Metalworking Trends in 2023 and Competition through Technologies and ESG
• The metalworking industry continues to grow, especially the sheet metal fabrication segment. This is in line with the growth of related industries such as manufacturing, construction, aerospace, automotive, architecture, electronics, food processing and telecommunications.
• Modern manufacturing technologies including robotics, automation systems and IoT are being adopted at an accelerated rate.
• Entrepreneurs cannot neglect ESG philosophy because of expectations from business partners and consumers. It will also enable businesses to grow sustainably.
Should metalworking entrepreneurs prepare for a slowdown in 2023? Is the shift to robotics and automation a major trend that can help solve the labor skills shortage? Is following ESG philosophy an alternative practice or a must for businesses? Let’s find out in this article about 2023 trends in metalworking and competition through technologies and ESG.
This industry remains strong and dynamic, and brims with a large number of players. However, many of them are still struggling to get back on their feet after the COVID-19 pandemic. It is expected that the mold & die industry which is of great importance to the manufacturing of metal products will provide the necessary momentum since it is an upstream industry and is indispensable in the mass production of identical-shaped metal products.
Meanwhile, increasing demands for manufacturing, construction, aerospace, automotive, architecture, electronics, food processing, telecommunications and many more are expected to drive growth in the sheet metal processing segment over the next five years.
According to Vantage Market Research, the global metalworking market was valued at $11 billion in 2020, and is expected to reach $14.15 billion by 2028 at a compound annual growth rate (CAGR) of 3.2% from 2021 to 2028.
On another note, the rise of "Aluminum" is expected to continue to fluctuate due to the Russo-Ukrainian conflict, logistics challenges, fear of a growing recession, and the leftover damages from the COVID-19 pandemic. The high cost of energy remains a threat to aluminum supply because it consumes the most energy to produce, using about 40 times more energy than copper.
After knowing the overall situation of this industry, let's take a look at some up-and-coming trends in the metalworking industry in 2023.
1. "Digital technology" is becoming increasingly important. The metalworking industry has changed dramatically in the past few years. It has today become more digital and data-driven than ever. The impact of the COVID-19 pandemic has underscored the unprecedented power of digital technology and productivity, according to International Data Corporation (IDC), which reported that digital will dominate the Southeast Asian market by 2023. It is estimated that one-third of all the companies will generate more than 15% of their revenue from digital products and services by 2023 compared to just one-sixth in 2020.
A compelling example of a digital tools includes the Liquidtool Analyzer which allows a detailed metal-cutting process to be captured and data to be collected in a transparent manner.
Meanwhile, digital technologies are crucial in optimizing supply chains. They allow metal miners to operate at higher-than-expected production rates by using remote operations centers (ROCs).
2. Internet of Things (IoT) helps reduce production costs. Technologies that enable predictive maintenance and machine health monitoring will continue to be critical to reducing operating costs and increasing operational efficiency. Factories that have installed various real-time data collection devices including sensors to analyze defects, and measure output quantity and quality with IoT-connected devices, will enable the prediction of when and how machinery parts will need maintenance.
According to a report by McKinsey Global Institute, the adoption of IoT can reduce maintenance costs by 25%, reduce unplanned downtime by 50%, and extend machine life by several years. In addition, as companies are looking to increase production efficiency and machine reliability, predictive maintenance technology will also play a crucial role in reducing maintenance complexity.
3. "Robotics Technology" is creating excellence in manufacturing. Various factors including the increasing growth of digital technology and automation, the growing number of aging societies around the world, and the changing trends in working styles, should encourage manufacturers to prioritize innovative robotic technologies to improve productivity and increase the adoption of automation in the operation process to help create added value. Additionally, the demand for automation in the metalworking industry is expected to increase more than fivefold by 2025.
4. ESG Philosophy should be every company’s priority. Climate change, geopolitics, capital and labor are all reshaping the mining and metals industries. Therefore, we will continue to see demand for the manufacturing sector in the metalworking industry that must meet the standards for environmental protection, occupational health, and safety.
Sustainable production is no longer a "nice-to-have" but a "must-have" that can be achieved by using fewer resources and being more energy efficient.
Furthermore, if any metalworking industrialists can effectively apply ESG philosophy in product development, they will be able to create greater advantages and business opportunities. For example, Siam Yamato Steel Co., Ltd. or SYS has introduced a new product called "Green Steel Series", which is Thailand’s first H-beam steel (a large hot-rolled steel that is more durable than other steel shapes) that offsets energy consumption by using electricity generated from renewable sources to support Green Construction customers.
Those interested in the latest development in the metalworking industry, please follow future editions of "METALEX Blogs" and don’t forget to mark the dates to experience the most efficient metalworking technologies and solutions from top brands at METALEX, from 22-25 November at BITEC, Bangkok!