Automation sector needs govt boost

By David Tan in Penang

THE automated equipment manufacturing industry in the country can become a major engine of growth for the country if it receives strong government support, according to Pentamaster Corp Bhd chief executive officer Chuah Choon Bin. 

He said the global sales of automated equipment handlers to the semiconductor industry were es- timated at US$172bil annually.  

Chuah Choon Bin

The biggest market is China, followed by Japan, the United States, and Europe. 

“Given its huge market size, there are ample business opportunities for Malaysian companies in this business to grow and expand its share in the overseas markets,” Chuah told StarBiz. “Just imagine that if Malaysia can capture 5% of the world market supply, about US$8.6bil revenue will flow into the country annually.”  

He said automated component manufacturers in the country had been able to grow in the past 30 years because of the substantial foreign direct investments in the manufacture of semiconductor-related products in Penang. 

“During the period, local automation companies were able to expand their research and de- velopment, design and manufacturing departments to support their business partnerships with the multinational corporations (MNCs) in the country. 

“These local automation companies now have the technical know-how to export its in-house high technology to MNCs worldwide,” Chuah noted. 

He said the automated equipment manufacturing industry in the country today had two major advantages. 

“Firstly, it already has acquired the technology to produce quality automated equipment and therefore does not need a transfer of technology from overseas. Se- condly, the industry has also es- tablished the necessary customer network support from MNCs. It has the reputation of having the capability to produce high quality automated equipment priced competitively,” Chuah said.  

He said automated equipment manufactured in Malaysia was between 40% and 50% cheaper than those produced in South Ko- rea, Japan, the US and Europe. 

He said government support was crucial to further elevate the automation industry to an international level of competitiveness. 

He said the government was proactive in encouraging the ma- nufacturing industry to automate and upgrade its production pro- cesses, but had neglected the local automated equipment sector, an important support industry to increase national productivity and development. 

“We hear news of the government’s efforts to promote the growth of bio-technology, pharmaceutical, and photonics industries, but not for the automation industry,” Chuah said. “In the au- tomation industry, Malaysia has many talented local companies providing home-grown technological solutions that can be ex- ported to the world market. It is much easier to develop the au- tomation industry and transform capable local companies into int- ernational suppliers than to in- vest substantial time and effort to develop the biotechnology, pharmaceutical and photonics industries, which are still at the infancy stage in Malaysia.”  

There are now about 30 automated equipment manufacturers in Malaysia, of which almost half are SMIs. 

“The potential of these companies to compete globally may not be realised unless the government gives adequate monetary assistance for research and development projects,” Chuah said. 

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