The Latin American Factory Automation and Industrial Controls Market is expected to register a CAGR of approximately 8.5% during the forecast period (2021 - 2026). The Covid-19 pandemic scenario has enabled automation to play a vital role across industrial production. Amid situations where industries are operating with limited workforce owing to layoffs, and job losses, deployment of automation is enabling businesses to sustain their production levels with minimum risk and exposure of workers to the COVID-19 pandemic.
- The deployment of automated technologies is expected to enable the industries to ensure that factories/plants continue to operate at a certain level with lower human involvement and remote monitoring of processes. According to Trading Economics, GDP from Brazil's manufacturing sector was BRL 30,267.163 million as of December 2019. However, the GDP from manufacturing decreased to BRL 24,072.83 million in the second quarter of 2020 from BRL 27,686.97 million in the first quarter of 2020. This decrease in the manufacturing sector can be a cause due to the ongoing COVID-19 pandemic.
- The automation industry has always been revolutionized by the combination of the digital and physical aspects of manufacturing, primarily aimed at delivering optimum performance. Further, the focus on achieving zero waste production and shorter time to market has augmented the market's growth.
- Investment in technologies concerning the Industry 4.0 trend is moving up on the list of priorities for manufacturing companies in the region. Mexico is expected to exhibit significant adoption of factory automation and industrial control systems as part of the Latin America region, owing to the growing adoption of automation technologies in the manufacturing sector. The growth can also be attributed to the adoption of Industry 4.0 and smart factory norms across the region's manufacturing sector.
- The region is also witnessing enormous investments for the development of transportation networks, agricultural produce industries, and chemical industries, which have opened considerable opportunities for installing industrial control systems, further increasing the productivity of industries.
Key Market Trends
SCADA Industrial Control Systems to Drive the Market Growth
- Supervisory Control and Data Acquisition (SCADA) systems enable data transfer between a central host system and a number of remote terminal units (RTUs), PLCs, and operator terminals. These systems are used in process automation for applications that include the distribution of power, natural gas, and water pipelines, where there is a need to gather remote data through potentially unreliable or intermittent low bandwidth/high-latency links. These systems are used to automate complex industrial operations, especially where human control is impractical.
- These systems also enable monitoring from devices, including phones, computers, and tablets. Furthermore, they are capable of tracking multiple system parameters, as well as monitoring a multitude of data sources, while exchanging data in real-time. This includes PLCs, databases, maintenance applications, and existing SCADA systems, which are expected to propel market growth.
- Furthermore, with the growing advancement in AI and machine learning, companies such as Siemens, enhance the SCADA offerings. For instance,recently, the company showcased new SCADA products demonstrating the integration of emerging technologies.
- SCADA systems are crucial for industrial processes as they help organizations manage modern demands. For instance, Yokogawa zeros in on SCADA's evolution to deliver high performance, high availability, broad scalability, and platform independence in its SCADA applications. Therefore, organizations also benefit from the company's power and flexibility of Yokogawa's SCADA software (FAST/TOOLS), a comprehensive, fully-integrated SCADA application suite.
Brazil Holds Significant Market Share
- Brazil is the largest Latin American market that dominates the surrounding regions economically and commercially. The country's manufacturing sector is ranked as the third-largest in the Americas.
- Brazil's industries account for one-third of its GDP, in which manufacturing plays a vital role. Most of the large manufacturing enterprises in the country are in the south and southeast regions. Automation companies in the country generally partner with a local distributor, agent, or integrator to complete sales.
- According to Marco Henrique Terra, the Director of the Center for Robotics, Universidade de Sao Paulo, agriculture automation is expected to enable a productivity increase that is critical for the food sector to compete with other countries. Moreover, energy production is also projected to benefit from the use of automation and robotics in offshore oil exploration. It is expected to be among the most sought out solutions in the market.
- Brazil maintains many protectionist policies that create market access barriers to US exports. Tariffs are levied against many imported foreign-manufactured automation products to support domestic automation and industrial controls companies' growth. This results in the establishment of more foreign company plants in the country to fulfill product demand.
- In addition to this, Brazil anticipates leveraging gains of robotics as a manufacturer and a user. According to the International Federation of Robotics, Brazilian robotics imports are anticipated to witness an increase in the coming years, further increasing the deployment of industrial automation and control systems. The country also had an installed base of 4,000 industrial robots, among which the automotive industry accounted for nearly half of the industrial robots sold in Brazil.
The Latin America factory automation and industrial controls market is fragmented due to several players in the market. Players are involved in product development and strategic activities such as partnerships, mergers, and acquisitions. Some of the key developments in the market are:
- June 2020 - Rockwell Automation Inc. and PTC introduced Factory Insights as a Service, a turnkey cloud solution that enables manufacturers to achieve unprecedented impact, speed, and scale with their digital transformation initiativs.
- The market estimate (ME) sheet in Excel format
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