Machinery and Equipment (M&E) industry is one of the catalytic subsectors to spur the economic transformation to greater prosperity in Asia, due to its cross-cutting linkages with all economic segments such as the primary, manufacturing and services sectors. The adoption of technological advancement would steer the region’s progression to become higher income region during the next decade.
Why choosing Asia?
The M&E industry is highly competitive and consistently striving to innovate new production systems and provide integrated solutions with the most advanced technologies and automation. The Asia Pacific region is poised to be the epicenter of business and trade in the coming years. An increasing number of MNCs are choosing Asia Pacific as the hub to manage their business and trade in Asia as well as considering alternative locations within this region, outside China and India. ASEAN economies being the second-fastest growing in Asia after China have the potential to be their second hub in Asia.
From serving as contract manufacturers to Original Equipment Manufacturers (OEMs), more local companies are already undertaking R&D, engineering design, innovation and system integration and developing proprietary M&E for global exports. Thus, Asia is increasingly becoming a choice destination for Multinational companies seeking to outsource their manufacturing processes. Asia’s engineering supporting companies have been also groomed to provide consistent quality of production and on-time delivery.
Exports as well as imports of M&E in Asia have been consistently growing the last couple of years, indicating Asia’s dynamic and rapidly growing economies. Imports are mainly for advanced, high-tech machines and components and some general machinery & equipment that are not available locally.
Which factors drive the Asian growth in the M&E industry?
The growth of the M&E industry in several Asian countries is driven by the continuous inflows of both foreign direct investments and domestic investments in various sectors; among the major sectors are the semiconductor, electrical & electronics, automotive, oil & gas, aerospace, medical and food processing.
The needs for high-technology M&E in these industries is the key to their survival within a global environment and will accordingly continue to grow in the future. Some Asian countries’ M&E industries are forecasted to grow at over 10% per annum from now until 2027. M&E production will not only continue to be the field of interest for foreign investment, other areas of the value chain also provide opportunities for profitable investment. Service and maintenance, repair and overhaul (MRO) are also in high demand due to high density of plants and M&E installations in this region.
Examples of opportunities
Asia’s M&E manufacturing offers opportunities in, for example, four major sub-sectors:
- Specialized process machinery or equipment for specific industry
This sub-sector refers to M&E which is specifically designed and customized for use in a specific sector or process. Industries targeted include electrical & electronics, solar/ photovoltaic, semiconductor, oil and gas, automotive, packaging, plastic extrusion & injection, agriculture, etc.
- Metalworking machinery
The metalworking machinery sub-sector presents vast opportunities in the manufacture of M&E such as laser cutting machines, machining centers, electro-discharge machines (EDM), milling machines, drilling machines, lathes, shearing machines, bending rolls, stamping machines, press brakes, forging machines and presses.
- Power generating machinery and equipment
The power generating M&E sector mainly comprises boilers, condensers, electric generating sets, turbines and engines.
- General industrial machinery & equipment, components and parts
The general industrial machinery and equipment, components and parts sub-sector covers a broad category of products such as air-conditioning plants, cold room equipment, elevators, cranes, conveyor systems, pumps, compressors, welding machines, fans & blowers, heat exchangers, pressure vessels, filtering equipment, valves, bearings, gears, actuators, etc.
Asia’s market-oriented economies form an encouraging backdrop for M&E companies. The pro-business policies of the Governments, attractive incentives, good infrastructures, and educated and trained workforces and laws that govern ethical business practices are among the many reasons several Asian countries stand tall as a leading investment center in the region.
If you like to know more about opportunities in Asia for your company, and like to develop an effective market entry and business development strategy, please contact us