Growth of oil and gas exploration in SE Asia tipped to draw manufacturing

Economy March 10, 2014 00:00

By The Nation

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Asia-Pacific accounts for nearly 2.5 per cent of global oil and gas reserves, making it an oil and gas hub with exploration expansion in Malaysia, Indonesia and Thailand, according to Frost & Sullivan.

This increase in exploration and export capacity has significantly enhanced the demand for manufacturing execution systems (MES). 
The market generated revenue of US$39.0 million last year and is estimated to reach $51.6 million in 2017. 
The ease with which MES can be integrated into the existing machinery is one of the key reasons for its popularity. Even brownfield projects are gradually adopting MES to boost productivity and meet stringent global standards for quality and reliability. 
Pharmaceuticals and pulp and paper have also begun to install MES to reduce overheads while increasing profit. 
“The high flow of foreign direct investment from the United States and Europe to Singapore, Malaysia and Vietnam has made these countries competitive manufacturers,” Vandhana Venkatesan, a senior research analyst for industrial automation and process control, said last week. 
Shifting manufacturing bases here 
“This, along with the rise of the middle class and availability of cheap labour, has made Southeast Asia a lucrative manufacturing destination, in turn, ramping up the demand for MES.” 
To cater to the growing demand from Southeast Asia with reduced lead times, MES manufacturers are also seeking to shift their manufacturing base to this region. 
However, they often have to contend with the price sensitivity of their consumers. With the increasing costs of maintenance, small and medium manufacturers tend to prefer simple, in-house analysis methodologies. 
While indigenous analysis solutions may save costs, they do not provide the highest levels of accuracy required by global consumers. 
MES are considered crucial for the goal-oriented support of production. They not only link production and enterprise but also other activities in the supply chain, proving a continuous, holistic and manageable value addition for end users. 
“Some of MES’ functionalities include quality assurance, support of production scheduling, evaluation of production with focus on product quality, integration with safety systems and management of current and historical stock,” he said. 
“As manufacturers eventually realise the importance of MES in their process, market demand for these systems is expected to soar.”