Danish robot maker Universal Robots sees a potential goldmine in offering robots with a human touch to small enterprises on the mainland that are struggling with rising wages and a shortage of labour.
The incentive for Chinese manufacturers to employ robots is increasing because of wage rises, says Enrico Krog Iversen, CEO of Universal Robots, which specialises in producing lightweight robots.
Robots that can interact with humans without the hindrance of a safety barrier will be in growing demand from the mainland's small and medium-sized enterprises, he says, noting that intuitive programming that is easy to set up is also necessary.
"Smaller robots are the ones that are having the biggest success in China," Iversen told the Post. "It's a flexibility issue that robots can fit into many applications. For those traditional robots, there is not enough room."
Since entering the Chinese market in December 2011, Universal Robots has teamed up with 11 partners to distribute its lightweight robots to the mainland's SMEs. One of the company's customers was in the printed circuit board industry, employing robots in loading materials into production machines, Iversen says. "By putting up robots here, it can have very consistent production, and also be safer."
Another Chinese customer is from the computer numerical control machining industry that automates machine operations with collaborative robots.
"Using robots helps increase the throughput of machines," Iversen says.
The Danish firm's robots are used in a wide range of industries such as electroplating and painting that go beyond the automotive, aircraft product and heavy-machinery industries in which they are commonly used.
"More and more industries will start using robots," Iversen says, noting that robots could help deliver higher quality production and make SMEs more competitive in the global market.
"What we see in China is that SMEs are moving from being low-cost manufacturers to quality-oriented producers now," he says, noting the transition will cause a shortage of skilled labour. Although the cost of a robot may hinder SMEs, Iversen says his robots are competitive in terms of cost, with the price typically recouped in only 2-1/2 years.
"The 2-1/2-year payback period is only under the current labour costs. If wages continue to go up, the payback period will be even shorter," he says.
The implementation costs are also low as the robots are simple to install and user-friendly. "This is a competitive payback period when compared with other machinery investment."
Iversen declined to reveal sales figures over the past a year and half since it entered the mainland market, but he expects sales to more than double every year from next year to 2016.
The company, which is planning to localise its production in China by 2015, also has a target of doubling the number of distributors in the coming year. Universal Robots is hiring its own sales people and setting up an office to strengthen its position in China.
"Our growth in China will outperform other markets. If we look at three years down the road, China will play a bigger part than today," Iversen says.