genetic engineering labs, and automotive and mechanical engineering companies.
Unlike many of its competitors, Messe Cologne receives no financial support from its stakeholders. The support is provided, for example, through Messe Cologne’s close cooperation with the Economic Development Office of the city of Cologne and the Ministry of Economics of the state of North Rhine-Westphalia.
Messe Cologne, the fifth largest venue in the world according to German association AUMA, is also working hard to leverage its business overseas. “Our business abroad is an important pillar of our corporate strategy,” says Messe Cologne CEO Gerald Bose.
Messe Cologne stages more than 30 overseas trade fairs all over the world, particularly in India and China. They include 13 different events for the food sector alone.
Many Messe Cologne events are leading trade fairs in their regions, for example the China International Hardware Show in Shanghai, Interzum Guangzhou, and Thaifex – World of Food Asia in Bangkok. Through international activities the group offers participants of its leading trade fairs in Cologne platforms in the booming markets worldwide so they can globalise their business operations. Bose claims Messe Cologne is opening the doors to worldwide business success for these companies.
“At the same time, through our business activities abroad, we are ensuring a broad international scope for our trade fairs in Cologne,” says Bose. “More than 60 per cent of the exhibitors and a third of the visitors at our trade fairs come from abroad. A close-knit network of Messe Cologne representatives in over 100 countries helps us reach these goals. By 2016 we aim to derive at least 15 per cent of our turnover from our trade fairs abroad.”
Strength in numbers
Hannover is home to the world’s largest exhibition centre, with 466,100sqm of indoor space. The venue claims its modern facilities are capable of fulfilling the needs of a world exposition such as Expo 2000 and can be configured for many different usages.
Despite the economic challenges the world currently faces, 2011 was the busiest year in Deutsche Messe’s history. It staged eight leading international trade fairs in Hannover as well as exhibitions in Australia, Brazil, China, India, Russia, Turkey and the United Arab Emirates.
“We now have fairs on six of seven continents. For years we’ve been active in the BRIC countries but our goal is to offer our customers growth opportunities throughout the world in the industries where we are the leader,” says Andreas Gruchow, board member at Deutsche Messe.
“For example, we will launch Africa Infrastructure in Johannesburg in May 2012; Industrial Automation North America will take place for the first time in Chicago in September 2012; and we are beginning our first activities in Indonesia.”
“We are also focusing on building our events business, conferences and seminars, company meetings, professional training, entertainment and sporting events.”
The government is highly aware of the key contribution SMEs make to both Germany’s export strength and the German economy in general, according to Gruchow. Key initiatives include special trade fair subsidies whereby young and innovative companies can also apply directly to BAFA, the Federal Office of Economics and Export Control.
There are of course many other German exhibition companies and venues that we haven’t had time to explore here. In every case it appears the public-private model in Germany is as successful as ever, and a messe’s stamp continues to be a mark of quality in every corner of the world.
Any comments? Email exhibitionworld@mashmedia.net
