The China International Industry Fair (CIIF) 2018, held in Shanghai on September 19-23, attracted numerous exhibitors and global audiences. The industrial internet of things (IIoT) was the main theme of the show.
Aside from the global suppliers, there were a number of Asian manufacturers demonstrating their ambitions to improve growth and expand market share. Delta and Advantech both showcased complete solutions incorporating the latest IIoT concepts. By focusing on the entire production process, including data collection, data analysis, and data visualization, these companies are moving from simple hardware manufacturing into a solution and services-focused business model.
IIoT and the discrete machine safety market
With increasing interactions between humans and machines, safety is considered more important. The adoption of IIoT provides a good opportunity for all companies to improve their industrial safety systems and decrease safety-related costs through the reduction of accidents. Many SME’s have large costs related to health and safety compliance, as legislation and enforcement become more widespread. Cloud based safety solutions will enable users to access data daily for up-to-date insights to make decisions. The connected solutions will help to reduce safety-related incidents and minimize risks in the workplace.
Demand for intelligent safety solutions is increasing. More consumers are demanding real-time monitoring on machines as they look for new ways to improve safety. Modern production machines need to be flexible and versatile, with a focus on reducing downtime and improving efficiency. Many new products are incorporating increased connectivity, with FROFIBUS and FROFISafe used to get real-time access to diagnostic information. This increases efficiency for end-users by reducing downtime, enhancing the production quality, and making operations more responsive. This seamless integration emphasizes the better visibility into the safety system, as sensor technology combined with automation systems change the way that performance and stoppages are monitored. This is a shift from a reactive to a proactive approach to machine safety.
Chinese machine safety market
The “Made in China 2025” policy encourages advanced manufacturing, leading to an increased focus on safety. China was the largest market in Asia Pacific for machine safety products by revenue in 2016, with roughly a 40% share. In addition, the gradual improvement of technical safety standards, the continuous strengthening of personal safety awareness, and the gradual participation of the state and enterprises in market promotion has also accelerated the growth of China's machine safety market.
Industry analysis of machine safety market
In 2017, China invested heavily in the automotive industry, resulting in an increase in new projects. The development of electric vehicles significantly drove capital investment, with most of this focused on new machinery. In the first half of 2018, the growth of capital investment was slowing, but it is estimated to remain positive for the year. Thus, IHS Markit predicts that machine safety products related to automotive industry will continue to grow in 2018.
In addition, investment in automation equipment also increased in 2018, according to the National Bureau of statistics. Increased investment in the food and beverage, chemical, and pharmaceutical industries will also contribute to growth in the machine safety components market for the next three to five years.
China’s 13th Five-Year Plan is expected to drive the development of Chinese safety standards and increase the investment in safety products. The plan emphasizes the overall safety of manufacturing, with the aim of reducing accidents in the workplace through the adoption of new technologies and enforcement of regulation. The plan specifically mentions the upgrade of agricultural machinery and special equipment to satisfy the safety requirements. At the end of 2017, manufacturers in these industries have invested more in production. Simple but cost-effective safety products, such as e-stop, safety mats, and compact safety relays are most commonly adopted by these manufacturers.
Challenges and opportunities
Globally, the US tariff policies and new European emissions standards both pose big challenges for all automotive manufacturers. Tariffs imposed on imported steel and aluminum products will lead to an increase in manufacturing costs, which could increase prices and reduce demand for automobiles. Additionally, the increasing price of oil has also dampened the demand for new vehicles, leading to lower investment in the automotive industry in 2018. The global automotive industry is facing some uncertainty in the next two to three years. High-end machine safety products, such as smart cameras and laser scanners, are likely to suffer the most as a result.
Price sensitivity continues to be a big issue in less mature markets, such as China, resulting in greater demand for more basic and cheaper products or solutions. However, with intensive promotion of safety standards and with investment in developing more advanced safety technology, China is realizing the importance of machine safety. For Chinese on-site workers, safety services such as employee training and complete safety solutions are increasingly demanded by large manufacturers. IHS Markit forecasts that roughly 40% of the demand for safety services in Asia Pacific will come from China by 2021.
Overall, suppliers of machine safety components are providing more complete solutions to end-users while making their products more flexible for use in various applications. A simple guarding product is no longer enough to meet consumer safety requirements. Integrating safety, along with IIoT, into the entire automation process is the key to gaining a competitive advantage. The Chinese machine safety market provides many opportunities for suppliers of discrete machine safety components, but basic machine safety products are no longer competitive, as comprehensive safety solutions and services are becoming more sought after.