Automation and Robotics Usher In A New Era
Over the past half a century, dynamic advances in automation and robotics have been transforming both business and society. Automation and robotics were initially used to increase productivity on the production floor of factories and utilized simple technologies. Now however, many corporations around the world are transitioning into Industry 4.0, making use of artificial intelligence, big data management, and the Internet of Things (IoT) to seamlessly work together, to exponentially increase both production and productivity.
Rising Automation and Robotics Industry
Both automation and robotics have gained an important foothold in Thailand’s growth and development. Many universities in Thailand offer courses for students interested in this field, with the most specialized course being offered by the Institute of Field Robotics (FIBO) at King Mongkut’s University of Technology, Thonburi.
Many robots developed in-house by universities and private companies, in both the industrial and service categories, have also found use in real world applications. Mahidol University’s Bartlab Rescue Robot, Hive Ground’s Flare Stack Inspection Drone and Zeabus Autonomous Underwater vehicle (AUV), and CT Asia Robotics’s Dinsow Robot are some prominent examples. Given these advances, it is evident that Thai researchers and engineers possess the necessary skills and technical knowhow, and that Thailand is ready to be a hub for investment in these areas.
Thai Marketplace: Opportunities
The International Federation of Robotics (IFR) considers the above two industries to be the two major industries that drive global automation and robotics growth. Since 2010, the automotive industry has considerably increased investments in industrial robots worldwide, with an average sale growth (CAGR) of 27% (2010-2014). As for the electrical and electronics industry, global robot sales increased considerably by 34% (2014) to 48,400 units, reaching a new peak due to the rising demand for electronic products and the need to automate production.
These sales growth numbers signify big opportunities in Thailand as the country is a hub for automotive and electrical and electronics production in ASEAN. Thailand ranked 12th globally for motor vehicle production and 6th for commercial vehicle production in 2015. As for the electrical and electronics industry, Thailand has experienced a 7% growth in export value as measured from 2011, reaching an impressive figure of THB 435 billion (USD 12 billion) in 2015. The country is also renowned for being the second largest global producer and exporter of data storage units like Hard Disk Drives (HDD).
According to FIBO, the import value of machinery related to automation in Thailand is around THB 100 billion (USD 3 billion) per year. This large import figure showcases the high local demand that exists for these products; the investment opportunities here are huge. Currently, many big corporations in Thailand, both private and public, are also actively looking to develop systems related to automation and robotics.
BOI Incentives Encourage Growth
The BOI recognizes the importance of automation and robotics and they belong to the future industries promoted under the Super Cluster category. Examples of activities eligible for incentives in these industries include microelectronics design, embedded system design, and embedded software. Recently, the BOI approved additional activities to expedite investment projects in these future industries. High value-added software development is one of those additional activities and it includes developing system software for advanced technology devices (including business process management) and developing industrial software used to support manufacturing. Investors can apply for general incentives that include an 8-year income tax exemption and import duty on machinery, and raw materials. However, they can apply for incentives under the Super Cluster policy if they meet certain specific criteria and not only get an 8-year income tax exemption, but also 50% Corporate Income Tax (CIT) reduction for 5 years. Non-tax incentives include the right to own land and work permits for expatriates.
Activities that include the manufacture of automation machinery and/or automation equipment with engineering, and the assembly of robots or automation equipment and/or automation parts, are eligible for an 8-year and 5-year income tax exemption respectively, under general incentives. If the projects qualify though under the Super Cluster category, they will get an 8-year income tax exemption as well as a 50% CIT reduction for 5 years.