By Market Research Indonesia Posted August 18, 2016 In Machinery, Manufacturing

Manufacturers in Malaysia are encouraged to automate and embrace the fourth industrial revolution or industry 4.0 in an effort to transform Malaysia’s manufacturing landscape by helping reduce reliance on manual labour and keep exports competitive.

During the 17th Malaysian International Food & Beverage Trade Fair 2016 held in Kuala Lumpur, Second Minister of International Trade and Industry Datuk Seri Ong Ka Chuan said that the government is open to suggestions concerning tax incentives that can employ automation and smart technology in assembly lines of factories.

While most manufacturers are aware of the Industry 4.0 concept, only 30 per cent have started to invest and leverage on modern technology, said Ong. Embracing the fourth industrial revolution would mean that manufacturers will move up the value chain and contribute to a knowledge-based economy.

Essentially, the fourth industrial revolution focuses on “smart factories”, which is associated with robotics, sophisticated sensors for data input, predictive analytics and Internet of Things (IoT). As technology is becoming increasingly integrated, manufacturers would be able to reap cost savings in real-time quality control and maintenance.

Talking about the potential of automation in manufacturing, Malaysia’s food processing industry – accounting for RM18 billion in revenue last year – is expected to pass the RM20 billion mark for 2016 due to good growth potential in processed foods and beverages.

“Demands for automation in Malaysia’s food processing industry is indeed surging”, confirmed Fabian Boegerhausen, Manager of SolidianceMalaysia, an Asia-focused management consulting firm.

In a white paper titled “Malaysia’s automation sector: Pursuit of opportunities and shift in industrial investment”, Solidiance screened over 190 automation vendors to reveal that vendors have eyed Food Processing and Chemical industries as their new priorities.

Ranked Automation Vendors’ Priorities for Relevant Industry Sectors (2015)

Source: Solidiance’s research and analysis

To facilitate the fourth industrial revolution, suggestions and feedback from the Federation of Manufacturers of Malaysia (FMM) and other trade associations have been compiled and hopefully be considered in the 2017 Budget to be tabled in Parliament on October 21, 2016.

The government’s role is imperative for this movement to happen. They must consistently enforce data protection in order to create a trustworthy ecosystem for manufacturers, their suppliers and clients so as to feel comfortable to share confidential and proprietary information.