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As we welcome the new year, Brian G Miles, MD, Schaefer Systems International, shared his thoughts with APFI on the region going forward.

On 2014 & The Growing Middle Class

2014 has proven to be a good year for us in Asia with our projections being exceeded. The driving force was retail, all aspects of it, from MNC’s cranking manufacturing, increased demand from 3PL operators creating distribution warehouses, and e-commerce.

The growth in affluence in Asia with literally millions of people joining the ‘middle class’ has changed buying habits. Retailers are stocking a far wider range of stock keeping units and the demand for cold storage has grown throughout the region. 

In duty free Singapore and Hong Kong, the demand for ‘designer products’ have grown exponentially, fuelled by buying power from China, Indonesia, Malaysia and Thailand.

 

On China & Its Growing Domestic Focus

2015 could see a slowdown, already we are seeing the measures adopted in China that are cooling the economy. Banks have slowed down lending to private enterprise with the concentration now on developing a strong home economy. 

One has to wonder what will be the potential import market in the next 10 years as the domestic market of China becomes self-sufficient. With rising labour costs, limitations in labour and work skills, we are seeing a growing demand for automation systems particularly in the rapidly expanding e-commerce market. 

We have now commissioned the first full automated system for e-commerce warehouse in Shanghai this year with a second larger contract going live in 2016.

Even so, the forecast from our regional office is extremely optimistic with growth projected at 12 percent over our results in 2014. We still see the traditional markets of FMCG being the driving force, with a growing acceptance of some form of intelligence within the warehouse operation.

 

On The Rise Of Automation

I am always nervous to talk automation, due the bad experiences of the early 90s when so many automated storage and retrieval systems (AS/RS) were built without any planning. 

Most of these white elephants have been dismantled over the last 10 years, as they lacked the flexibility to meet current supply chain demands. But it is significant that one system that we have installed for YCH in Singapore in 1998 is still running and fully operational, and will only be dismantled due to the extension of the MRT to the second link.

We will be building a new larger higher fully automated rack clad AS/RS system for the company in 2015 on a new plot of land in Jurong, which will go live in 2016. 

We have recently secured a second fully automated rack clad warehouse for a manufacturer in Tuas and we have seen an increase in demand for these automated systems. But these are now designed to meet long term demands, offering a range of case and piece picking options.

 

On Labour Shortages

Singapore continues to provide excellent growth, it seems that 3PL operators are building ramp up multi-tier warehouses for completion in 2015/16, with the Singapore government’s reduction of work visas for low cost labour, and we can see a demand for more intelligent storage systems.

Even in Malaysia and Thailand, we see serious labour shortages which will fuel the demand for more sophisticated storage systems. Indonesia and the Philippines are two star economies of the ASEAN, which have registered the highest GDP growth over the last 3 years.

Both of them escaped the great financial crisis relatively unscathed. Their economies have grown with increase overseas and local investment in their manufacturing sectors.

 

On Stabilisation In The Region

With a new government in Indonesia, one hopes for continued growth for the region’s largest population. The Philippines have an election in 2016 and we hope that some one of the same style of President Aquino will continue his good work. Thailand has seen the economy stabilise and grow under military rule, and it is difficult to see what will happen when democracy returns.

While we see low-end competition appearing in Singapore and other ASEAN countries from China and India, this is a natural market development. However, these importers will struggle to meet the technical demands of the authorities to meet international design standards.

To meet the anticipated demand, we have invested €8 million in new production, special steel work, and warehousing buildings on our site. We are looking forward to a positive year ahead.

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  • Last modified on Tuesday, 23 February 2016 14:55
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Asia Pacific Food Industry (APFI) is Asia’s leading trade magazine for the food and beverage industry. Established in 1985, APFI is the first BPA-audited magazine and the publication of choice for professionals throughout the industry with its editorial coverage on the latest research, innovative technologies, health and nutrition trends, and market reports.

Asia Pacific Food Industry is published by Eastern Trade Media Pte Ltd. The company owns numerous trade and consumer titles, including Asia Pacific Metalworking Equipment News and Industrial Automation Asia.

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