The Hindu Business Line : Automation sector: Gearing up for new phase

Mr Kenneth I. Juster (Right), Under-Secretary, Department of Commerce of the US, during an interaction session along with Mr Kapil Kaul, Regional President, IACC- EIC, at the Annual General Convention of the Indo-American Chamber of Commerce, East India Council, in Kolkata on Wednesday. — Parth Sanyal

WITH India's industrial landscape opening up with new possibilities and prospects in almost every sector, the industrial automation sector, which provides factory automation, software, instrumentation and electronic solutions to a wide gamut of industries, faces a bright future. At the same time, it is now that those in the automation sector should gear up to face the emerging challenges by packing new technologies and improved services to make the most out of the growing market.

Indeed, the domestic industry continues to invest significantly in automation systems to countenance the winds of competition unleashed by free market forces.

"The Indian manufacturing industry has begun to recognise the value of plant software applications such as PAM, APC and simulation," points out an industry expert.

Cottoning on to the growing need for industrial automation, suppliers are expanding their portfolio of software products to include enterprise solutions and e-business suite to become one-stop shop to meet the end-to-end needs of their clients.

"The highest demand for process automation is from the chemical industry, power plants and metal industry, while the fastest growing demand for products and services of process automation is from the pharmaceutical industry," say experts.

In the industrial automation sector, one segment that holds out particularly significant promise is the instrumentation segment. Explains Mr K. Nandakumar, Chairman and Managing Director of Chemtrols Engineering Ltd: "Instrumentation products can be broadly classified into process control instruments (such as indicators, transmitters, controllers and receivers), laboratory instruments, medical instruments, testing and measuring instruments and defence and consumer electronics. Today, instrumentation has become the brain in the monitoring of the industrial processes."

Recent studies have shown that the present production of control instrumentation related products is estimated to be in the neighbourhood of Rs 4,500 crore, which is around 15 per cent of the total demand. The latest trend in process control instrumentation is that more and more hardware-related functions are getting assigned to software, which is otherwise known as `virtual instrumentation' or physical assets becoming `virtual'.

"Even the size of hardware is getting smaller with new miniature designs. All this means instrumentation technology is migrating into information technology. And this necessitates upgradation of existing instruments," says Mr Nandakumar.

The present size of control and instrumentation industry worldwide is estimated at $130 billion, out of which India's share is close to $1 billion. Experts have projected that by 2010, India could grab a 5 per cent share in the world market, which works out to be $6 billion.

"It is now time for us to enhance national competitiveness through increased R&D. And the Government also should come out with a comprehensive policy for the instrumentation industry," say industry representatives.

Establishment of centres of excellence in design and engineering, encouragement of value-added manufacturing/service concepts in the industry instead of merely importing, enlargement of Government-industry participation and establishment of advance R&D centres for micro-sensors, detectors and micro-electronics were some of the suggestions put forth by industry experts.

The potential that India holds out in this sector is, indeed, attracting global majors. One indication of this is the recent announcement by Invensys Plc, a global automation, controls and process solutions group, regarding the opening of its modern Global Development Centre at Hyderabad— this 50,000 sq ft facility is among the largest outside the US and will work for the Invensys group worldwide.

But what should the Indian automation industry do to enhance performance? "The biggest weakness lies in the industry's inability to manage financial discipline. The domestic automation industry is known for poor financial rations in terms of working capital and margins, in spite of the fact that the industry employs some of the brightest people and deals with extremely complex technology. I feel that financial discipline should be given a proper focus by the industry," says Mr Sunil Dalal, Managing Director of UniDEL.

AUTOMATION 2004: These and a variety of other issues related to automation will be discussed at length at the three-day Automation 2004, a global exhibition and conference being organised by IED Communications Ltd from October 14-17. Over 200 companies from the US, the UK, Germany, Spain, Malaysia, Denmark, Italy, China, Japan, Singapore and Hungary will be participating in the event.

The conference will primarily focus on automation technologies for the process industries.