Remote - Special SCADA issue 2012 - (Page 10)

FEATURE As the Brain, So the Body: The PLC Market and Automation Alex Hong, Market Research Analyst – Industrial Automation Group IMS Research Programmable logic controllers (PLC), as the main control elements in entire factory automation systems, act as the brain and changes in the market for PLCs gives insight into the factory automation market as a whole. This article gives the background to the development of the PLC market in earlier years and shows its prospects for the future. Regional differences in this market and innovations in technology are discussed. Although the worst of the global 2008-2009 recession is behind us, it can still be remembered in the automation market. The world market for industrial automation products is mature and stable, and has grown steadily for many years. However, the recession started from late 2008 until 2009 rudely interrupted this pattern of steady growth. For PLCs, 2009 revenues were 30 percent lower than those of 2008. At the time, PLC vendors were quite pessimistic about their prospects. Although most of them thought that recovery would begin in 2010, it would be 2013 before revenues returned to their 2008 level. Their reasons were clear, 2008 could a 30 percent drop be made World 1.4% up any faster? EMEA 8.6% It could, and was. The recovAmericas 3.6% ery was stronger and earlier than Asia/Pacific -0.3% the industry expected. According Japan -28.6% to IMS Research’s latest report “The World Market for PLCs – 2011 Edition”, by the end of 2010, global PLC revenues, estimated at $8.2 billion, had grown magnificently by nearly 30 percent from 2009, almost back to the level of 2008. In the recession, funding dried up for many ongoing projects. As a result, demand for automation products simply withered away. However, several governments acted to prevent a worse recession by large state stimulus packages, in turn helping many markets to gain access to funding. The customers of PLCs manufacturers, mostly OEMs (machinebuilders) and larger end-users, had money again to purchase more PLCs and other automation products to continue with projects. In 2010, both new projects and older ones contributed to the strong growth in 2010. Although PLC manufacturers were delighted with the result in 2010, they were also uncertain about 2011 after such a strong recovery. Would the growth be sustained, or would market demand suddenly drop down? Happily, the 2011 result remained positive, growing strongly though not as fast as in 2010. As a result, PLC revenues were still high in 2011. However, some in the industry are quite uncertain whether the growth will continue in 2012. 2011 was still a good year, and they can hardly believe the growth will still continue. In the world at large there is growing uncertainty about the global economy. Factors, such as austerity measures and the debt crisis in Europe, the tightening economic policy in China, and the natural disasters in Japan and Thailand are affecting the industrial markets. However, IMS Research believes that there will still be growth in 2012 for PLC revenues, mainly because many important and big markets for PLCs, such as Germany, France, China and the US are still performing well. Besides, emerging markets, such as Brazil, and India, could be the next contributors to global growth in the PLC market. Europe – A Big Market with Small Problems For PLCs, Europe is the most important part for EMEA, and Germany is the most important country in Europe. It was the first country to come out of the recession and will continue to be the leader in the PLC market because of its large base of automation markets and its technology innovation. In contrast, countries in Southern Europe (Greece, Portugal, Ireland, Spain and Italy) have severe austerity measures to tackle their sovereign debt problem. Confidence in the Eurozone has fallen and there is concern whether the extreme problems of Greece will spread to the larger economies of Spain and Italy. However, as regards EMEA markets for PLCs this is currently not projected to affect 2012 growth. Germany, France and other developed markets still will lead the way. The emerging markets in Eastern Europe, where automation level is relatively low but growth is rapid, will make up for some 2009 2010 2011 -19.1% 30.4% 12.5% of reduction of the industrial -24.4% 15.5% 10.4% automation market in Spain and -29.7% 36.7% 11.5% Greece. The EMEA market for -1.0% 55.4% 19.6% PLCs is projected to continue to 2.3% 30.4% 4.5% grow at a single-digit annual rate over the next few years. The Americas – A Big Market with Strong Growth The situation in the Americas seems to be more positive than the EMEA. Its most important PLC market is the US, accounting for more than 60 percent of the regional total. Although the economic downturn started from here, its stable and mature economy recovered from the recession faster than most countries. Since 2010, strong domestic demand in the US, such as from food and beverage industries as well as from big end-user projects, continues to drive growth in the industrial automation markets. In the other hand, Latin America is still under-developed compared with the US, and accounts for much less of the PLC market. It managed 10 percent growth in 2011, because of many new projects starting in emerging markets. Brazil, one of the most important countries in Latin America, is a rapidly emerging market for automation equipment. Its strength in endusers, notably in the oil & gas industry, coupled with the upcoming World Cup and Olympic Games, will stimulate further automation development and infrastructure investments. Having said this, the US will remain the core contributor for future PLC market development in the Americas. Asia – Still Growing, but Not as Fast as Expected Asia, excluding Japan, is no doubt the shining star. Even during the recession, PLC revenues perhaps fell by only 1 percent, and in 2010 revenues in this region grew by more than 50 percent. China, with its vast and growing manufacturing base, contributed much of this. The fact that it is the biggest builder of machinery in the world helped. In 2010, the manufacturing of textile and rubber machinery in China showed extraordinary growth. In addition, end-users in renewable energy, infrastructure PLC Regional Information PLC Market – The Recent Past Now and the Future 10

Table of Contents for the Digital Edition of Remote - Special SCADA issue 2012

Remote - Special SCADA issue 2012
Re-Inventing SCADA for the Next Generation Enterprise
Securing Automation within Critical Infrastructures for SCADA Security
As the Brain, So the Body: The PLC Market and Automation
Reducing Labor Costs and Increasing Investor Confidence With Real-Time Monitoring of Photovoltaic Energy Network
Advantages of the DNP3 Communications Protocol in Water & Wastewater Telemetry Systems
Hardwire vs. Wireless Failsafe Control Systems
Advantech Introduces IEC 61850-3/IEEE 1613 Compliant Substation Automation Platform
CalAmp Launches Fusion-LTE 4G Broadband Router Platform for Smart Grid Applications
El Paso Water Utilities Implements Trimble Fieldport Mobile Software to Streamline Customer Field Service

Remote - Special SCADA issue 2012