SIKO in Southeast Asia

SIKO Products Asia Pte. Ltd is one of the global subsidiaries of the measurement technology expert, SIKO which is based Buchenbach, Germany. The company was established in 2013 in Singapore to handle the distribution and technical support needs of customers and distributors especially in South East Asia, under the supervision of Mr. Jacky Tan, general manager.

During an interview at ProPak Asia 2018, Mr Tan shared the growth of the company in the past five years and the steps it is taking as it further immerses itself in the Asian market.    

“So far, we started from zero, and it’s not an easy task to start from zero. But we have progressed along the way. We are seeing more awareness in the market using our products. Even though SIKO is a 50-year-old company, we are not yet fully established and known here in the Southeast Asian region, Mr Tan said.

This year, SIKO aims for further growth and expansion in Southeast Asia as it introduces its products and services to different markets.

“For the first five years the company’s main goal was to break even. Meanwhile, we expect growth in the next five years,” he shared. The optimism comes from seeing new developments unfolding in Asia, where market conditions are changing and influenced by mega-trends. The key is in being able to react swiftly to these conditions, according to Mr Tan.

“The company should always be aware of any outside developments and market conditions that could affect our business. The factory must be ready to respond and change plans quickly to avoid potential problems,” he said.

SIKO Products Asia Pte. Ltd team; Mr Jacky Tan, general manager is fifth from left) 

Challenges of growing a business

For companies to grow, it cannot turn a blind eye on how to innovate in the digital age. This is one of the reasons the market is shifting, and becoming more aware of the technologies available to them to stay competitive.

“Everyone is talking about Industry 4.0, this new revolution and everyone wants to change their factories. So, this is one of the challenges that we must monitor and act on,” Mr Tan said.

“The second is market behaviour. Take for example China which has grown and fostered a process of manufacturing upgrades in recent years, and it is now a very competitive market compared to years ago. These are the reasons why companies from Europe come to Asia, factories must be informed of the changes that will later on act as developing signals for the future,” he said.

Industry 4.0 in South East Asia

Industry 4.0 altering the operational effectiveness of manufacturing leaders in Southeast Asia will definitely take place. However, it depends on how one view things.  Mr Tan added that different industries have different views and perceptions of the fourth industrial revolution.

Encompassing artificial intelligence, big data, and cloud computing, Industry 4.0 is a revolution imposing transformation on work division between human and machine – creating smart machines and smart factories. In production, human labour on the one side is assisted by smart devices and machines (human-machine cooperation) and on the other should interact and exchange information with intelligent machines (human-machine collaboration). The ultimate goal is how to identify the data and information found in highly digitalised industrial work scenarios to improve project and process.

“It definitely involves networking, IIoT and information. All the information is in the machine. It’s just that no one is willing to collect all the information and make it useful, Mr Tan said.

Mr Tan observes that in Southeast Asia, there is a lack of understanding about 4.0, and reasons awareness as a key area of opportunity. Despite the plethora of information on Industry 4.0, most companies in the region only know this in theory, and so fail to grasp the full potential of the technology in manufacturing.

“It is very likely that companies are confused. They think that it’s just IIoT, the Cloud and so on. It’s more than data capturing. People are not aware of how it works, they just follow the trend,” he said. “The implementation of technologies, such as artificial intelligence and data analytics to make automation more intelligent and to improve efficiency is still confusing to many.”

He added that the lack of a common standard for 4.0 is a setback hindering the potential of the new technology to improve factories.  

Doing business in Southeast Asia

SIKO is optimistic in making it in Southeast Asia. “We see the market in Southeast Asia as growing. There is still opportunity in this region even though many companies for the past ten years are now focusing on China.

“The Southeast Asia region has Indonesia with its huge population, and is a future market that many European and even American companies are looking at. However, Indonesia is not advanced enough, and it may take time for them to grow and become developed, nonetheless the opportunity is there,” he explained.

Amid all the potential, Mr Tan defines the regional market as not easy to penetrate. “Southeast Asia is composed of 10 countries with different languages and currency; and the challenge is every time you visit, you must cross border and customs. But there is a good future because you can see that people are moving up and becoming highly educated, the income level is also increasing. As a result, consumers and enterprises alike are spending big money on technology."

The key markets for SIKO are Thailand, Singapore and Malaysia as these are also growing markets for high-tech equipment. Meanwhile, Vietnam and the Philippines are strategic markets for the company. “We see a lot of activities going on in Vietnam and the Philippines, but of course both are still dependent on the government driving the economy, and the stability of the political system is another concern.”

Finally, Mr Tan said this diversity is also a of strength of the region. SEA has a trading bloc, in which it can offer a package of different services across the region.