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MD's Musings
Welcome to the October Issue of Update
Wanted: An Australian Chamber of Process Automation
Paging through my favourite 4WD magazine recently, I came across a chart indicating the
August 2008 unit sales of all 4WD vehicles in Australia. Based on data published by the
Federal Chamber of Automobile Industries, the information was categorised by vehicle type
and manufacturer.
This prompted me to think about the local Control and Instrumentation (C&I) industry. What
are the relative market shares of the main vendors? What are key trends in the industry? Is
the market in Australia shifting from DCS to PLC, or vice versa?
I certainly do not have answers to any of these questions and I’m certain no one else does
either. Apart from guestimates and so-called informed opinion, the C&I industry in Australia
operates in the dark.
This is especially poignant considering that the global market for automation and process
industries has witnessed tremendous growth. We do know that the industry worldwide grew at a
rate of 9.5 to 9.8 per cent in 2007 and 2008. We also know that the huge and growing demand
from China and India is fuelling an unprecedented demand for resources such as iron, coal,
nickel, oil and gas.
Companies in the industrial, mining and manufacturing sectors are implementing increased
automation to enhance safety, reduce manpower costs and improve the quality and reliability
of processed products. If every bottle of ketchup produced at a plant is to have the same
consistency, the process requires more measurement and control than ever before.
The other factor boosting control and instrumentation is the significant shift from mass
marketing to a market of one. ‘You can have the Model T Ford in any colour as long as it is
black,’ was one of Henry Ford’s most quoted phrases. But such mass market approaches may no
longer succeed as personalisation is key – from our coffee to our fuel. One can walk into a
café and order a weak, skinny, decaf latte that’s not too hot. Soon we will able to drive
into a fuel station and fill up with an individual, self-created blend of 12.5 per cent
ethanol and 87.5 per cent unleaded petrol. All this translates to an increased need for
automation and more sophisticated process instrumentation.
The global C&I industry is alive, well and growing at a rapid rate. And this brings me back to
the state of the industry in Australia. We know next to nothing about the status and health of
our industry as suppliers operate in isolation bereft of any market intelligence whatsoever.
The solution to resolving this information vacuum is fortunately, very simple. Set up an
Australian Chamber of Process Automation that effectively represents the interests of member
companies. Looking back at recent developments we can immediately see the positive impact
the existence of a C&I Chamber might have made. We may have anticipated the current skills
shortage a decade ago, and have been better prepared today. With a Chamber, we would have
worked together in introducing the new IEC Ex standards in a more pragmatic way. We would
have cooperated and lobbied for a reduction in import duty on certain tariff categories. We
could have produced salary guidelines and avoided overpaying for skilled staff.
These aren’t flights of fantasy. In fact, this cooperative industry approach has been adopted
in most other countries. The Industrial Instrumentation Group (IIG) in South Africa brings
together, two or three times a year, senior executives of that country’s C&I companies. On
the agenda are trends, salaries, skills shortage and IEC. Every third year, IIG members
commission, and pay for, a comprehensive industry survey to determine market trends.
A similar Australian Chamber of Process Automation will benefit both suppliers and consumers.
Price reductions, harmonised safety standards and even an Interkama Australia exhibition. Am
I dreaming?
We did have an industry association many years back but, unfortunately, the word ‘collusion’
happened to be mentioned and the group hastily disbanded. It is akin to alleging that Ford
and Holden are ‘colluding’ by sharing market information.
At the November Tabletop exhibition, no less than 48 vendors have signed up to exhibit. We
know that Australia has an automation industry that is large and competitive enough to
rubbish any talk of collusion.
I extend an invitation to my fellow C&I executives and professionals to come together and set
up a Chamber or Association that will benefit the industry and every participating company.
If we know the market we can grow the market.
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