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The market for
contract cleaning and allied services has experienced strong and sustained
growth over the last 5 years.
Key factors
underpinning growth over the 1998-2002 period include steady underlying growth
in the UK economy, trends toward outsourcing, and the impact of EU and
government legislation.
Without doubt, the trend towards outsourcing in both the public and private
sectors has been a key driving factor and, in the public sector, there has been
a marked increase in the number of private-public sector partnership
developments over the last few years. This has been supported by the continuing
trend towards 'bundled' service contracting among larger organisations in the
public and 'Blue Chip' sectors, resulting in higher-value contracts, and
contributing to overall market growth.
Government and EU
legislation on contractors costs, e.g. Part-time working, Working Time Directive
and National Minimum Wage, have led to an increase in operating costs, a
proportion of which have been passed onto clients and, therefore, stimulated
market growth.
In some end-user
sectors, market potential for cleaning contractors is either near saturation or
has already reached maturity, e.g. 'Blue Chip' commercial, retail, leisure,
transport and central government. Growth potential in these markets, therefore,
is largely dependent upon increasing levels of investment in commercial and
industrial newbuild. In the commercial sector, office newbuild continues to grow
strongly, while the recent high levels of output are expected to be maintained
over the medium term, underpinned by a substantial number of large office and
mixed-use developments due to come on-stream during the next 2-3 years.
The other main
growth impetus will come from increased levels of outsourcing in certain key
end-use sectors, in line with the trend towards multi-service contracts. This is
expected to be strongest in the public sector, where over 50% of contracts are
still undertaken in-house. Tight budgeting requirements among local authorities
and NHS Trusts are expected to generate increasing demand for support services
specialists and facilities management contractors. Recent Government commitments
to health and education spending is likely to underpin the trend towards
outsourcing, despite recent criticism of poor performance and quality standards
in some sectors.
While growing
construction output and increasing levels of outsourcing are expected to provide
opportunities for growth, standard or 'pure' contract cleaning companies face
several threats. As barriers to the contract cleaning industry are low, there
continues to be an increase in competition from facilities management and the
larger contract catering companies in key end user sectors e.g. MoD, healthcare
and multi-site 'Blue Chip' businesses.
The trend towards
'bundling' is also supporting the switch to national and larger regional
contractors at the upper end of the market, where client organisations are
seeking better value through 'one stop' service provision. This factor, together
with a number of major acquisitions during the last three years, is clearly
leading to a further polarisation of the market, although no company has a
dominant market share. The largest five - Rentokil Initial, OCS Group, ISS UK,
MITIE and Mowlem Pall Mall - have a combined share of around 25% with the rest
of the market very fragmented.
Increasing
competition for fewer higher-value contracts at the upper end of the market,
combined with demand for higher productivity and the impact of legislation, are
generating the need for improvements in employment structure and operations.
Already, there are signs of a gradual shift towards full-time labour, perceived
as more cost-efficient than part-time employment.
The emphasis on
higher productivity is also creating demand for more productive cleaning
machines. Higher labour costs are expected to force many contractors to reduce
labour input and increase investment in machinery, especially robotic floor
cleaning equipment for buildings with large expanses of floor areas and for
multi-function cleaning machines.
The UK market for
industrial cleaning equipment and chemicals is estimated to be worth around
£820m msp, with industrial cleaning chemicals accounting for around 65% of
sales. Leading suppliers include Johnson Diversey, Ecolab and Deb etc., although
owing to high degrees of fragmentation in the product and end-user markets it is
difficult to establish specific market shares.
Sales of powered
cleaning equipment account for some 25% of the total market, at around £205m,
while the remaining 10% (£80m), is accounted for by manual cleaning materials,
although there is some overlap between domestic and commercial use.
The leading
suppliers of powered floor cleaning equipment in the UK include Numatic and
Nilfisk-Advance, the largest suppliers of branded machines in the commercial
vacuum cleaners sector, although Soteco is a key manufacturer of 'badged' vacuum
cleaners supplied under a range of brands. Alto and Karcher are the dominant
suppliers in the market for pressure washers. Tennant UK, Dowding and Plummer,
Hako Machines, Walter Broadley, Premiere Products, Johnson Diversey and Truvox
etc. are leading suppliers of larger items of hard floor care equipment i.e.
scrubber driers, large area floor polishers etc.
The market for
manual cleaning products is dominated by a handful of manufacturers, each with
strengths in differing product sectors, including Ramon Knitting, Robert Scott,
SYR, Contico Manufacturing, Addis Commercial, Vileda and Numatic International.
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Companies
Mentioned in this Report Include:
Rentokil Initial,
OCS Group, ISS UK, MITIE, Mowlem Pall Mall, Johnson Diversey, Ecolab, Deb,
Numatic, Nilfisk-Advance, Soteco, Alto, Karcher, Tennant UK, Dowding and
Plummer, Hako Machines, Walter Broadley, Premiere Products, Johnson Diversey,
Truvox, Ramon Knitting, Robert Scott, SYR, Contico Manufacturing, Addis
Commercial, Vileda, Numatic International, ISS UK, Rentokil Initial, OCS Group,
Strand, Connaught Group plc, MacLellan Group, Executive Group, Amalgamated
Cleaning Services, Ideal Cleaning Services, Sira Business, Jani King, Services,
Minister Services, ISS Mediclean, Sodexho Care Services, Carillion Services,
Initial Hospital Services, Trident Contract Services, ISS Aviation UK, Initial
Airport Services, AAS Ltd, Indigo Services, Dougland Support Services, ISS
Transport Services, Initial Transport Services, Serco, Comatec UK, Indigo
Services, Sodexho FM, Aramark, Compass, ISS Food Hygiene, Initial Foodguard,
MITIE'S Food Hygiene Division, Aramark, Sira Business Services plc, We Are
Cleaning, Barkland UK, Target Cleaning plc, Ecovert FM, Carillion Services,
Aqumen Services, Amey , Haden Business Management, MacLennan International,
Interserve, Initial Retail Services, OCS, LI Group, Barkland, Broadreach, TC
Cleaning, GBM Services, Consultant Cleaners, Insitu Cleaning, Prestige
Commercial Cleaning Services, Brompton Cleaning Services, Lawrence and Tester,
Commando, Johnson Controls, ISS Aviation UK, ISS Damage Control, ISS Facility
Services, ISS Food Hygiene, ISS Mediclean, ISS Defence, ISS Public Services,
Rentokil Initial plc, Initial Cleaning Services, Inicial Airport Services,
Initial Foodguard, Initial Industrial Services, Initial Transport Services,
Initial Retail Services, Initial Window Cleaning, Initial Hospital Services, OCS
Group , AAS Ltd, Trident Contract Services, DC Leisure, Select Facilities
Services, A Groen Group, Glenn Management Ltd, Vebego Services, Thyssen Krupp
Group, Sira Business Services, Ramoneur Cleaning & Support Services,
Lancaster Office Cleaning, Onyx Environmental Group, KGB Cleaning Services
Group, Regent Office Care, Crystal Group, Cibenze Services, Consistent Cleaning
Services, Newpin Cleaning Services, Steeles Professional Cleaning Services,
Wetton Cleaning Services, Permaclean Environmental Services, Sherwood Cleaning
Group, Cooper Cleaning Group, Dougland Support Services, Service Master UK, NIC
Hygiene Specialists, Dubl-check plc, Ecoclean, Target Cleening plc, Cannon
Hygiene, Alltec Network, Servisair, Go-Ahead Group, Inflight Cleaning Service,
ASIG, Boker Aeroclean, Aramark plc, Eurica Services, Johnson Controls IFM,
Broadreach Group, Haden Building Management, Interpump group, Hefter, Robosoft,
Ghibli, Lindhaus, Zelmer, Nilco, Bio Vac, Kerstar, Numatic, Nilfisk-Advance,
Dowding and Plummer Ltd, Karcher, Alto Cleaning, Premiere Products plc, Taski,
Truvox, Prochem, Wetrok, Stimvak, Sebo, Nilco, Lindhaus, Walter Broadley
Machines, Gansow, FCM Holdings plc, Truvox International Limited, Lincoln Floor
Ltd, Extracta Products, Earlex, The Rug Doctor, Cimex International, Hoover
Professional Division, Karcher UK, Prochem Europe Ltd, Aquira A/S, Factory Cat,
Interpump Group, Iing O Fiorentini, ITM Italia, Electrostar Schottle, Allied
Paper Products, Disposables UK, Shiloh Healthcare, Wiper Supply Services,
Proctor and Gamble Cleaning and Hygiene Products Europe, Coventry Chemicals,
GOJO Industries, Bunzl Outsourcing Services, King Distribution and Services,
Nationwide Hygiene Supplies. |
