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Market Insight

Industrial Transformation Asia-Pacific Singapore features IIoT initiatives

December 16, 2019


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Key takeaways:

  • Digital twin, virtual commissioning, augmented reality, and virtual reality were the stars of the show
  • The Industrial Internet of Things (IIoT) is being pushed by machine builders rather than their customers
  • Public-private partnerships and collaborations within the region to drive IIoT initiatives

Our analysis:

Digital twin, virtual commissioning, augmented reality, and virtual reality were the stars at this year’s Industry Transformation Asia Pacific (ITAP) 2019 trade show, with the technology spotlight shining brightest on products and initiatives related to the IIoT.

Companies like ABB, Siemens, Schneider Electric, and Emerson were among the solution providers present at the event, held in late October in Singapore and billed as Asia Pacific’s largest trade show on Industry 4.0. Drawing 18,000 attendees from 55 countries and 350 exhibitors from 30 countries, the event showcased a range of IIoT solutions, including robotics.

Delta Electronics, a Taiwanese manufacturing company, featured its DIAcloud platform, a cloud-based IIoT staging solution for remote connectivity as well as for energy management and control in smart factory operations. For its part, Singapore-based Lionsbot unveiled an autonomous robot that can scrub, mop, vacuum, sweep, and transport cleaning equipment. The company has invested $3.7 million (Singapore $5 million), which includes government grants, in the autonomous robot project, and will be deploying 300 more of these cleaning robots around Singapore by 2020.

Overall, Asia Pacific is the world leader in IIoT implementation, but demand remains largely driven by vendors instead of by customers. Moreover, challenges such as business mindset, cost of deployment, and skillset readiness hinder its adoption, particularly in Southeast Asia. Lack of employee skills was the most commonly mentioned issue at the show, whilst a culture averse to change was a key challenge for operations and plant managers. This is an important consideration for IIoT solutions vendors when evaluating the pain points of different stakeholders and customers in IIoT implementations.

According to the latest research, Industrial IoT (IIoT) Readiness Benchmarking Report - 2019, the deployment of IIoT projects globally is still in its infancy, with over 50% either not considering an IIoT solution at all or are simply evaluating the option. Large companies were more advanced in trialing and deploying projects, with over two-thirds working on IIoT projects. Asian companies led the way across all IIoT readiness criteria and scored significantly higher than other regions. In comparison, American companies lagged Asia and Europe and were particularly weak in the areas of data collection and cybersecurity.

 

Partnerships and collaborations

Public and private partnerships, alongside government initiatives and incentives, are being undertaken in the region to help companies become more IIoT ready. In Singapore, S$38 million will be invested in research and development for hyper-personalization in manufacturing, under a public-private partnership led by the Agency for Science, Technology, and Research’s (A*Star) Advanced Remanufacturing Center. This is on top of a 70% subsidy given by the Singaporean government and is aimed at enabling manufacturers to address specific customer needs.

A new hub for advanced manufacturing is also in the works. To be known as Jurong Innovation District, it will showcase digital solutions and help lower the barrier to entry for manufacturers wishing to adopt 3D printing technologies. Included in the program will be companies like Siemens, Bosch Rexroth, Flowserve, ISDN (a Singapore-listed motion control systems specialist), A*Star, the Singapore Institute of Manufacturing Technology, and the National Metrology Center.

In a related development, Delta Electronics has signed a Memorandum of Understanding with JTC Corp – the lead government agency responsible for developing industrial infrastructure—for strategic collaboration to drive adoption of Industry 4.0. The agreement will see Delta setting up Industry 4.0 solutions and training centers to support JTC customers, upskill subject matter experts (SMEs), and provide advanced automation solutions to tackle Singapore’s manufacturing problems.

Across the border, the Malaysian government is offering an 80% subsidy plus tax exemption on robotic shipments. In Vietnam, the government recently rolled out smart manufacturing initiatives—Politburo’s Resolution No. 52-NQ/TW—while trying to move away from a labor-intensive landscape. Vietnam is also supporting local players by providing training and funding for their efforts.

In 2018, the Indonesian government launched the roadmap “Making Indonesia 4.0” to encourage added value and high-technology downstream industries to become competitive players in the world economy. The initiative identifies five priority sectors: food and drinks, automotive, textile, electronics, and chemicals. The development roadmap in Pan Brothers, one of the largest garment manufacturers in Indonesia, aligns with the government’s initiatives, through which they have embraced digital transformation and are now deploying IIoT technologies on factory floors. Anne Patricia Sutanto, the vice chief executive officer of Pan Brothers, shared the company’s digital transformation journey in a panel discussion.

China’s outsize presence 

China has always been the biggest player in the machinery production and industrial automation equipment market for Asia Pacific. The deepening economic slowdown in China, along with the shift in manufacturing from China to Southeast Asia and India, has adversely affected the once-vigorous industrial sector of the East Asian giant, with some Chinese companies even experiencing negative growth. Many domestic Chinese firms remain cautious in their plans for expansion in the coming year, preferring to focus on clearing backlogs instead. According to data from the country’s National Bureau of Statistics, the growth rate of fixed-asset investments in China declined in 2018, even though investments in the manufacturing sector continued to flourish.

In Southeast Asia, many projects that were formerly based in Singapore have shifted to Johor, Malaysia, where the manufacturing industry continues to benefit from the semiconductor and machine tool industry. In the computer numerical control (CNC) segment, companies such as Pentamaster, Vitrox, and 18 others will embark on a CNC hub joint venture. Myanmar is in the infant stages of manufacturing and still has a long way to go before it can catch up to its Southeast Asian counterparts, mainly due to Myanmar’s transition from a military to a civilian government. Many of the country’s existing heavy industries and manufacturing companies are owned by the government, and authorities are still at the stage of trying out private partnerships and attracting investors.

Although market performance in 2019 has been weak, the race is ongoing to attract investors as manufacturers seek low-cost alternatives out of China. The Manufacturing Technology analyst team will continue to monitor market developments in this region and will then travel for the Hannover Messe Show in April 2020.

 

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Manufacturing Technology
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