5 Reasons Entrepreneurs in Metalworking Industry Should Invest in Smart Factory 4.0 Technologies
Allocating money for huge investments especially in new technologies can be daunting. We understand this hesitation, so we have compiled 5 reasons to help entrepreneurs in the metalworking industry consider why this is the right time to invest in Smart Factory 4.0 technologies.
1. Efficient production quality management: having a large variety of machinery for different purposes on the same shop floor can be difficult to manage because operators need to consolidate production data from different parts of the production line. Without effective management solutions, the data can appear confusing or become misinterpreted which could be detrimental to the overall production system.
2. Maximize 5G technology: it would be counterproductive if industrial operators do not take full advantage of 5G when Thailand ranks the world’s number sixth in terms of the largest 5G network coverage behind only South Korea, Saudi Arabia, Kuwait, Hong Kong and USA (data from Open Signal). 5G enables fast internet connection of multiple devices in the same area, and also helps support machine-to-machine control (M2M) to work seamlessly with more flexibility. It also reduces labor costs and lowers risks or errors that may occur in the production process.
3. Reduce human error: when processes are preprogrammed and operated by robots and automation system, more precision can be achieved in a shorter time. If the solution is designed appropriately, each work step will be monitored so it will become easier to assess and resolve any errors should they happen.
4. Easy management with real-time reports: operators will be able to access insights anytime, anywhere. They will also be able to share their data with suppliers and a network of factories around the world. This will accelerate the speed of different processes as well as the closure of business deals.
5. Get full benefits from the BOI: during the Covid-19 crisis, the global value of Industry 4.0 in 2020 was $90.6 billion. This is expected to increase to US$219.8 billion in 2026 with an average annual growth rate of 16.5% (data from Global Industry Analysts). As many as 70% of Thai industrial sector are still operated with the industry 2.0 technologies or lower, and only 28% are at the industry 3.0 level (data from the Federation of Thai Industries), the BOI has designed a plan to support the upgrading of these factories to become fully Industry 4.0 compatible.
These goals are not easy because many facets need to be developed in tandem, including robotics and automation, intelligent systems, and various modern digital technologies. They also require a huge capital. Therefore, the BOI’s new measure is designed to help promote and support the upgrading of machinery for operators in various industrial segments including the metalworking industry to become fully automated without a huge financial burden.
Metalworking industry is extremely important to Thailand’s development because it is an industrial cluster that produces steel, the base material necessary for many downstream industries including construction, automotive, electrical appliances, packaging, and many more, all of which contribute massively to the expansion of Thai economy. Obviously, if metalworking entrepreneurs can collaborate to transform all factories into Smart Factory 4.0, the whole country will reap the benefits together.
The conditions for entrepreneurs to apply for benefits from the BOI include submitting their investment plans in either Automation and Network Technology, Smart Operation, or Digital Technology in Production & Enterprise Processes to the National Science and Technology Development Agency (NSTDA) and get approval. Then, they will be able to receive 100% tax exemption of their total investment for the period of three years.
Entrepreneurs interested in upgrading their operations to Smart Factory 4.0 can apply for the incentive package from BOI within the last working day of 2022 (Friday, December 30) and must complete the process within three years from the date of issuance of the incentive certificate. That means entrepreneurs still have time to plan their investment strategies and what technologies to invest in. However, it is highly recommended to consult with the experts prior to making a decision. If you are SMEs who submit a minimum investment plan of 500,000 baht, you will be entitled to up to x2 corporate tax exemption as well as other conditional benefits from the BOI.
Since the world keeps moving forward, it is important for industrialists to shift their mindsets and understand that investment in Smart Factory 4.0 is a necessary move. As time progresses, there will be a return on investment that offsets the initial costs and the increasing ability to make profits which brings about stable and sustainable business in the long run. The incentives from the BOI can be a ticket to this opportunity that you should take advantage of.
Smart Factory 4.0 is a trend that needs to be monitored closely. If you are interested in new developments about this trend and other relevant technologies, don’t miss the next edition of METALEX Blogs!
Source: The Board of Investment of Thailand (BOI)