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Almost half of automation sales are now in Asia-Pacific

08 August, 2013

The Asia-Pacific region spends more on industrial automation products than anywhere else in the world, with 46% of global expenditure in 2012 – equivalent to $76.6bn – says a new report from IMS Research, now part of IHS.

A second report, from the analyst ARC, predicts that Asia will become the world’s largest market for PLCs from 2016.

According to IHS, the biggest end-user sector for automation in the Asia-Pacific region is the power industry, which accounts for about a fifth of capital expenditure on industrial automation products. Investment in this sector has grown significantly in recent years.

The study estimates that about 5% of the money spent on power projects in Asia-Pacific during 2012 went on automation products.

Although most of the region’s electricity comes from fossil fuels, significant growth will come in future from the renewable and nuclear energy sectors, both of which will provide major opportunities for automation component suppliers.

“Take wind turbines, for example,” says senior IHS industrial automation analyst, Andrew Robertson. “These turbines require a whole array of automation components – such as sensors, encoders, actuators, motors and drives – just for pitch and yaw control of the blades.”

ARC’s study of the global market for PLCs and PACs (programmable automation controllers) warns that, although the long-term indicators for sales in the Asia-Pacific region “point nowhere but up”, prolonged double-digit growth will not return.

But demand from China and emerging Asian economies will continue to grow at above average rates, it says. ARC expects these markets to shift towards high-end automation as local machine-builders develop more sophisticated machinery for export.

“Manufacturing renaissance, Industry 4.0, and re-shoring are trends that describe the future return of manufacturing in developed markets,” says Florian Güldner, the principal author the ARC report. “However, future development will prove whether this is wishful thinking or if manufacturing and automation will re-emerge in developed nations.”

Re-shoring – returning manufacturing previously outsourced to low-cost economies back to developed nations – has a large potential, according to ARC, especially for industries that need to react quickly to changing consumer preferences. The re-shored industries will need to make more use of automation to counteract their higher wages. ARC expects this trend to have a slight positive impact on the PLC market in the long run.

It adds that the increased level of automation in re-shored markets will demand PLCs that support information-driven manufacturing, linking the plant floor to MES and ERP layers and, in some cases, directly to the consumer. In addition, the PLCs will need to handle large amounts of data, feeding them back to higher-level systems.

ARC predicts that this will result in modular plants and factories that use “self-optimising cyber-physical systems”. As well as integrating safety and cyber-security, future PLCs will also need to integrate energy management, analytics, and other functions.

A trend that will work against reshoring is the increasing wealth in emerging economies and the rise of urban middle classes that will reduce the incentives to shift manufacturing back to developed countries, “as long as transportation costs and time are manageable”. ARC predicts that this will give a further push the PLC market in Asia.




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