China's thirst for PLCs

Edited by the Engineeringtalk editorial team Dec 17, 2007

The Chinese market for PLCs is predicted to grow at a compounded annual growth rate of 12.4% over the next five years.

China's favourable business environment is providing ample investment opportunities for manufacturers from all around the world to set up facilities there.

Buoyant foreign direct investment flowing into China, accompanied by rising consumer demand, is propelling the country's manufacturing sector, which in turn is driving the programmable logic controller (PLC) market in China.

The China market for PLCs is expected to grow at a compounded annual growth rate (CAGR) of 12.4% over the next five years.

The market was close to US $750 million in 2006 and is forecasted to be over $1.3 billion in 2011, according to a new ARC Advisory Group study "Programmable logic controllers outlook for China".

Global economic integration and increasing domestic demand largely contribute to the emergence of China as the world's manufacturing hub.

The fiercely competitive market and the need to improve productivity are driving manufacturers to think strategically and increase their investments in new technologies.

"The manufacturing sector's search for sustainable competitive advantages through continuous productivity improvements will lead to the application of plant level automation across all vertical industries in a major way".

"These developments will spur the growth of the PLC market in China", says to Senior Analyst Himanshu Shah, co-author of the study.

China is poised to become the world's third biggest economy in 2007.

For the automation business, China is still the largest growth market and will remain so for the next several years.

Even more impressive than the overall economic expansion is the high growth in fixed asset investments, which are the main indicators for state funded or aided spending on additional manufacturing capacity.

China also continues to attract huge amounts of foreign direct investment.

China's economic growth trajectory is unabated.

The manufacturing industry is buoyant and intensely competitive.

Manufacturers increasingly rely on automation to gain competitive advantages and improve profitability as they do in the global marketplace.

Automation investments by manufacturers are on the rise, and that bodes well for automation suppliers.

Suppliers, however, need to follow well-planned strategies to outperform market growth and gain market share, even during boom periods.

Himanshu Shah adds: "Suppliers in China are adopting strategies, such as including CPM in their solution portfolios, fostering and expanding strategic relationships with OEMs, pricing their products competitively, and others, to exploit the growing opportunities".

The "Programmable logic controller outlook for China" study addresses the expanding role of PLCs and also identifies overall PLC trends in products, platforms, market sectors, and application segments where large investments take place.