by Rodrigo Orihuela, Bloomberg
In Burgos, a province in central Spain better known for archaeological digs and blood-sausages than for innovation, engineer Veronica Pascual is building automated vehicles. Not cars though, but fork-lifts, stackers and pallet trucks.
Pascual, a 38-year-old aeronautical engineer, owns Asti, a company that produces so-called AGVs, or automated guided vehicles—mobile robots used in factories and warehouses that don't require human intervention to move.
While tech companies from Alphabet Inc. to Uber Technologies Inc. are scrambling to make self-driving cars, far less attention is paid to other, less-sexy types of vehicles, opening a niche for companies like Asti, whose vehicles are used for moving a range of goods, from large packs of food boxes to 30 ton airplane parts.
The robotics service market is growing fast. Bank of America Merrill Lynch expects robots to be performing 45% of all manufacturing tasks by 2025, compared to 10% in 2015. The bank also estimates the industrial logistics, packaging and materials market will be valued at $31 billion by 2020.
Despite the opportunity, there are few firms trying to take over the factory floor.
"Most robotics investments still go on industrial equipment," said Mehdi El Alami, a partner at consultancy Roland Berger, noting that only 2% is spent on logistics.
Caterpillar Inc. and General Electric Co. are among the few that have invested, having both backed Clearpath Robotics, a Canadian startup focused on developing autonomous vehicles that move goods around factories. Nissan Motor Co.and BMW are among the carmakers testing and using autonomous vehicles in their factories.
For El Alami, the ever-growing competition for the ultra-fast delivery of goods will speed up the emergence of robotization as the only means to capture more profitable revenue. Asti hopes to cash in on the trend.
Operating in 15 countries, it counts the likes of PSA Group Ltd., the manufacturer of Peugeot and Citroen cars, drug-maker GlaxoSmithKline Plc. and Spanish food-maker Campofrio Food Group SA among its clients. Asti's sales jumped five-fold between 2012 and 2016 to 20 million euros ($23 million), with plans to hit 100 million euros by 2020. Last year, the company sold a total of 956 vehicles.
"The U.S. is a big market for growth because there aren't many people doing these type of projects there," Pascual said in an interview in her factory. PepsiCo Inc. and The Procter & Gamble Co. are among its clients, as is Mexican bread-making giant Grupo Bimbo SAB, which uses Asti's vehicles to move pallets with bread from its plastic wrapping station to the warehouse at one of its Spanish plants.
Founded by Pascual's parents in 1982, the company is housed in a 5,500 square meter building at the end of a shabby road. About 150 employees clad in red jackets and black t-shirts build automated vehicles with names like RoboFasts, Easybots and Hardbots. On one side of the factory, engineers and other employees hunch over tables working with the patented technology that allows the vehicles to rely on sensors and lasers to guide their movements.
Much of the space is given up to testing, some vehicles moving freely while others trundle down pre-designed corridors. One project is focused on automated battery changing modules, where vehicles can have their low-charge batteries replaced automatically, without human intervention.
One business model Pascual hopes to change is the traditional factory line, swapping fixed robots for moving ones. "Rather than taking parts to assembly lines, as has been always done, with automated vehicles you have the chance to move parts around, so a car-maker doesn't have to be tied to the assembly lines anymore," Pascual says.
Asti sells more than 60% of its vehicles abroad, with France as its main market. In 2015, installs of industrial robots surged in Spain by 63%, according to the most recent data compiled by the International Federation of Robotics. There is also room to grow. In the same year, there were 150 robots per 10,000 employees in Spain's manufacturing industry while France had about 127 per 10,000, compared to 301 in Germany.
Confronted with the question about fears over job loss to automation, Pascual argues that it is a question of preparing people for different types of jobs. "New jobs opportunities are created. There is a need to make more people employable. You can see destruction when instead of us leading the transition to automation we simply live with its consequences."
She pinpoints her company's own academy and education programs, aimed at both university and high-school students, that seek to foster job experience as well as young students interest in hard science.
Not everyone is so enthusiastic.
"We are analyzing the impact automatization will have and seeing it with concern," Carmelo Ruiz de la Hermosa, industrial policies secretary at the UGT-FICA union group, said in a phone interview. "Progress cannot be stopped and there will be more production and productivity but there will be a lot of workers who are likely to be excluded, mainly in manual jobs."
Pascual's expansion plans are based on organic growth, and she is also open to approaches from potential buyers or partners, with certain conditions. A takeover or alliance could boost growth perspectives, she added.
"There have been some approaches, but I wouldn't want to sell for this to be pulled apart, I don't want a sale of know-how, I want the project to grow," Pascual said.