Rallying for the rise of the machines

State agencies are encouraging the move away from labour-intensive industry

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Most manufacturers, ranging from small companies to large enterprises, are switching from labour-intensive production to increasingly automated processes in order to reduce reliance on labour and increase efficiency and productivity.
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Thailand has prioritised robotics and automation in industrial production lines this year through government policies implemented since August.

The Board of Investment (BoI) has opened applications for investment incentives for robotics and automation, which has led to more innovation and investment in the sectors.

BoI data shows that several large enterprises and SET-listed companies have applied for the incentives with a combined investment value of 15 billion baht.

The incentives include tax holidays, corporate tax cuts and special tax deductions for capital expenditure on robotics and automation.

Other state agencies have also offered funds to small businesses and new entrepreneurs, as well as consulting services from educational institutes to companies that want to adopt robotics and automation systems.

At this stage, however, only large enterprises such as Charoen Pokphand, PTT Plc and Siam Cement Group have started developing robotics and automation.

Robotics guru Djitt Laowattana, the founder of the Institute of Field Robotics (FIBO) at King Mongkut’s University of Technology Thonburi (KMUTT), said 2017 marked the beginning of the transformation from labour-intensive industry to high-tech industry.

He said the need for robotics and automation was proved years ago in a 2014 FIBO survey. The survey polled 512 industrial firms and found that those which did not make the switch to robotics and automation would be out of business within three years.

The major rationale for this prediction was that Thai industry is facing higher production costs and declining productivity because of a heavy reliance on labour. Most firms do not care about this, however, as many assume that migrant workers from neighbouring countries will be available to work at factories, Mr Djitt said.

“They were not concerned anymore about relying too much on migrant workers … until one day they were forced to learn a severe lesson.” he said.

In May 2014, the military government ordered all migrant workers to register with the Labour Ministry.

Migrant workers across the country, fearing a crackdown, fled in their millions from Thailand.

Many firms that relied on low-skilled migrant workers stopped operating completely for days, causing massive losses and disruption to industry.

“Industrial factories were then encouraged to adopt robotics and automate their production process.” Mr Djitt said.

Mr Djitt says 2017 was a turning point in Thailand’s industrial evolution.

The government’s master plan for robots and automation includes raising capital expenditure on development of robotics systems by 200 billion baht over the next five years.

An estimated 500,000 robotics and automation units have been installed this year at factory production lines.

Demand for robotics systems in factories is forecast at 10,000 units a year over the next few years.

The plan is aimed at increasing productivity. The government will support creating more robotic integrators, raising the number of experts and seeking technological upgrades, said Mr Djitt.

The government aims to raise the number of robotics experts to 1,400 people within five years, up from the current 200 people.

Some 30% of Thai manufacturers have already adopted robotics in some capacity. In the first phase of development, the government wants to raise the number to 50% within five years.

The government is targeting more industrial companies to develop 50 prototypes of robotics and automation systems over the next five years.

With strong government support and a clear plan, Thailand should be able to reduce expenses incurred from imported robots and automation by up to US$4 billion (131 billion baht) a year during the first stage of the development, Mr Djitt said.

“Ultimately, Thai manufacturers will not be able to avoid using robots anymore and will finally be forced away from labour-intensive processes that require massive costs.” he said.

Mr Djitt predicts that the progression to automation will shape a new era, one in which Myanmar and Cambodia become production bases for several labour-intensive industries and migrant workers will relocate from Thailand for economic opportunity, since there will be no need for cheap labour.

The Electricity Generating Authority of Thailand (Egat) has been the most prominent state agency to apply robotics and automation by not only developing new robotic systems, but also reappropriating obsolete resources to be used in automation.

For over 20 years, Egat has been implementing projects to create new machinery from obsolete materials in an effort to cut production costs and make use of wasted resources to improve efficiency.

This year, for the first time, one of Egat’s innovations was awarded the Platinum Award at the International Warsaw Invention Show 2017, according to Egat assistant governor Patrapong Thepa.

He said Egat is a leading innovation-based organisation within the context of Thailand and will continue to pursue innovation, particularly in the field of robotics and automation, to fulfil the needs of several jobs at Egat.

Mr Patrapong said several Egat innovations were the result of supportive policies that have encouraged private firms and state organisations to excel.

Egat is also considering commercialising inventions in the coming years, he said.

Normally, Egat sets aside a budget of 500 million baht a year for R&D. Following proactive government policies to promote innovation, Egat’s R&D budget has jumped to 1 billion baht for 2018.

One of Egat’s innovations is the application of live-line kit maintenance, used on transmission gear of high-voltage power.

The live-line kit saves Egat more than 10 million baht each year, as the new system does not require Egat to halt operations during maintenance.

Previously, maintenance required Egat to stop transmissions for 3-6 hours.

Mr Patrapong said Egat will next install solar panels at the Egat office to generate internal solar power.

Egat aims to develop 2,000 megawatts of renewable power by 2036 — a plan that has yet to be approved by executives.

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