Escalators: an opportunity for Italian small and medium elevator companies

On 16th January, 1893, one hundred twenty-five years ago, the gears of the world’s first escalator started moving at Coney Island’s Old Iron Pier.

Since then escalators have proliferated. There are 800.000 escalators installed around the world, with 3.5 billion people passing through their steps every day. There are over 135.000 escalators in Europe.

In Italy, approximately 300 million passengers are transported every day by the more than 10.000 escalators installed.

After China, Italy is the second country in the world for number of installed equipments (including both elevators and escalators).

However, the characteristics of the Chinese Market and of Italian one are deeply different. China is an emerging market. The large investments in the building sector, that allowed the construction of hundreds of buildings higher than 200-300 meters, make China the first market for new escalators’ installations.

Italy, and Europe in general, are more mature market.

There are few new installations. A recent study conducted by ANIE found that in Italy the annual growth rate of new installations is less than 1%. The economic crisis at the beginning of the millennium, which heavily hit the building sector, has definitely contributed to this zeroing of growth.

The Italian installed base of elevators and escalators is decidedly old:

• Over 55% of equipments are older than 30 years;

• 30% of them even reach the age of 40;

• We have more than 500,000 installations that aren’t built to be “accessible” according to the D.M. 236/89.

• Over 50% of escalators are older than 20 years.

However, such an old installations base represents a huge business opportunity. Maintenance, rework and modernization of existing escalators are an urgent and ongoing need, with particular attention to interventions that require regulatory compliance. A need that customers often can’t satisfy because there is no adequate know-how on the market.

In addition to the great opportunity offered by the age of Italian escalators, the escalator market is highly attractive for small-medium lift companies for other reasons.

• Less Competition. Competition is significantly lower than in the elevator market. In fact, there is no the overcrowding that’s present in the elevator market and therefore the relative “price war”.

• Know-how scarcity. Expertise in escalators is rarer and therefore more valuable.

• Higher Revenues and Profitability. It is possible to provide a service with a profitability that’s much higher than the one guaranteed by the maintenance of elevators (with the same number of installations).

• Opportunity to work with large clients. The maintenance of the escalators can be a passpartout to start working with large customers who own both elevators and escalators (shopping centers, subways and airports) and who cannot find an all-inclusive service in other competing elevator companies. Therefore having a 360° competence can be a real competitive advantage.

• Digitalization of maintenance. Digital is offering more efficient ways of doing maintenance (“assisted reality”). For example, more qualified personnel can stay in the head office, guide a less experienced colleague from their workstation and help him carry out the necessary operations. This, on the one hand, increases the geographical coverage of the service provided by the elevators SMEs and, on the other, allows them to increase the number of installations that can be maintained and to reduce travel costs.

· New interlocutors. The world of vertical transport is finally beginning to speak also with the world of architecture and design, while until now it essentially only had a dialogue with that of construction. For the professional designer, the escalator was nothing more than a machine to transport people from one floor to another in a shopping center.

Architects’ prospective is completely different. For him the integration of escalators in urban and architectural projects will be fundamental. Respect for proportions and aesthetic standards will be highly considered

It is in this context that SMI operates.

Nowadays, SMI Italia represents a point of reference for small and medium-sized elevators companies. SMI Italia assists them, not only in the supply of new escalators, but also in the assistance, maintenance. modernization and reworking of the escalator and moving walkways.

Paolo Bellodi – Partner shareholder and technical director for SMI Scale Mobili Italia s.r.l.

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