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Manufacturing Asia is the industry portal serving Asia’s dynamic manufacturing landscape. Each section carries a balance mix of articles which appeal to the C-level executives of large manufacturing companies in Asia.

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FROM THE EDITOR

The machines are in place, the factories are built, but India’s high-tech rollout is stuck—and the running price tag has already hit $15b. Delays in visa approvals for Chinese experts are leaving production floors empty and timelines in limbo. Flip to page 6 to find out what this means for India’s manufacturing ambitions for high-tech sectors like solar power and electronics.

Meanwhile, Malaysia is attracting the same chipmakers moving out of China, but the benefits aren’t fully landing. On page 8, insiders explain why foreign firms continue to sideline local SMEs, and how Malaysia’s failure to integrate into global supply chains could limit the long-term upside.

Outside the chip sector, one company is quietly delivering on green manufacturing. PT Cemindo Gemilang’s carbon injection tech is already live on construction sites, reducing emissions and strengthening concrete at the same time. Details on page 14.

On page 28, we look at how Singapore’s Systems on Silicon Manufacturing Company (SSMC) retrofitted ageing fabs with conveyor-linked stockers—cutting labour costs, saving $849,000 a year, and boosting productivity by 15%.

To top it off, we spotlight the region’s best at the Manufacturing Asia Awards and Asian Export Awards. Turn to page 24 and 25 to meet the companies leading with execution, efficiency, and impact. Congratulations to this year’s winners.

Enjoy reading!

Tim Charlton

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News from manufacturing.asia

Daily news from Asia

The global packaging industry is witnessing a shift towards paperbased packaging, driven by its ease of manufacturing and sustainability advantages over glass and metals. Saurabh Todi, senior research analyst at Frost & Sullivan, said paper recycling is gaining traction as a sustainable alternative.

Silicon Box eases chiplet bottleneck with sub-5-micron tech

In creating chips, designers have the propensity to prioritise manufacturing ease over performance. To eliminate any compromise, Singapore-based Silicon Box has come up with a chiplet integration technology that can expedite chiplet design cycles and reduce the cost of new devices.

Overhead automation enhances safety at GlobalFoundries Singapore facility

GlobalFoundries’ expanded factory in Singapore put up an advanced technology called an overhead automated material handling system. What it does is promote a safe working environment, pacifying concerns about the perceived hazards of manufacturing jobs that often deter potential talent.

Healthcare Packaging expands to Malaysia with 122,000 sqft facility

Oliver Healthcare Packaging plans to open a new 122,000-square-foot manufacturing facility in Johor, Malaysia. The company has entered Southeast Asia to target the large concentration of pharmaceutical and medical device companies operating in Singapore and Malaysia, its media release read.

Oliver

INDIA’S SOLAR CELL MANUFACTURING TO SURGE FIVEFOLD

India’s solar cell manufacturing capacity is expected to reach 50 to 55 gigawatts (GW) by fiscal 2027, up fivefold from 10 GW at the end of fiscal 2024, according to Crisil Ratings.

The expansion will be fuelled by the government’s programmes, such as the “Make in India” initiative that aims to reduce reliance on cell and module imports, it pointed out.

“The expansion will entail a capital expenditure (capex) of INR 28,000 to INR 30,000 crore, likely to be funded through a 70:30 debt-equity mix. That said, healthy balance sheets and robust cash accrual will support credit quality,” the ratings agency said.

India’s solar module capacity surged to 60 GW in March 2024 from 7 GW in 2020, reducing imports to 25% of consumption from 45%.

Meanwhile, cell imports, mainly from China, remain high at around 80%.

“With domestic cell supply inadequate, import dependence could rise given likely renewable capacity addition. Crisil Ratings expects 60 to 65 GW of solar capacity to be added over the two fiscals by 2027,” it noted.

Self-reliant production

Increased cell production capacity will boost self-reliance and integration, according to Crisil Ratings. For example, manufacturing cells domestically allows India to capture 70%-80% of module costs within the country, compared to just 40%-50% without domestic cell production.

At current price levels, the locally manufactured cells are expected to be 80%-90% pricier than imported ones because of the higher conversion cost of wafers to cells, given the lower economies of scale in India initially and dumping by China.

“Therefore, continued policy support in the form of non-tariff barriers such as [Approved List of Cell Manufacturers] and [Approved List of Models and Manufacturers] is crucial to prop up demand for domestically manufactured cells and modules,” Crisil said.

India factory delays tied to visa restrictions

REGULATION

India’s manufacturing sector is facing setbacks due to visa restrictions for Chinese technicians, causing delays in high-tech production units and affecting billions in investments. The delays have raised concerns amongst manufacturers who rely heavily on Chinese expertise to operate and maintain advanced machinery, experts said.

Ravi Krishnaswamy, senior vice president of Energy, Sustainability, and Industrial Practice at Frost & Sullivan, said the challenges in the Indian manufacturing industry are compounded by various factors, including supply chain disruptions and logistical bottlenecks.

However, a critical issue is the delay in the approval of visas for Chinese technicians, who are essential for the functioning of high-tech machinery in industries like white goods, solar panels, steel, and electronics.

“India’s manufacturing sector

heavily depends on Chinese machinery in certain high-tech sectors like electronics, steel, solar panels, white goods, etc. And these require Chinese technicians, both for operations and maintenance,” Krishnaswamy said.

“Since 2020, both because of COVID and also some border skirmishes, we have seen the Indian government delay visas, and the production losses have amounted to about $15b.”

The absence of these skilled technicians has led to significant disruptions in production schedules, affecting the revenue of major manufacturers and delaying India’s ambitions to become a global manufacturing hub.

Economic reliance

Naina Bhardwaj, international business advisor at Dezan Shira and Associates, said, “Despite the many restrictions that the Indian government has been trying to impose to reduce its economic dependence, it’s still heavily reliant on Chinese imports, especially when it comes to capital, good equipment, and high-precision machinery.”

“In order to call these Chinese technicians to come to India, install the necessary machinery, or maybe undertake repairs and train the local workforce; we are required to streamline the process so that the visas are fast-tracked,” she added.

Balancing economic needs

As India grapples with manufacturing delays, it must carefully balance reducing economic reliance on China whilst simultaneously addressing its pressing manufacturing demands and supply chain challenges.

“India definitely wants to elevate its position to be probably a global supply chain, a middleweight partner of choice,” Krishnaswamy explained.

“Whilst the current deficit is in favour of China or against India, I think India will do all it takes to kind of at least move towards the middle ground very soon.”

Bhardwaj also pointed out the dualedged nature of the situation, where granting visas could both ease tensions and expose India’s reliance on China.

“Granting approvals to the Chinese nationals will definitely open a channel for communication, but at the same time, I believe this will also expose India’s dependence to the Chinese,” the Dezan Shira and Associates advisor told Manufacturing Asia.

The production losses have amounted to about $15b

Ravi Krishnaswamy

Naina Bhardwaj

Malaysia gains as foreign firms exit China factories

Foreign companies are moving their manufacturing facilities out of China to establish production hubs in other countries as trade tensions continue to brew between China and the US, experts said.

Malaysia, the world’s sixth largest exporter of semiconductors in the world, has greatly benefited from this strategy known as China Plus One, where companies diversify their business outside of China.

Malaysia has a 50-year edge in the sector given that Intel established its first international manufacturing plant in the northern state of Penang. Intel is also building another

factory in Penang that will be the US chip giant firm’s overseas facility for advanced 3D chip packaging. Malaysia is well placed as semiconductor and EV firms shift to Southeast Asia to bypass trade curbs and secure supply chains. Penang and nearby Kulim, Kedah, offer an existing tech hub, giving companies an alternative as US-China tensions escalate over advanced technology.

Tech investment surge

Malaysian Prime Minister Anwar Ibrahim has been actively seeking high-tech investments by travelling

overseas to build relationships with potential investors. In a keynote address at the SME Future Day 2024, he invited German businesses and companies across Europe to invest in Malaysia, emphasising the country’s strategic location for accessing the Chinese market.

Stiff competition

Foreign direct investment in Malaysia’s tech sector has been steadily increasing since 2021, with major companies like Intel, Infineon Technologies, AT&S, and Nvidia making significant investments there. However, as Malaysia aims to move up the value chain, it faces challenges such as stiff competition from neighbouring countries like Indonesia and Vietnam, as well as constraints in local supply chains.

We’ve seen examples of how some Chinese companies who have come into Malaysia in the past, they do not fully integrate with the local supply chain

Former Deputy Minister of International Trade and Industry, Ong Kian Ming, highlighted that there are challenges with getting the right kind of human resources and skilled labour to become part of the higher value-added manufacturing or services ecosystem.

“We’ve seen examples of how some Chinese companies who have come into Malaysia in the past, they do not fully integrate with the local supply chain,” he stressed.

“What this means is that the local SMEs (small- and medium-sized enterprises) in Malaysia and other companies are not able to benefit from the FDI coming into the country, he pointed out further.

THE CHARTIST: AI DRIVES RECORD REVENUE FOR SEMICONDUCTOR MARKET

The strong demand for AI-related chips, especially High Bandwidth Memory (HBM) crucial for AI Graphics Processing Units (GPUs), has driven a record-breaking revenue for the semiconductor market in 2024.

The annual revenue increased by approximately 25% to $683b, as reported by Omdia’s Competitive Landscaping Tool.

This significant growth was primarily driven by strong demand for AI-related chips, especially HBM. The memory segment experienced an impressive 74% year-over-year growth, aiding the overall market recovery following a difficult 2023.

Despite this record-setting performance, there were mixed outcomes across different sectors of the industry. The data processing segment saw robust growth, whilst other key areas—automotive, consumer, and industrial

semiconductors—faced declines in revenue during 2024. These struggles reveal underlying weaknesses in what otherwise appears to be a booming market, according to

AI and memory propel a strong 2024 Throughout 2024, AI influenced the semiconductor scene, driving record revenues and altering industry dynamics. NVIDIA emerged as the leading player, climbing the market share rankings due to substantial revenue growth spurred by its AI GPUs. HBM, an essential component for AI applications, also surged, which greatly increased revenues for memory companies. Whilst HBM growth outpaced other Dynamic Random Access Memory segments, improved supply-demand conditions led to higher average selling prices and revenue gains across the broader memory market.

The Samajaya Light Industrial Zone in Sarawak houses major semiconductor plants

Omdia.

revenue Source: Omdia - Competitive Landscaping Tool

Ong Kian Ming

WHAT

ROLE WILL MANUFACTURING PLAY IN MCKINSEY’S $48T VISION?

McKinsey named 18 sectors as “arenas of tomorrow” industries set to reshape the economy and generate up to $48t in revenue by 2040.

Source:

Why other industries considered might not emerge as arenas of tomorrow

How certain industries might emerge as arenas of tomorrow

The 18 potential arenas of tomorrow could contribute a third of global GDP growth.

The 18 potential arenas of tomorrow could generate $29 trillion to $48 trillion in revenues and $2 trillion to $6 trillion in profits.

McKinsey Global Institute

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FACILITY WATCH: SEMEN MERAH PUTIH

Semen Merah Putih prioritises use of renewable energy and alternative fuels

In 2023, the cement factory in Bayah reduced CO2 emissions by 5% and generated 85,702 MWh of electricity.

Indonesia’s target for carbon neutrality by 2060 has put the industrial sector, which accounts for about 22% of the country’s greenhouse gas emissions, to work.

PT Cemindo Gemilang Tbk, producer of Semen Merah Putih brand cement, emerges as a proactive force in helping the government achieve its zero carbon ambitions.

Launched in 2012 to later become the third-largest seller of cement in Indonesia, the company now prioritises increasing the use of renewable energy and alternative fuels across all its operations.

With a production capacity of 6.4 million tons of clinker and 11 million tons of cement yearly, the company operates nine plants serving 17 provinces in the country.

In 2022, Semen Merah Putih became Indonesia’s largest clinker exporter through its Bayah, Banten plant. That year, they also introduced Semen Merah Putih Watershield, the

first PCC (Plain Cement Concrete) cement with Water Repellent technology, enhancing building quality in Indonesia.

Oza Guswara, general manager for Sales & Marketing of PT Cemindo Gemilang Tbk, said Semen Merah Putih is committed to becoming a global company focused on innovation and excellence in building materials.

Part of this push is to implement socially and environmentally responsible production practices and aim to improve HSSE (Health, Safety, Security, and Environment) quality for sustainable benefits to society and the environment, he added.

Strategically, the firm continues to optimise innovation and technology through the use of alternative fuels in production processes.

Reducing emissions

Through investments in environmentally friendly technology

This step is expected to decrease CO2 emissions whilst optimising the use of WHRS to generate environmentally friendly electricity

and sustainable practices, Semen Merah Putih’s Bayah plant reduced net specific CO2 emissions by 5% in 2023 compared to 2022, from 633 kg to 603 kg of CO2 per tonne of equivalent cement.

This means each tonne of cement produced in 2023 emitted 30 kg less CO2 than the previous year.

Oza explained that to reduce dependence on fossil fuels and shift to more sustainable energy sources, the Bayah plant had also increased the installation of Alternative Fuels Feeding (AF) in Kiln calciners to raise the Thermal Substitution Rate (TSR) to 5% in 2024.

This improvement was expected to achieve a 70,000-tonne reduction in CO2 emissions, as more energy is sourced from alternative fuels like biomass or RDF (Refuse-Derived Fuel), replacing conventional fossil fuels such as coal or natural gas in cement production.

Generating electricity

Energy-wise, the Waste Heat Recovery System (WHRS) usage had also been optimised to convert waste heat into electricity, producing 85,702 MWh in 2023.

“Semen Merah Putih has demonstrated a strong commitment to reducing dependence on fossil fuels and transitioning to more sustainable energy sources,” said Oza.

“This step is expected to decrease CO2 emissions whilst optimising the use of WHRS to generate environmentally friendly electricity.”

He added, “The company also continues to innovate in product development, focusing on reducing clinker usage to enhance operational efficiency and sustainability.”

Companies are also investing in electric trucks and forklifts to cut CO2 emissions, Oza told Manufacturing Asia. Semen Merah Putih aims to cut carbon emissions through alternative fuels, energy efficiency upgrades, and eco-friendly products.

The company’s Bayah plant reduced net specific CO2 emissions by 5% in 2023

INDONESIA

Oza Guswara

ESL and Aseptic Packaging

Bottle cap sterilization has never been safer as with Serac’s BluStream module

The aseptic packaging specialist offers a new sterilization technology, combining the highest levels of efficiency and safety for consumers, operators, and the environment.

Serac’s BluStream cap decontamination module requires only 3 square meters of floorspace and can be integrated on new Serac lines as well as on existing machines, whatever their OEM. It is intended for high-acid as well as low-acid beverages and is able to treat up to 900 caps per minute.

BluStream: a physical, dry treatment carried out at room temperature

Serac’s BluStream module uses the low-energy e-beam technology. Electrons are thrown all over the surface of the cap and quickly destroy microorganisms by breaking their DNA chains.

Electrons do not penetrate the treated material and thus do not affect the internal structure of the cap. As treatment is carried out at room temperature, it avoids risks of distortion that could alter caps’ behavior upon screwing.

BluStream treatment is, nevertheless, highly efficient since it ensures a 6-Log bacteriological reduction inside the cap in only 0.3 to 0.5 second. This efficiency level makes BluStream suitable for aseptic packaging and high outputs.

BluStream: Safer for consumers Unlike APA and H2O2 solutions, BluStream uses no chemicals. It also makes sterilization easier to monitor with only 3 critical parameters: voltage, current intensity, exposure time.

Bacteriological reduction is ensured as soon as the cap has been exposed to the necessary dose of electrons yet, this dose depends on perfectly controllable parameters and can be monitored in line through a simple dosimetry test. Sterilization is confirmed in real time, which is not possible with chemical laboratory tests. Combined together, these 3 features reduce the risk that a cap contains chemical residues, receives insufficient treatment and/or is not detected as faulty.

BluStream: Safer for operators

The BluStream module is quieter than conventional sterilization units.

The operating environment is also very comfortable due to the absence of chemical odors. The BluStream module only generates ozone, which is extracted outside the factory walls. Ozone is quickly and naturally depleted in the environment and leaves no trace.

BluStream: Safer for the environment

The BluStream module also brings environmental benefits. As a chemical free treatment, it does not generate toxic effluents. In addition, it requires neither water nor heating or steam, it has a lower demand in energy and water than conventional sterilization methods.

BluStream offers beverage manufacturers a perfectly safe, real-time monitored and environment-friendly solution, for continuous cap sterilization at high outputs.

BluStream treatment can be applied on any type of cap (HDPE, LDPE, PET, PP, aluminum), and whatever the bottle size.

The BluStream cap sterilization module will be displayed on Serac’s stand at some of the shows in Europe. It’s a good opportunity to Serac to unveil new developments that extend the benefits of BluStream sterilization to bottles.

Contact :

Serac Asia Sdn Bhd

Hamodal Industrial Complex, Unit B1, Block B, Lot3, Solok Waja 3, Bukit Raja

Industrial Park, 41050 Klang, Selangor, Malaysia

T. : + 60(3) 86053690

F. : + 60(3) 86053697

C.: + 60(1) 77306698

M.: calley.kon@serac-group.com

www.serac-group.com

BluStream module for caps

How is PT SNI using lightweight concrete to expand in South Kalimantan?

The company’s diverse product range meets market demands, producing 753.34 tons per day.

PT. Sinar Nusantara Industries (PT. SNI) expanded into South Kalimantan, focusing on the use of Autoclaved Aerated Concrete (AAC). This move is designed to meet the growing market demand for advanced building materials and reinforces PT. SNI’s position as a leader in sustainable construction solutions.

AAC is a lightweight, precast material made from natural raw materials, including sand, lime, cement, water, and a small amount of aluminium powder. This mixture is cured in a high-pressure steam chamber, known as an autoclave, which creates a porous, aerated structure offering numerous benefits over traditional concrete.

The product aligns perfectly with the increasing demand for sustainable building materials. “The implementation and certification of SNI is part of our commitment to providing safe and high-quality products to our customers,” said PT. SNI’s CEO Selvi Chrisinda

With its low carbon footprint and high energy efficiency, AAC meets the growing expectations for eco-friendly construction solutions. “By integrating AAC, we not only reflect our commitment to environmental responsibility but also enhance our appeal in a market that values sustainability,” Selvi noted, pointing to the benefits.

The material offers significant cost efficiencies in construction. Its lightweight nature reduces transportation and handling costs, whilst its ease of installation leads to lower labor costs and faster project completion.

Diversification

Incorporating AAC into PT. SNI’s product range allows the company to cater to diverse construction needs. The introduction of Citicon Lightweight Bricks and Citicon Floor Panels addresses various market segments, including residential, commercial, and industrial applications.

“Our diversification mitigates risks associated with reliance on a single product line and opens new revenue streams,” Selvi went on to highlight.

Moreover, AAC’s superior thermal and acoustic insulation, fire resistance, and durability further enhance PT. SNI’s competitive edge in the market.

“We provide external training to employees on SNI and implementation methods, ensuring that our team understands and applies these standards effectively,” the CEO added whilst talking about their approach.

Strategic benefits

AAC brings strategic benefits in meeting evolving regulatory and certification standards. The material’s compliance with SNI certifications and ISO management standards ensures PT. SNI exceeds industry expectations.

“The SNI ISO 9001:2015 certification is an achievement for our company and lays a strong foundation for continuous improvement in the quality of our products and services,” said Selvi about the firm’s credentials.

The introduction of AAC boosts PT. SNI’s brand

image, strengthening its reputation as a forward-thinking, responsible construction industry player.

Selvi noted that holding SNI certification increases market competitiveness. “It helps us compete with companies that do not have similar certification and enhances consumer confidence in our products,” she said.

This strategic positioning attracts clients and partners who value sustainability and innovation, contributing to increased market share and brand loyalty.

Long-term growth

AAC’s versatility aligns with PT. SNI’s long-term growth strategy, allowing the company to adapt to diverse construction needs—from high-rise buildings to residential complexes—whilst staying responsive to market trends and demands.

“AAC’s flexibility helps us maintain a competitive edge in a dynamic industry,” the executive said.

AAC’s flexibility helps us maintain a competitive edge in a dynamic industry

Investing in AAC aligns with PT. SNI’s vision for sustainable and strategic growth. The material’s durability and low maintenance requirements ensure long-term performance and reduced lifecycle costs for end-users.

“Our focus on AAC helps us establish a reputation for delivering high-quality, reliable products that drive customer satisfaction and repeat business,” concluded Selvi.

Selvi Chrisinda, CEO at PT. Sinar Nusantara Industries

INDONESIA

A trusted partner for millions of customers, Ecolab (ECL) is a global sustainability leader offering water, hygiene and infection prevention solutions and services that protect people and the resources vital to life.

INSTITUTIONAL

INDUSTRIAL

HEALTHCARE/LIFE SCIENCES

CONSTRUCTION

PT Cemindo Gemilang upgrades plants as cement demand rebounds

Its carbon injection technology strengthens concrete whilst cutting carbon emissions.

PT Cemindo Gemilang Tbk is expanding its cement facilities in Indonesia after launching its carbon injection technology from its Canadian partner, as it seeks to boost growth amidst the nation’s resurgent cement and building industry.

“In Jakarta, this technology helps curb pollution by absorbing CO2 directly into the concrete,” Akhmad Syamsuddin, operational director at PT Motive Mulia, a unit of PT Cemindo Gemilang, told Manufacturing Asia in an interview.

The company’s carbon injection technology is provided by CarbonCure Technologies, a Canadian green technology company.

The process, in which captured CO2 is injected into fresh concrete, where it mineralises and becomes permanently embedded, not only reduces carbon emissions but also strengthens concrete structure, according to the director.

“The chemical reaction during this process increases concrete density, making it stronger and more durable,” Akhmad pointed out.

Industry movements

There has been resurgent activity in Indonesia’s cement sector after the COVID-19 pandemic reduced demand, according to Asian Insiders. The Southeast Asian nation’s cement industry contributes about 5% to economic output and employs as many as a million people, it said.

PT Cemindo Gemilang, which makes the Semen Merah Putih cement brand in Indonesia, also operates in Vietnam through unit Chinfon Cement Corp. In Indonesia, it has an integrated cement plant that is supported by a deep sea port facility in Bayah, Banten.

It has high-end grinding plants in Java, Sumatra, and Kalimantan, where the company operates a fully equipped cement terminal that can reach all its markets.

PT Cemindo Gemilang’s carbon injection technology, which reduces

cement consumption by up to 4%, has been implemented in various projects. These include the construction of Sinar Mitbana Mas’s Club House within the Hiera township development in BSD City in Jakarta.

The project shows how low-carbon concrete innovation can be integrated in green development.

“Hiera township development is built on sustainability principles, including the adoption of environmentally friendly construction technology,” Ferianda, Technical Planning Department head at Sinar Mitbana Mas, said.

We are seeing a positive trend where more construction partners are transitioning to green concrete

Surindro Kalbu Adi, director of Commercial and Logistics at Semen Merah Putih, said sustainability is a core business principle integrated into all their units—upstream for Semen Merah Putih, and downstream for concrete brand Beton Merah Putih.

In the upstream business, Semen Merah Putih uses sustainable practices such as waste heat recovery units and environment-friendly fuels.

“The implementation of carbon injection technology for Beton Merah Putih is an innovation to meet market demands,” he added.

Challenges

Akhmad said the biggest challenge is the cost of equipment and CO2 distribution at each plant. To address this, Beton Merah Putih plans to install carbon injection systems across all its plants to reduce costs.

“We are seeing a positive trend where more construction partners are transitioning to green concrete,” he noted about the market. “We hope the positive impact of this technology continues to expand across various strategic projects.”

The carbon injection tech cuts cement usage by 4% (Photo from PT Cemindo Gemilang)

REPORT: CLEANTECH

Clean energy technology spending to surpass upstream oil and gas

Clean energy technology

spending is set to reach $670b in 2025—surpassing upstream oil and gas for the first time— with solar photovoltaic accounting for half of cleantech investments, according to an S&P Global Ratings report.

This is driven by a significant increase in solar energy capacity, with at least 620 gigawatts of solar and

wind capacity coming online in 2024. Battery energy storage systems will also surpass pumped hydro storage in installed capacity, it added.

“This massive build-out will require an estimated $640b, matching the projected spending on upstream oil and gas, including LNG liquefaction and pipelines,” the report read.

China’s oversupply

However, it noted that the oversupply of cleantech equipment from China is exerting significant pressure on international markets, particularly in the solar, wind, and battery sectors.

Over the past two years, the rapid expansion of cleantech supply chains has outstripped market demand, leading to substantial price declines in 2023 and 2024, according to S&P.

Whilst price drops are expected to moderate in 2025, the effects of oversupply will still be felt especially in energy storage systems where there is fierce competition to suppress prices.

“In response to the oversupply challenge, China has initiated rationalisation efforts aimed at controlling manufacturing expansions and increasing barriers to entry for new competitors. Many planned expansions in the first half of 2024

have been delayed or scrapped altogether, reflecting a strategic pivot in the industry,” S&P said.

Currently, data centres account for around 200 terawatt-hours or 35% of the total estimated global corporate clean energy procurement, which will soar in the next five years.

Moreover, S&P reported that artificial intelligence (AI)-based trading applications are becoming more prevalent as they can mitigate risks associated with substantial discrepancies—up to 700%—between forecast and actual generation.

S&P said that by employing predictive modelling techniques and machine learning, AI is being utilised to develop advanced weather forecasting tools, enabling more accurate price predictions along with automated trading strategies. According to Deloitte, with the possibility of policy and regulatory changes following the United States elections, companies may employ a “wait and see” approach in 2025. Additionally, further rate cuts expected from the Federal Reserve could fuel increased investment in clean technology products.

However, oversupply of cleantech equipment is exerting pressure on global markets

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Four ways manufacturers can rethink location strategy

Global supply chain concerns spur a shift to regionalisation and sustainability.

Manufacturing locations are now more critical than ever, affecting a company’s cost efficiency, resilience, adaptability, and ethical integrity, according to a report from Arthur D. Little.

This is due to a mix of the weakest global economic growth in decades and recent challenges—including conflicts in Europe and the Middle East, tensions between the US and China, and global banking instabilities. Consumer demands for transparency around product origin, environmental impact, and labour practices have also put supply networks at risk and affected profitability and recovery.

Strategic approach

Arthur D. Little told manufacturers to rethink their location decisions by focusing on four steps that impact the areas of cost efficiency, resilience, adaptability, and ethical integrity.

The first step manufacturers should take is to map their current state. This involves analysing existing facilities, locations, and operations. Key aspects to examine include cost structure, production capacity, outgoing logistics, inventory and lead times, competitive landscape, and growth opportunities to pinpoint improvement areas.

Next is to define future ambitions. Aligning the supply chain with the company’s vision, values, brand, and reputation is crucial. This includes adhering to sustainability policies and meeting ESG (Environmental, Social, and Governance) demands.

According to Arthur D. Little, supply chain efficiency drives cost savings, faster operations, and proximity to demand. As supply chains localise, sustaining productivity is crucial for market competitiveness.

Taking stock

The third step is gradual improvement, requiring ambidexterity—balancing immediate needs with future growth.

Manufacturers can achieve this by identifying quick wins, such as optimising logistics or cutting inventory costs, whilst crafting detailed roadmaps for long-term growth and efficiency.

The final stage is to develop business cases and roadmaps. This ensures that the updated manufacturing footprint aligns with the company’s overall business objectives and ambitions.

The final step integrates strategy, risk, sustainability, and efficiency. A cost-benefit analysis is key to

balancing short-term gains with longterm value whilst adapting to market shifts and regulations.

The primary reason for reassessing manufacturing footprints, according to Arthur D. Little, is to fully understand the true cost of a globalised network, considering both direct and indirect expenses.

Outsourcing to low-cost countries, once driven by cheap labour, is losing appeal as wages rise and automation becomes more viable.

The COVID-19 pandemic exposed hidden supply chain costs, averaging 6% to 10% of annual revenue, prompting firms to regionalise operations.

Sustainability demands and automation trends also shape manufacturing location choices. Ensuring supply chain resilience and mitigating risks adds further urgency to reassessing footprints.

The COVID-19 pandemic, the Suez Canal blockage, and the semiconductor chip shortage highlighted the fragility of global supply chains, resulting in financial losses and strained customer relations.

As a result, 60% of executives have shifted their focus toward resilience and risk mitigation, with many planning to relocate supply chains closer to customers.

Nearshoring

Nearshoring has emerged as a key strategy, enhancing operational resilience by reducing geographical distances, improving supply chain visibility, and strengthening control over production processes.

This approach supports quicker market adaptation whilst also building more reliable customer relationships in an increasingly volatile global environment, the report said.

The third reason for reassessment is to adapt to customer sentiment. Today’s consumers, particularly Gen Z, are increasingly focused on ethical and sustainable practices, pushing companies to prioritise values over mere business efficiency.

A Swedish Trade Federation survey found 70% of Gen Z avoid brands that do not match their ethical principles, whilst 73% stay loyal to those that align with them.

Many firms are opting to relocate supply chains closer to customers

Manufacturing Asia 2025