Diversified company D&L Industries said the pandemic has delayed its investments in technology by a year as it prioritizes spending, according to Franco Diego Lao, group supply chain director.
Lao told the Manufacturing Summit over the weekend the company will attain Industry 4.0 — move more to automation — in four to five years rather than its original timeframe of three to five.
“If business sentiment, business conditions improve, then (that can) be accelerated back to our original plan,” Lao said.
He said the company has set aside P115 million initially for automation and eventually to manufacturing innovation.
“ We’ll have to prioritize where our money goes. (Investments in technology will) not necessarily halt… but may slow down. We have to be more discerning in choosing what investments we make in that path, and when,” Lao added.
He noted the importance of automation for D&L to ensure continuity as the lockdown had highlighted.
Employees had difficulty reporting for work and thus affecting production.
“We know we have to be competitive region, a lot more companies are more advanced than us,” said Lao, adding the company is now 20 to 30 percent automated.
“We are (at) the end (of Industry) 2.0 going towards 3.0. This is why we want to pursue 4.0,” he said, which means the company’s operations are predominantly manual in nature.
”If we put the investment in automation in our lines, which is great, which can be very expensive, we do expect a payback so we do have that a little justification,” Lao said.
Lao also said D&L will invest in new machineries “ if we have the financial support or financial incentives” to do so.
As an exporter which operates in economic zones, D&L will be affected by the new provisions in the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act once passed into law.
But when asked of D&L’s views on the rationalization of incentives, Lao said “it could be better.”
“(We have to be) competitive, not only… in the local (market) as well as our exports .
Obviously, other countries in the region can provide a more competitive manufacturing base, and therefore it’s really up to the government on how to attract these foreign nationals and balance that out with at the same time, making sure that local companies are able to compete with them as well,” he added. – Irma Isip