On March 19, 2021, the 14th China International Battery Technology Fair ("CIBF 2021"), the largest exhibition in the international battery industry, took place at the Shenzhen Convention & Exhibition Center. Festo, a world-leading supplier of automation components, made its debut at the CIBF 2021 and demonstrated its automation solutions for battery manufacturing at Booth G013, Hall 1, Shenzhen Convention & Exhibition Center.
Chen Hong, Vice President of Automation Sales, Festo BRGCN, said, "The lithium battery industry in China is far ahead in the world, be it production or application. Besides, the lithium battery industry tends to be more flexible and customized, and has higher requirements for stability, which brings huge business opportunities for automation component suppliers."
Huge demand for automation in new energy market in China
The latest data shows that in the first two months of 2021, China's production demand continued to recover, market dynamics continued to improve, and the economy maintained resilient growth, extending the recovery story since the second quarter of 2020.
The emerging market in China, represented by new energy, is also booming. Taking the shipments of lithium batteries as an example, in 2020, the global lithium battery shipments reached 294.5 GWh, of which 158.5 GWh was in the Chinese market, accounting for 53.83% of the global lithium battery deliveries.
Looking ahead, it is believed that the global lithium battery industry will reach the TWh scale by 2025. In other words, the lithium battery market will achieve a compound annual growth rate of nearly 30% from 2021 to 2025.
The players in the lithium battery industry in China are expanding their production capacities substantially, for example, BYD, China Lithium Battery Technology, Guoxuan High-Tech, SVOLT Energy Technology, and Eve Energy. Contemporary Amperex Technology Ltd has invested more than CNY 100 billion in production capacity expansion in the past year.
Great demand for equipment comes with the expansion of production. The published information shows that CATL alone has issued orders to more than 10 equipment manufacturers within a short period of time, while the demand of CATL is expected to further increase.
Meanwhile, production lines increasingly require higher levels of automation. This is mainly caused by two factors. First, the labor cost is getting higher; second, products need to be more consistent to facilitate yield improvement.
Facing such tremendous development opportunities, how to help customers improve quality and reduce costs becomes the key point for Festo to help customers in the battery industry to seize market opportunities.
Industry-oriented, Festo to boost emerging markets with proven experience
From the perspective of the degree of automation, the automation requirements vary from industry to industry in China, and the emerging lithium battery industry has strong attributes of its own.
In this context, Festo, a global independent family company founded in 1925 that provides automation technology and technical training solutions to more than 300,000 customers worldwide, will boost the development of automation in various industries in China, especially in emerging industries.
Chen Hong, Vice President of Automation Sales, Festo BRGCN, said, "We hope to share some proven experience with manufacturers and help them from the automation perspective, so that they can focus more on breakthroughs of core technologies and processes of their products, thereby reflecting where the value of Festo lies. In addition, we also hope to participate in the development of relevant standards for some emerging industries, and offer some suggestions to the best of our ability."
As an industry-oriented company, Festo actively develops automation products suitable for lithium battery production in order to provide better services to players in the lithium battery industry. With nearly 100 years of proven experience in automation, Festo has introduced a wide range of solutions for the lithium battery industry to facilitate the evolution of its players towards automation and digitalization.
In order to strengthen the interaction with the lithium battery industry, Festo attended the CIBF 2021 in Shenzhen from March 19 to 21 with a wide range of automation and digitalization solutions and customized products for the industry.
Zhou Lei, ISM, New Energy Sector, Festo BRGCN, said, "Festo's participation in CIBF 2021 mainly delivers value in three aspects. The first is innovation. As an emerging industry, the lithium battery industry does not have much established business experience. Festo, as a partner of the industry, can boost its development with proven automation applications. Festo will launch suitable products on demand and in time, which is Festo's innovation aim. The second is value, which does not equal price. These are two completely different concepts. For a brand new market, Festo uses its rich experience in product applications to provide more valuable information to the lithium battery industry by looking for inter-industry references that can be learned and shared. The last is globalization. Festo, as a global automation partner, is able to offer globally uniform technical services and responsiveness, and support Chinese companies to go abroad."
Crossing the threshold of digital transformation with high value and innovation
In the face of the fierce market competition, price has always been an inevitable topic, and the concept of "cost effectiveness" has long been ingrained.
Chen Hong said, "What Festo focuses on is the total cost of ownership of a product, not just the selling price. We believe that a product involves not only the price for purchasing it, but also the hidden costs such as the use cost, time cost, and maintenance cost. In this sense, Festo's products are highly cost effective and can bring great added value to their users."
Due to high technical barriers and rapid development of related technologies, the automation and digitization technologies for the lithium battery industry require continuous iteration and innovation. When upgrading technologies, some companies need to upgrade their equipment holistically, which can easily lead to cost wastage due to over-investment. To address this particular industry pain point, Festo has enabled the flexibility to upgrade on its products. For automation and digital transformation, a company only needs to flexibly add corresponding upgrade products and solutions (e.g., fieldbus and industrial Ethernet devices, IO-Link, innovative AP communication architecture, and IoT) to achieve seamless upgrade, or it can use Festo MSE6 series energy efficiency modules and the "one valve for multiple uses" Motion Terminal VTEM to complete digital upgrade in one step. These products can meet the future needs of highly flexible and adaptive automation control and are already well proven in industries such as automobile, food and electronics. On top of that, Festo's automation products also allow remotely monitoring equipment conditions and diagnosing equipment faults by means of cloud-based interconnection. They can also realize Industry 4.0 smart manufacturing application scenarios such as predictive maintenance with the support of the artificial intelligence technology. In this way, they can truly empower companies to realize a comprehensive digital transformation and upgrade from On-Premise to On-Cloud.
Furthermore, Festo Didactic offers consulting and training services related to automation equipment. To cross the threshold of intelligent and digital transformation, Festo has set up an open innovation experience center, where customers from all industries are welcome to join discussion, spark inspiration and inspire innovative applications.
Building a second local market through service localization
While continuously optimizing the cost effectiveness of products, Festo has accelerated the implementation of its localization strategy and established complete and comprehensive local supply chains, so as to fully fuel the Chinese market with more flexible and efficient services.
"Due to the Covid-19 pandemic, the entire automation market has experienced significant supply chain challenges, prompting us to further accelerate our localization efforts. Only by achieving localized production can we better meet the product demand of the Chinese market. Meanwhile, since the Chinese market is highly dynamic, voluminous and completely different from the European market, Festo will change its previous perception of supply chain for nearly 100 years and redesign the optimal supply chain approach for the Chinese market." Chen Hong said.
It is known that Festo has established its world's largest factory in Jinan, which has been fully operating since October 2020 and is able to supply Chinese customers with guaranteed quality and timeliness. Moreover, Festo emphasizes that the quality of products manufactured in China strictly complies with uniform global quality standards and is totally comparable to quality of products manufactured in Germany.
Conclusion
The Chinese market is unique to the world, so is the Chinese lithium battery industry. The Chinese market is completely different from other markets in terms of customer needs, R&D directions, organizational supply chain and delivery cycle times, and it is the most enthusiastic about and open to digitalization in the world.
Festo not only has standardized products on offer, but can also provide customized solutions for various industries. Festo is the only company in the automation industry that specializes in industrial sales.