As 2017 comes to a close, we reflect on what went well, what lessons were learned and what new milestones we want to embrace going into 2018. Seven leaders with a major presence in the Southeast Asian automation scene give their thoughts on changing market conditions moving into a new year.
We can expect to see continuous economic growth in the Asia-Pacific region in year 2018, with some projects overflowing from 2017. Although the year 2017 started rather slow with some uncertainties, the market sees a pick up during the second-half of the year with the boom from the semiconductor and electronics industry. The upward trend in the electronics industry is expected to continue in the coming year. Particularly for Singapore, with the multiple initiatives from the government to push smart manufacturing, the potential for the manufacturing industry remains bright. We believe the regional market trend will be similarly exciting as more companies are moving their production facilities to the South East Asia region.
Being a technology-driven company, Beckhoff continues to develop new automation solutions. The discrete machine automation market has always been the traditional domain of Beckhoff. As the company grows, we are expanding our reach beyond the manufacturing front and into process industries. We are introducing our new products designed specifically for process technology application – the new ELX series EtherCAT Terminals and CPX series Touch Screen Displays for use in hazardous areas. In-line with the Beckhoff control philosophy, these products come with modular design and robustness, which are suitable for meeting the requirement of the process industries. Since the process industry market is generally much larger than the discrete automation market, these new products aim to open up new potential for further growth.
The company’s business in 2017 has grown very well over all continents despite recent political challenges and conflicts. This success further proves that the Beckhoff PC-based automation technology is now penetrating even deeper into the industry’s consciousness. The outlook for 2018 remains optimistic for Beckhoff. While we continue our technological drive to improve automation technology, we remain a very human and down-to-earth company. We hope to continue to build trust and long-term partnership with our customers in the coming years.
Binder has appeared at trade shows across Europe, North America, and Asia, throughout 2017. Throughout this time, all trade show appearances had a consistent and pervasive corporate design.
We foresee the economic outlook of 2018 to be good, but on the other hand lower than 2017. I predict several challenges for our company in the Asia-Pacific region, namely the impact of China and possible instability from the situation in North Korea. In regards to opportunities, we see the most significant potential for regional growth from South Korea, Vietnam, India, and Malaysia.
With the growth of the Internet of Things (IoT) and Industry 4.0, Binder has looked to expand its business along this front. In this regard, in early 2017, the company acquired Introbest, headquartered in Fellbach near Stuttgart, Germany. An electronic component and systems specialist, Introbest will work in close cooperation with Binder electronic manufacturing services (b-ems) in Vohburg, Donau. This acquisition will strengthen Binder’s offerings and further orientate its capabilities towards the Industry 4.0 trend.
Throughout 2018 we will look to grow and develop a strong presence in South Korea and India. We will release new products, especially with regards to printable electroluminescence. And as I said, we are expecting an excellent economic climate in 2018, but perhaps not as good as 2017.
Hioki’s primary focus is on the automotive, electronic components, renewable energy, and infrastructure markets. In the automotive industry, developments in EV and autonomous driving are advancing, and within the Asian market, the acceleration will centre on China, South Korea and Japan. This will drive the motor, inverter, ECU, and battery industries where Hioki measurement technology will play a very important role. With the possibility of production lines shifting to Southeast Asia, I expect business opportunities in this area to grow even further.
Within the environmental and renewable energy markets, we forecast even greater expansion in the demand for solar power in China and Southeast Asia. I am confident that Hioki will play a large role in delivering the appropriate measurement technology for the commissioning and maintenance of PV equipment. In the electronic components market, innovations in smartphone and automotive technologies will demand even greater volumes of components characterised by higher performance and increased reliability. Activities will be focused in Japan, China, and South Korea, but the assembly of final products is expected to shift to Southeast Asia, so needs from production lines will continue to increase.
Within the infrastructure market, mass railway development has advanced both in Southeast Asia and China; on the other hand, power utilities are facing stability issues. Hioki is committed to delivering solutions for construction, maintenance and troubleshooting in these areas.
In 2018, one of our key priorities is to increase touch points with our customers by expanding our sales networks in the Asia-Pacific region, Americas and Europe. Customer satisfaction is our fundamental policy, and by placing emphasis on customer engagement, we are committed to expanding our solutions worldwide.
In 2017, Hioki exhibited good performance due to the ability to expand to markets in Japan, China and South Korea, especially within the industries I mentioned earlier. Growth in the infrastructure and manufacturing industries in Southeast Asia looks to be very promising, and our business style of close customer engagement has enabled us to firmly embed our solutions into various markets. In 2018, we look forward to synchronising our developments with new movements in key markets by accelerating our solutions even further. By improving our technology, products, and service and sales networks, we anticipate delivering, even more, value to our customers, and have high hopes for the industrial expansion of the Asia-Pacific region going forward.
As the global economy keeps showing signs of strengthening, foreign trade has also exhibited a strong revival. The strengthening in global final demand, after a long period of weakness, has helped trade throughout 2017, especially for durable consumer and investment goods. 2018 will see this development continuing, though headwinds could slow growth going forward.
As the monetary policy inevitable tightens and interest rates begin to rise, the debt burden will result in increased exposure to interest rate risks.
Additional risk factors around high equity values shock to energy and commodity prices, and possible policy disruptions may also limit the trade recovery, not to forget political risk.
Though we assess global challenges on an ongoing basis, igus will continue its path of investment into new products, digitalisation of its tools and global availability of its products. We are optimistic that 2018 will reveal further business opportunities, particularly in the Asia Pacific and we will continue to align our strategy accordingly.
The goal of igus business activities is to provide our customers with the best product for their individual moving application, to reduce costs and improve the performance with tribo-polymer solutions. These high-performance plastics are the core of our activities, our developments and our strategy and we are clearly focused on this material.
Today, customers of igus have access to more than 30 freely available online tools for configuration and calculation as well as 16 mobile apps. The basis for this consists of the data obtained from the industry’s largest test laboratory, the size of which has increased to 2,750 sq m. Having invested in the digital infrastructure, igus is also able to carry out calculation and configuration, make an offer, order the product and have it delivered very quickly – all of which can be done directly on site on the customer’s premises. To this end, the field staffs have all been equipped with tablets and the company’s own engineering software.
As you can see, the clear objective in the coming years is to concretely implement the automated process that ranges from online configuration to digitally supported manufacturing for all product categories. Naturally, investments into the physical infrastructure (bigger warehouses, assembly lines, field engineers etc.) across the globe is necessary to support the increasing demand.
2017 was a challenging period. The key question was not so much how do we generate business but rather how do we manage the incoming business to satisfy elevated global demand. We have reacted with significant investment which has positioned us well for our customers in 2018. We are optimistic but also cautious. Taking business for granted would be a huge mistake. Being humble, support every opportunity and continue to build the motion plastics demand will be our ambition – opportunities are endless and we are only at the beginning of our journey.
I am cautiously optimistic about 2018. The changes in the geopolitical landscape in APAC, Americas and Europe, fast-changing technology needs and the increasing need for reducing the cost of test in the semiconductor industry and electronics offer an environment of growth for the brave. The changes in the worldview of free trade between countries are being watched cautiously, while the commercial needs of businesses, technology, and consumers continue to fuel optimism.
When it comes to moving products, services, and ideas across borders, I do not foresee an immediate threat to National Instruments’ ability in doing that, particularly since we are always involved in providing platforms that add value to local and global economies.
In fact, I am quite optimistic for NI in 2018 because in spite of all these changes, we know there will always be advances in technology, aimed at addressing and realising consumer and industry needs. For instance, in the last year or so, people have been able to monetise the Industrial Internet of Things (IIoT), providing value to companies that are beginning to look at smart machines and smart factories.
As such, I do think that 2018 is also the year where visions and plans for smart nations and cities start becoming a reality. Technologies like 5G and machine learning, to name a few, are all primed for deployment, which means that businesses will benefit. This is where opportunities are abound and NI would be able to participate and contribute in terms of testing smart devices, turning blueprints into reality by testing prototypes and then deploying them. And companies like NI do see a lot of opportunities for growth in APAC.
2018 is the year we see new and better versions of current technologies that would increase the productivity of scientists and engineers. Focus on the automated test and automated measurement will continue and allow us to satisfy customer needs in semiconductor test, especially semiconductor devices, that are related to Radio Frequency Integrated Circuit (RFIC) and the IoT. As these are used by a large number of consumer products, they all have great potential.
Other areas of innovation would be enhancing the ability to prototype and test autonomous vehicles and systems as well as to perform high-end radar testing for automotive markets. These are some of the new things coming out of NI next year.
As a company, we exceeded expectations. As for APAC, we also saw record profitability and record growth in 2017. Some areas where we saw the highest growth in 2017 were in semiconductor, electronics, telecommunications, as well as in automotive and aerospace industry.
In APAC, we also did a lot of work with regards to academia where we supported research and development (R&D) and teaching labs in response to the government’s efforts to increase R&D output and have the next generation of students ready to meet the needs of the future economy. In terms of research, due to highly flexible software and hardware architecture, we have been able to meet a wide variety of needs that researchers require.
APAC is a very important market for NI and has always been the engine of growth for us and we expect that to continue into 2018.
We expect the economic outlook for 2018 for Asia-Pacific to be more optimistic with few bright spots for our business in China, India and Indo-China markets. IoT and smart manufacturing continue to create tremendous business opportunities, especially in the industrial automation markets. Organisations today are challenged to transform due to disruptive technologies. From the proliferation of IoT to the globalisation of manufacturing, the pressure is on to achieve lower costs, increase productivity while ensuring time to market. In many markets, the challenges exist where the plant floor and the enterprise have remained separate domains.
However, with changing market dynamics that demand just-in-time manufacturing, scalability, and operational visibility, companies are now connecting these disparate networks. This will speed up IT/OT convergence as the networking infrastructure on the factory floor is upgraded, expanded, and connected to the general IT network. We think Panduit is uniquely qualified to help our customers with IT/OT convergence as we have been working with both groups for several decades.
In 2018, we are planning on localising some design and engineering of our products. This will do several things for us. It will give us the ability to respond quickly to changing market dynamics and provide a better insight into the unique requirements that may exist in the Asia Pacific market. Having design and engineering capabilities in the region means we can quickly adapt our products for those requirements and bring manufacturing closer to our customers.
2017 is the year we embark on a few digital transformation initiatives for our business and we have made very good progress in most of these projects. In 2018, we will continue to fine-tune existing projects while rolling out the rest of the projects. These digital transformation initiatives are multifaceted from enhancing customer experiences to improved operational efficiencies and exploring alternate business models.
It is difficult to answer it for a region with so many countries and sectors. However, in the coming years, we generally see the largest potential for growth in Southeast Asia. For this reason, we had the groundbreaking for our new plant in Vietnam recently – we are convinced of the growth in this region and want to be a leading supplier here. In addition to this, we are well positioned for the potential and challenges, that Industry 4.0 entails. Bearings are a central component of most machines, that are useful for the integration of sensor technology, condition monitoring, and thus the compilation of important machinery data. Down the road, we see an enormous business potential in Asia-Pacific beyond the classic bearing.
I would like to name two concrete examples for our milestones in 2018. Firstly the completion of our plant in Vietnam and its SOP at the end of 2018. With this we will establish our footprint in Southeast Asia and show that we firmly believe in the growth in this region, underlining our philosophy ‘In the Region for the Region’, which brings us closer to our customers and suppliers.
Regarding innovation, I would like to strongly emphasise our newly developed raw material ‘Varcrodur’ for metal processing, designed for the spindle bearing. Due to its high resistance to abrasion and high load capacity, this raw material can considerably improve the operating life of the main spindles in machine tools. This is a world debut, which we presented in September at the EMO Hannover.
We have achieved a significant growth in sales and are expanding faster than the market – which will also be our goal for the years to come. At the same time, it is naturally important to us to maintain the highest level of quality, innovative capacity and customer orientation. For this reason, I personally prize the presentation of the ‘Partner Award 2017’ from DMG-MORI, one of the largest metal processing companies globally, as a huge success – especially since it takes our corporate values innovation, quality and customer centricity into account.