Process Automation Regional Market Outlook

  • Europe will continue to dominate the market, in terms of growth prospects in process automation, until 2020. The MEA region is expected to grow at the fastest CAGR of 9.5 percent from 2017 to 2020 
  • Increasing focus on bringing in more productivity and eliminating hazardous manual tasks are expected to be the major drivers for the coming few years


Global Process Automation Market Maturity 

  • The global process automation market was valued at $138 billion in 2016 and is expected to grow at a CAGR of 6.6 percent to reach $136.28 billion by 2020 
  • Europe accounted for 35 percent of the market share in 2016. The process automation industry is fragmented and is competitively catering to a variety of industries with vast end-user segments across industries, such as oil & gas, mining, cement, paper and pulp, etc

Global Automation Market 2016

  • The global industrial automation industry was estimated to be a $258 billion market in 2016, with $116 billion in discrete and $138 billion in process industries  
  • The industrial automation market is expected to grow at a CAGR of ~ 6.6 percent from 2016-2020.Based on the automation type, the Product Lifecycle Management (PLM) segment held a dominant position in the overall market and is most likely to retain its stance over the forecast period  
  • Need for operational efficiency, rapidly growing SMEs, growing inclination towards Internet of Things(IoT) and cloud-based automation, growing demand for smart factories, mass customization,supply chain synchronization, integration of systems, increasing R&D and innovation in Artificial intelligence and advancement in the M2M communication technology are some of the key growth factors of this industry
  • High installation and maintenance costs and lack of trained professionals are some of the constraints in this industry
  • Major companies in this industry include Honeywell International Inc., General Electric Company,
  • Mitsubishi Electric , Rockwell Automation, Johnson Controls Inc., ABB Ltd., Samsung Electronics Co., Ltd., Siemens AG and Schneider Electric

 Supply Market Outlook

Global/Regional Supplier

  • Increase in innovation: Global vendors in the automation industry have been continuously striving in a highly competitive environment by bringing in more innovative products as well as enhancing their existing product capabilities
  • Increase in M&A activities: The automation industry players are focused on mergers and acquisitions to expand their reach to untapped global markets and increase their product and service portfolio

System Integrators

  • Ensures OEE: An integrator ensures OEE to an end-user when they come in mainly for software integration of all the equipment already procured by the client
  • Innovation in automation: Some of the integrators also take up the responsibility of innovating in areas wherever possible in order to stay competitive. For instance, in 2016, B&R automation upgraded the highly advanced and flexible APROL automation platform by adding a powerful system component for Business Intelligence (BI). APROL includes a PAL library of standardized modular software functions for process engineering tasks

Engagement Trends

  • Most adopted model globally : Sourcing from OEMs, integrators, and distributors
  • Why : To attain cost savings by eliminating manpower across different tasks and maximizing process efficiency
  • Contract length : 2 – 3 years, with an option of maintenance and spare parts services 
  • Pricing strategy : OEMs prefer lump-sum pricing, distributors prefer cost-plus pricing, while the integrators prefer market priced/milestone based/time and material based pricing