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Key Trends For Growth In Southeast Asia

Key Trends For Growth In Southeast Asia

With 2017 looking to be a year of steady manufacturing growth for Southeast Asia, machine tool makers that form the backbone of most industry development would do well to take notice. By Jonathan Chou 

Machine tools are part and parcel of manufacturing, particularly in segments such as automobiles, aerospace, defence, and railways. The machine tool market is thus closely linked with the ups and downs of each specific industry.

With the Nikkei ASEAN Manufacturing Purchasing Managers’ Index (PMI) showing Southeast Asia ticking upwards to 50 in January this year as compared to 49.4 in December 2016, machine tool makers could benefit from identifying upcoming growth areas in the region.

Economy Boosted By Manufacturing: Singapore

Singapore was estimated to consume approximately US$310 million in machine tools in 2016, according to Gardner. This represents a substantial amount of spending, and even with its small geographic size, the country is projected to be the 14th top market worldwide for metalworking equipment in 2016-2017, as said by the International Trade Administration.

The country’s gross domestic product growth rate performed above expectations, expanding by 2.9 percent year-on-year in the last three months of 2016, higher than 1.2 percent in the previous period and above initial estimates of a 1.8 percent growth. It is the highest expansion since the third quarter of 2014 and was mainly boosted by manufacturing, according to figures by Trade Economics.

The Singapore economy mainly relies on purchasing of intermediate goods and exporting of high-value added products. Machinery and equipment take up 46 percent of total exports, and opportunities in the country are thus mainly focussed on the high-end precision engineering sector.

Indonesia Setting Sights On The Automotive Sector

The Indonesian government has identified vehicle manufacturing and assembly as a key industry for development in the next five years, in hopes to become Southeast Asia’s largest centre for vehicle assembly.

The nation also promoted local manufacturing of auto parts and components, with forging, casting, and stamping processes being the main areas to boost growth in production of assorted metal goods.

In 2016, Indonesia purchased a total of US$76.88 million worth of lathes and turning machines. As for machining centres, Indonesia imported a total of US$62.22 million during the same period, according to the Taiwan External Trade Development Council, which also added that Taiwan has remained one of the major suppliers of machine tools to the Indonesia market in the past five years.

With the government releasing economic policy packages designed to attract fresh investments and spur market activities (of which 14 had been released so far since September 2015), the automotive sector in Indonesia seems to be shaping up for growth.

Improving Investor Climate: Vietnam

For the past few years, Vietnam has been emerging as an attractive foreign investment destination. Manufacturing and high-tech industries constitute a fast growing part of the economy, and the country is also one of the largest oil producers in the region.

According to the German Embassy in Hanoi, many major German companies, which are operating in various fields such as automobile, energy and industrial machinery in Vietnam, plan to expand their presence in Vietnam to take advantage of the improved investment climate and signed free trade agreements.

This includes companies such as Marquardt Group which arrived in Da Nang to discuss with municipal authorities on the production of high-tech automobile equipment and components. The project would have an estimated investment of about US$39 to 50 million and generate jobs for some 500 to 600 local workers.

Promising Signs

The global machine tools market is predicted to exceed US$120 billion by 2020, growing at a compound annual growth rate of more than six percent and a large portion of this growth will take place in Asia, according to Technavio.

Anju Ajaykumar, lead analyst at Technavio for tools and components research observed that industrial sectors such as automotive, industrial machinery as well as aerospace and defence are showing “signs of positive growth which will augur well for the growth of the machine tools market during the forecast period (2016-2020).”

The promising signs of manufacturing growth in Southeast Asia this year could very well indicate an associated uptick in orders and purchases in the machine tools sector as well.

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Efficient Sawing In A Digitised Environment: Kasto Industry 4.0 Machinery And Equipment Are Key

Efficient Sawing In A Digitised Environment: Kasto Industry 4.0 Machinery And Equipment Are Key

The rise of new Digitised Environment industrial technology, referred to as “Industry 4.0”, is transforming the business models of distributors, manufacturing plants and service providers throughout the world, and Southeast Asia is no exception. By Armin Stolzer, owner and chief executive officer, Kasto Industry 4.0

Industry 4.0 Machines, goods, raw materials, load carriers, transport equipment and locations are no longer isolated; they are globally linked and interconnected by means of information networks. Production and logistics are merging, and the integration of processes is increasing. Handling tasks are becoming more and more automated. Digital technology controls the value chain from the producer of raw materials to the final customer.

This has created immense opportunities for companies Digitised Environment Machinery And Equipment Are Key, but it has also confronted them with new challenges. Competition is becoming more international and thus more intense. Only by standing out from the crowd and offering customers genuine value can a company stay competitive in the long run. At the same time, expectations in the market are increasing. Customers are demanding more and more different products, and these must be produced in smaller batches. Production must be fast, free of defects, flexible, inexpensive and reliable.

Speed, Versatility, Precision

In the metalworking industry, for example, sawing technology must meet increasingly tough requirements. Industry 4.0 Machines and tools must not only be fast and versatile, they must also produce cut parts with precise dimensions and surfaces of excellent quality. When the parts are burr-free and reproducibly precise, less work is required for reworking. This raises production efficiency.

Moreover, users want to minimise losses at the start and end of the cut and other kinds of waste in order to make optimum use of the material. For this, high-quality sawing technology tailored to the given requirements is indispensable. When it comes to cutting bar stock in the skilled trades, manufacturing and steel processing, further increases in efficiency and cost-effectiveness can be expected in the future. In each sector, the potential for improvement differs depending on the material, order structure, production volume and personnel costs.

In particular, metal sawing machines for various purposes have been significantly improved through technological progress, with notable increases in cutting performance. Moreover, material handling for sawing has been simplified, with shorter idle times, automation of the material supply and better removal of cut parts.

Automation Kasto Industry 4.0 In Sawing Technology

The Southeast Asian market therefore has a huge demand for innovative and high-quality sawing technology. Efforts are being stepped up in all industries to deploy networking and automation to rationalise production processes.

This is where sawing machine manufacturers can provide users with optimum support. Even the standard versions of many modern sawing machines offer a high level of automation and can be integrated without difficulty into a uniformly controlled materials flow.

This is also true of combined sawing and storage systems in which all the storage, handling, sawing, marking, palletising and bundling processes are performed fully automatically—from the entry of the raw material through to the commissioning of the cut parts. These tasks are increasingly carried out with the help of industrial robots. The requirements relating to performance, efficiency and flexibility are steadily increasing, and these are areas in which robot technology offers enormous potential.

When it comes to saw blades, carbide tools promise significantly improved performance in the machining of various materials. There have also been enhancements in ergonomics and design, including incorporation of strict safety standards.

An increasing division of tasks is arising between high-volume steel suppliers and manufacturers on the one hand and smaller metal-processing companies and manufacturers on the other. The latter need low-cost, universal sawing solutions to cover a broad range of sawing applications, while high-volume producers are investing in highly automated sawing facilities with the aim of cutting personnel costs and running their machinery for long hours without staff.

Carbide-tipped sawing tools are finding increasing use in high-volume production with band saws and circular saws because they considerably reduce sawing times.

Carbide Tools, Advanced Performance

To take full advantage of the increased performance offered by carbide tools, a machine must be massive, robust and optimised to prevent vibration. Thanks to its excellent damping properties, polymer concrete is often preferred to gray cast iron for this purpose.

Other important requirements include greater drive power with a corresponding drive design, modified cutting edge feed, protection of teeth when the blade is retracted and adequate chip removal. Today’s sawing machines also include advanced components for driving, guidance and sensors. More than in the past, it is now possible to provide low-cost, custom solutions by means of fully enclosed machines based on a modular design. Modern machine control systems make it easy for operators to enter engineering and job data.

Companies that do made-to-order sawing in small and medium-sized quantities are increasingly relying on sawing machines with carbide tools. On the feed side, these machines often have magazines or are connected to a sawing centre, allowing them to run fully unattended for long periods. In addition, the outfeed side is modified to cut back on manual sorting and palletising. Robot solutions are flexibly integrated into the machine design so that cut parts can easily be sorted and other machining steps like deburring, milling or centering can be added.

Lowering Cost Per Cut

From the broad range of modern sawing machines in various performance classes and automation levels, the perfect solution can be found for every application. Significant advances in sawing and tool technology have brought about substantial reductions in production times and idle times. Although the necessary high-end peripheral equipment can be more expensive, when applied under the right conditions it can significantly lower the cost per cut and raise overall productivity.

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Nimble Flexibility: Providing Niche Tooling Services

Nimble Flexibility: Providing Niche Tooling Services

Dietmar Kogler, managing director, Arno Werkzeuge SE Asia, speaks to APMEN on how his company provides specific tooling services for manufacturers in the region.

With Southeast Asian manufacturers predominantly specialising in the automotive industry, how does German cutting tools and inserts company Arno provide services for the sector?

What are your thoughts on the Southeast Asian Market for Arno Tooling Services?

We are fairly new in the Southeast Asian market, as we started our own subsidiary in end 2014. Compared to the larger companies, we are more of a niche product company. Our approach is, therefore, more focussed and different, we are looking for smaller companies where we can go in with our strengths.

We also do some cost-per-part projects, which is a bit different. This means to say that we do not want to sell a “cut-and-go” product. We want to give them a solution and break it down to a cost-per-part analysis. The customer does not pay for the tools anymore; he pays per produced part instead.

The markets are quite similar in Southeast Asia; Most are dominated by the Japanese, especially into the two-wheeler or four-wheeler business. Many business goals then depend on the automotive industry: if things are good, business goes up; but if things are not so good, sales goes down.

But this does not affect us much, because we are more niche-orientated and we are not going into mass production. Since we are a newcomer, we do not have much to lose; we can actually have everything to gain. And so far, the past two and a half years were quite successful to us. We also have good partnerships in almost all markets, and we still have the potential to grow.

And what about the company’s goals for the next few years?

I think that within the next three years, the company will be very much recognised in the region as a niche-orientated solution provider. This is because as a smaller company, we are much more flexible than the bigger ones, and a lot of companies want such a supplier.

The trend in Europe is that you tend to see big companies consolidating their suppliers. We do not see that trend here, and because of this, we will be one of the companies that will have an advantage because we are more flexible and niche-oriented.

Of course, you have to have a different strategy and approach. Just to give you an indication: we have roughly 50 million euros turnover with 170 staff worldwide. While the turnover is quite good per head, but if we want to compete directly, then there is no chance in terms of manpower and pricing.

Therefore, we look at products where we have a standard where others do not. If a customer tells me, “I need something that is not standard, I can consume 20 a month”, we can provide that as a standard. Other companies are looking at 1,000 a month, so that amount is not interesting for them. But it is interesting for us. This is our general strategy worldwide, and we are copying and adapting that to the local market here in Southeast Asia.

We also do not supply a lot to the automotive industry in Europe. But in Southeast Asia, we go into the automotive sector. This is because yet again, we are not going for mass consumption, but by picking out the niche markets here.

What are your company’s strengths in Tooling?

Our company strength is in grooving and parting off. Grooving and parting-off are one of our key products, and in the past, the coolant was always external. But the drawback is that when you go deep, the coolant will not reach the cutting edge.

So we developed a through-coolant system for the parting-off tool called the ACS cooling system. We have two versions. The first has a cooling system at the cutting edge. The other has an additional coolant jet targeting the insert flank for underneath. There are dual functions for this: You provide cooling and also chip control. We also found out that with this cooling system, tool life can actually be up to double the original.

This is suitable as our tools do not need a top-end machine tool to be attached to. This is especially suitable in Asia, as manufacturers here will typically buy one machine tool for a specific purpose. This is different in Europe, where they will invest in a high-end machine tool for different purposes.

The customer just needs to tell us where they need the hole, and we make it accordingly to his specifications. With that, you can put it on the machine, and get through coolant with little effort.

We also work with machine tool makers, and we have special holders for companies like Daewoo Doosan, DMG Mori, Miyano, Nakamura and Tornos. We are investing a lot in direct mounting as well. The tool goes direct on the machine; it is very rigid with through coolant, so the output is more. If something happens, you do not have to change the block, you can just change the module.

What other area does your company specialise in?

We do have a wide range of high-positive inserts. In the past, these used to be used for machining aluminium. But with all the new coatings available, there is used for medical applications and even for work where you need to have very fine surface finishing. They can also be used for small parts machining.

 

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