Since COVID has hit all sectors and lasts longer than any other crisis, A.I. Group sees it as a challenge and an opportunity for organizational development in strengthening and spreading income among many business groups.

President and CEO of A.I. Group and A.I.Technology Co., Ltd., Mr. Kulchoke Popattanachai has told M Report about the impacts of COVID-19 on the industrial sector, the changes in customer groups, and the future trends.

COVID-19 Effects 

Like many other industrial business operators, the 1.3 billion baht business like A.I. Group has also been affected by the COVID-19 situation. However, it may have more advantages in that its income comes from various businesses and multiple customer groups. The closing estimate for 2020 comes down a bit. It is expected to be at 1.2 billion baht, in which the two superstar businesses in automation and gauge will maintain the same sales. Meanwhile, the revenues from mass production, which mainly produces casting and machining for the auto-parts industry, has been sluggish along with other sub-segments such as plastics and spare parts.

Despite the declining work orders of plastic parts, the plastics group has received 2.5 times more orders for food packaging since April instead. That was when the COVID-19 hit Thailand and so the home quarantine and work-from-home requirements have been greatly increasing the demands for packaging. Up until now, these orders are still likely to grow steadily.

This crisis has led A.I.Group to review its organization and business models to analyze the situation and prepare itself. Businesses that can go on must continue, while those affected by the situation will need to find ways to change their game. Fortunately, the company has a strong, positive, high potential teamwork with readiness for any situation. This crisis is a challenge as well as an opportunity to develop its organization into new businesses.

“As soon as we started to gain a foothold on handling the COVID-19 impacts and ensuring the safety of our internal systems and working capital, we thought if there was anything that we can help the society."

During the peak of COVID-19 situation, many medical equipment such as negative pressure mobile beds and negative pressure rooms were really needed. Our company decided to share our knowledge about industrial production with PTTEP, Osotspa, and the Vajira Hospital medical team to develop prototypes and manufacture these medical equipment that would help to ensure the safety of medical personnel and sent them to more than 200 hospitals nationwide. That was how A.I.Technology started to develop many innovative medical products such as positive pressure masks, negative pressure devices to cover the patient's head for dentists, all of which could be developed to be a business in the future.

Why Automation And Gauge Are Superstars

The COVID-19 situation has spurred the need for automation systems and the need for changes in operations to be more automated. At the same time, gauge is also needed as it is one of the key equipment in measurement for quality control and it goes hand in hand with automation systems to achieve at the end a smart factory with the highest efficient manufacturing system. However, the COVID-19 outbreak has limited many aspects of the work environment. To ensure the safety of everyone’s health, the entrepreneurs could not have large numbers of employees work together. Due to the social distancing measure and some labor shortages, the investment in robots and automation systems from the automotive sector declined, meanwhile, there were demands from new customer groups. With the various solutions as well as knowledge and expertise, A.I. Group was ready to seize these new opportunities. They see it as one of the strengths of the organization with high resilience and as a positive sign for the automation and gauge business groups that will survive with minimum impact from the COVID-19 situation.

In regard to driving the robot industry in Thailand, A.I. Technology has been working with the Center of Excellence in Robotics and Automation (CoRE) and the Office of Industrial Economics (OIE). They can see that the government has real intention to develop the robot industry, but initially there was a delay in some matters. So, such organizations as the CoRE Center and the Thai Automation and Robotics Association (TARA) were established to support the work of many related sectors.

“If we continue to develop it in the right direction, we believe that the Thai robot industry would definitely improve.” 

Trends of Industrial Recovery & Survival of A.I. Group

Currently, the Thai economy has been affected by many factors outside the country. The China-U.S. trade war and the world economic slowdown are the two main factors that directly affect the Thai export sector, while the COVID-19 situation has an impact on the tourism sector. In addition, there are domestic factors, for example, the risks from the drought situation and the delays of the Budget Act for the fiscal year 2020 will affect people's income, which will affect the purchasing power. The declining demand for industrial products resulted in a contraction in the manufacturing sector, not to mention the competitive survival of market players who sometimes try to use price strategies as an additional obstacle.

The COVID-19 outbreak has led to a 40% drop in orders from auto-parts manufacturers, although it recovered nearly on par with orders in August. However, it is possible that these rising orders were the result of long factory closures and production shutdowns. So, they are concerned whether the market could slow down in the next phase or not. They will have to wait and see how the orders in this fourth quarter go or whether it will slow down or increase again. If there is a positive sign, it is possible that sales will continue to recover, possibly with some fluctuations. However, it is clear that the automotive industry has gone through the rock bottom phase and it may take 3-5 years to fully recover. Therefore, it is the moment when auto parts manufacturers have to control their costs and make reasonable adjustments to their investment budgets. With this in mind, A.I. Technology has to find solutions that meet the customer’s needs as well as help to improve production efficiency.

Many industries other than automotive have become interested in automation systems. So they have got orders from new customers, especially those in businesses that have never used automation systems before, such as food, packaging, fertilizers, agriculture, and others that are not affected by the outbreak significantly. It is expected that, ultimately, the demand for automation in industries other than automotive will increase from 30% to 50%.
A.I. Technology has a particular interest in the food industry, which has been affected very little from the COVID-19 situation. It is a fairly large and wide industry that can still expand considerably. So they think it has a promising future. In addition, the investment in robotics and automation in the food sector has been trending upward continuously. Hence, A.I. Technology plans to penetrate the food industry market in the next few years. They are in the process of developing a wide variety of markets and solutions for this industry.

However, in terms of business size, it is obvious that an investment in robots and automation mostly occur in large companies with high purchasing power and readiness to install automation systems as part of their factory. The smaller entrepreneurs may have interests but are not ready either in funding or understanding about the implementation of automation. That is where the A.I. Technology support team step in. As a manufacturer and developer of solutions with expertise and experience, A.I. Technology will be able to help accelerate the deployment of appropriate technologies and solutions that are tailored to customer needs.

Perspectives On Future Technology Trends

Although the trends in robotic and industrial automation may not have changed much, anything that can create efficiency and replace labor like solutions of automated machines and equipment including those in the non-contact forms will be used more since the COVID-19 situation has lowered the labor demands.

The technology dealing with data transmission or vision systems and sensors will replace the labor in the selecting and assorting workpieces. So, it can be expected that these systems along with information management will grow remarkably.

Earlier this year, A.I. has released a new product based on the aforementioned technology trends. It is a CNC Smart Offset, an auto offset system for CNC setting. It is a 4.0 technology measuring tool that combines data systems, real time management, and zero defect dimension to solve the problem of workpieces caused by non-standard workpiece sizes. It measures every workpiece and adjusts the settings of CNC automatically so that every single workpiece has the standard size.
In addition, if the 5G technology can be carried out according to government plans, the development of technology will happen even more quickly. The 5G technology will integrally enable the devices to connect to each other more efficiently and safely. In this regard, A.I. Technology begins to see the complexity of creating and designing solutions that integrate multiple technology components into the automation systems.

Due to all the changes, A.I. Group has to adapt its knowledge and understanding and essentially make some product adjustments including serving smaller-scale customers that start to require sophisticated technology but lack technology experience. It is a challenge to enhance the ability to apply the knowledge of the organization to be flexible and responsive to various business groups. A.I. Group sets goals to flourish in business groups that need solutions of multiple integrations, starting with products that use its current knowledge base and technical base, which is the strong foundation of the company, to advance into new businesses.​