Markets grow as spring comes in Benelux.

InAVate reports on the AV markets of the Low Countries in the wake of the third successive (and successful) Integrated Systems Europe to be hosted in the region. For three countries that are often bracketed together as “Benelux”, there are some marked differences between them.

For those on the outside it’s all too easy go with the common terminology and to lump The Netherlands, Belgium and Luxembourg into some quasi-country called “Benelux”. However, certainly in the case of the audio video integration market, this couldn’t be further from the truth. Indeed such stereotyping does a great disservice to three nations each with a character and quirks all of their own. The term Benelux is simply a geographic convenience.

Since the turn of the century, the economies of western mainland Europe have had somewhat of a hard time of things. Unemployment and a general lack of business confidence in the global markets have lead to stagnation in the economies of many countries. The Benelux states have been no exception, but since 2005 optimism has returned and things generally picked up.

Belgium is the de facto seat of government for the European Union, with the capital Brussels playing host to several major EU institutions and Belgian government institutions, as well as regional headquarters of major multinationals.

Its unemployment rate was a fairly high at 8.4% in 2005 and GDP growth was only 1.5% that same year. It’s economy is largely service based at 75% and the public sector accounts for a significant amount of national turn over largely due to the presence of EU institutions.

By contrast, the Dutch economy is far more enterprise based. It has also been performing somewhat better than its neighbour. Whilst annual economic growth between 2001 and 2005 was slow, Q2 2006 showed 2.8% and the OECD predicts growth in excess of 3% for 2007. Unemployment rates are also lower at around 3.8%.

Luxembourg whilst being considerably smaller than the other two, still plays host to some European institutions. Its economy has, in fact, outperformed that of its larger neighbours posting annual growth of 4% in 2005.

One man well placed to comment on all three markets is Rory Van Meeuwen, Managing Director of Crestron Europe. InAVate first asked him about the general state of the economy from his perspective.

“In Benelux you certainly feel that business is moving very fast over the last four months or so. However its hard to quantify the market over the region as a whole because the markets in Belgium and Holland are completely different. In Holland the AV installers are larger, structured integration companies, which have a very high level of service built in. In Belgium you have a lot of smaller companies and they group together to offer a complete solution to the end user. There’s a lot of outsourcing of expertise going on in Belgium compared to Holland. That’s not to say the market is much smaller or the projects are smaller.
“I’d say that they were near enough the same except that in Belgium the public sector is the dominant one, along with Luxembourg, whilst in The Netherlands the private sector is much greater.”

Jos Den Hartog marketing manager of Dutch integration firm Hecla agrees with Van Meeuwen’s upbeat assessment. The company approaches business via the various vertical markets and Den Hartog sees indicators in several leading him to conclude that things are on the up: “There’s a big demand for, let’s say, “spectaculars” – screen technologies combined with lighting. This is partly for entertainment purposes, but also for larger companies to show off in their corporate foyers. It’s a huge indicator that the Dutch economy is doing well. People are trying to find the technology that can make them stand out a bit more from their competition.
“For the last couple of years we have been in a bit of a dip but my expectations for 2007 are very good. It’s my hope that the Dutch spirit is out of the bottle again and we’ll be coming up with new ideas and new solutions.”

Den Hartog has also picked up on another interesting trend. He commented that an increasing number of the projects he works on have an artistic bent to them. Projects are often conceived or designed in consultation with a creative or artistic input to give the customer the mood they are looking for. This is particularly true in foyers and other corporate installations.

In Belgium and Luxembourg, Walter Geerts MD of distributor Prevost also detects a general “cranking up” of the market, as he puts it.

Whatever differences there maybe in terms of the supply chain structure across the region there is a consensus then on the economic climate. Business is good and expected to get better still. But which particular sectors are driving this?

One important one is digital signage or, to use the locally used term, narrow casting. As with many other parts of Europe, the flat panel display is a ubiquitous feature of transportation venues, retail environments and corporate or public buildings. However it’s certainly not just about plasma and LCD. Viacom Outdoor’s recent moves to create a country wide network in The Netherlands have made full use of a range of display technologies including LED screens and large scale front projection solutions.

Jos Den Hartog has been involved in other ways : “The window environment, so to speak, of banks and shops is becoming increasingly popular. We’re in an agreement with 3M for the use of their Viakuiti rear projection film. This is really interesting in the window because of its performance in direct sunlight.”

Marc Cocks, Managing Director of Dutch distributor TM Audio (part of the Ampco Flashlight Group) also sees activity in the narrow casting market. “Everyone is talking about it, but a lot of people overlook the audio side and focus on displays. The content in a lot of cases needs accompanying audio, so we’re picking up business in that space. However we also involved in selling some Christie projection systems through our sister company PIXL Vision on the larger scale stuff.”

Crestron’s Van Meeuwen identifies the education and medical markets being important for the company in 2007, based on strong relationships with other suppliers in the field to generate business. Meanwhile, both Den Hartog and Cocks highlight the corporate space as being a healthy performer on the basis of several new conference and boardroom facilities being commissioned.

Walter Geerts also believes the nature of the market is changing somewhat. Describing Prevost as a “real distributor” he believes there is an increasing onus on companies such as his to provide the client with value added services. “We pride ourselves in the expertise we can offer customers on our products. We also work with them when they put together quotations and tenders for projects. This is particularly important here because there are very few specialist AV consultants, so the consultant firms running projects are generalist civil engineering firms. They need expertise from somewhere.”

Marc Cocks echo’s this opinion from the Dutch perspective. “We are on the right side of the fence. What we have to do operating in small territories such as ours, surrounded by larger markets such as Germany or the UK is provide additional reasons for people to choose us. Large distributors often work on lower margins than us, so we have to focus on giving a lot of support to our customers and developing their plans with them, writing their tenders and helping them with quotes.”

It’s interesting to note that in the absence of many AV specialist consultants in Benelux, outside parties are taking an interest. Consulting firms from the UK and Germany are both now specifying systems in the region, partly because of their more aggressive sales approaches, but also simply due to the expertise they are able to offer.

Geerts concludes very positively: “Overall I’d say both the systems integrators and systems themselves are improving quite fast. The value of solutions is being pushed up by factors including customer expectation, legislative drivers and more features-driven buying decisions. We have been very successful using A-B comparisons in the last year.”

As the region continues to shake off the economic slumber of the previous half-decade, it can only be good news for integrators if customers become more open to higher value systems

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