Materials Handling Drives PLC Growth in China

Oct. 1, 2007
PLC Sales to Chinese Machine Builders Will Top $1 Billion by 2011

Shanghai, China—A newly published IMS Research report forecasts that revenues from PLCs sold to machine builders in China will steadily increase to more than $1 billion by 2011, at a CAGR of 16.2%. The materials handling equipment sector is projected to register even stronger growth, with a CAGR of some 21.9%.

“Currently, shipments of PLCs to this sector are much smaller than shipments to the textile machinery, packaging and printing machinery sectors, and were estimated to be worth $19.8 million in China in 2006, or 4.1% of the total PLC market to machine builders,” says Jackey Wang, report author and market research analyst. “However, strong growth is predicted for the materials handling sector over the next five years of between 17% and 28% per year. The production of material handling equipment such as cranes, electronic hoists, conveyors, elevators and escalators has grown very fast in the past three years and this is forecast to continue. Currently, China is a global production base for many consumer and electronic products, which is driving the development of the logistics industry and thus domestic demand for this equipment.”

As automation levels are enhanced, more PLCs will be installed on or integrated within this equipment, explains Wang. “The adoption of PLCs will help to improve the accuracy and efficiency of the material handling equipment and reduce the labor costs of the equipment users. Besides the efficiency improvement, the average cost of PLCs is forecast to keep falling, which helps machine builders make their equipment more competitive at relatively low additional cost by adopting small, compact PLCs.”