The automation industry in Indonesia is growing by 10-15% per year. As Indonesia’s integration with the world economy increases, automation will play an important role in cutting costs.
- The global industrial automation market is expected to hit a value of IDR 4,935 trillion (USD 352 billion) by the end of 2024.
- The global market is anticipated to grow at a steady CAGR (2016-2024) of 6.6%.
- Industrial automation expenditure in the Asia Pacific region is valued at more than IDR 1,074 trillion (USD 76.6 billion) 46% of global investment.
- The largest buyers of automation equipment in Indonesia are from the oil and gas sector as well as the consumer goods sector.
- One of the largest automation companies, Rockwell, started its business in Indonesia in 1994.
Automation Industry in Indonesia
Industrial automation is the process of implementing a variety of different control systems to regulate and operate machinery and equipment for production facilities and plants. In addition to reducing costs, industrial automation is sought after as it helps increase productivity, efficiency, aesthetics and delivery systems in the production of automotive assembly, aviation, ship rudder and stabilization, boilers and ovens, and other machinery.
For many industries, as production standards increase, labor costs also become more expensive. This condition forces many industries to switch from manual to semi-automated or fully automated. Automation is mostly used in process and manufacturing industries such as the food and chemical industry. Automation can also be used for building systems such as hotels, office buildings and other infrastructure.
The Need for Investing in Automation
Increased investment in industrial automation research and development processes is expected to help expand the global market. Various industrial segments are adopting this system to reduce the human labor load and eliminate human error. The benefits offered by this automation process is expected to increase the global market.
The introduction of a wide range of industrial automation solutions allows manufacturing units to use the best option for their systems to get the best benefit. Extensive research and development programs carried out by classy players will provide innovative solutions to the market, which in turn will increase the automation market.
Although the industrial automation business is hampered by a lack of awareness of the benefits it offers, the emergence of various industries such as the pharmaceutical, chemical, water management, food and beverage, and electricity and electronics industries, requires automation solutions to increase production rates and market growth. Above all, growth in minimum wages and rising costs of production demonstrate the importance of automation in Indonesia.
Global Industrial Automation
The global industrial automation market is expected to increase in value to IDR 4,935 trillion (USD 352 billion) by the end of 2024. Three key factors are expected to change the face of industrial automation: energy efficiency, technological advancement and developing countries. Asia, the largest user of industrial automation products, accounts for 46% of the global market – approximately IDR 1.074 trillion (USD 76.6 billion). This is due to the growth of the manufacturing industry driven by business expansion, new factories, increased production and new investment.
With South Korean and Taiwanese companies leading the automation industry, Indonesia will become a production and manufacturing hub for the Southeast Asian region. Indonesia’s recent GDP growth and investment flows have made Indonesia a center for automation manufacturing, and many new and old producers are planning to build factories or expand their manufacturing plants to Indonesia. These industries include automotive (Toyota, Honda, General Motors, Yamaha, Daihatsu, Suzuki, VW, Tata Motors, Mitsubishi, Kia), consumer goods (Nestle, Unilever, Indofood, Frisian Flag, Santos Jaya Abadi, Heinz ABC, Johnson & Johnson) and automation technology (Omron, Del, Yokogawa, Rockwell, Schneider Electric, Siemens).
The biggest buyers of automation equipment are the oil and gas industry because Indonesia has a lot of natural resources for coal and oil. Oil and gas companies must regularly invest in integrated automation technology to become more open, given various regulations related to performance, and stricter limits on carbon emissions. In addition, fast-moving consumer goods manufacturers in Indonesia rely heavily on automation equipment due to their very large production capacities. Rockwell, one of the leading automation manufacturers in Indonesia, started its business in Indonesia in 1994. Rockwell’s clients mostly come from the oil and gas, consumer goods and industrial goods sectors.
Import of Automation Technology
Taiwan is one of the largest suppliers of automatic machines in the Indonesian market. Imports of Taiwanese automation machines to Indonesia in 2016, for example, reached IDR 7.8 trillion (USD 556 million), making Taiwan the third-largest automation machine supplier in Indonesia as it contributes 11% of its total annual imports.
Building Automation in Indonesia
Indonesia is now moving towards smart buildings, and the market for building energy management systems (BEMS) in Southeast Asia is set to grow by 12.2% annually through 2020, according to new research. According to Frost & Sullivan’s BEMS Market in Southeast Asia, Predictions until 2020, next-generation IT solutions such as cloud computing and the Internet of Things (IoT) facilitate the development of a new class of BEMS that offers comfort and optimal energy performance. These systems promise real benefits for commercial and industrial buildings, as they can facilitate remote monitoring, energy efficiency, and system optimization. Most market players, even those outside the traditional building automation market, have started introducing cloud-based BEMS platforms and services.
Addressing the needs of industrial, commercial buildings and smart residences, systems and building automation has everything you need in this fast-paced space – smart ways to use electricity, grids, and metering, energy efficiency solutions, innovative lighting, building and automation systems, smart sensors and security, HVAC and lift offerings. There is a particular focus on energy efficiency in buildings as it is responsible for more than 40% of Indonesia’s primary energy consumption — due to Indonesia’s hot and humid climate.