Towards a brighter future
Like most other industrial sectors, the estimated Rs5,000 crore domestic lighting industry has not been immune to the adverse impact of the global recession. “The recession has impacted for sure with deferred investment plans and reduced activity in all spheres,” admits Manoj Verma, vice president – consumer products and international business, Crompton Greaves & president, Electric Lamp and Component Manufacturers’ Association of India (ELCOMA).
“While mega projects have remained on stream due to their importance, small and medium projects have taken the back seat due to the perceived uncertainty,” adds Verma. However he hastens to add that the future outlook continues to be bullish for the industry. “While the accelerated growth we experienced a couple of years ago has ebbed we still are in the double digit growth zone and I’m very bullish about the future of domestic lighting industry,” he stresses.
For other lighting majors like Havells India Ltd, the recession has also had huge positive fallout. “In fact the turmoil has helped the business to establish better footprints due to the erosion of small, unbranded players from the unorganised segment that constitute nearly 30-40% of the domestic market ,” explains Sunil Sikka, the company’s president. “Now most buyers prefer to buy branded lighting products due to the reduced risks and better quality and services,” he says.
According to industry experts, technological changes, global accessibility, coupled with energy and environmental concerns, have brought in vast changes in general lighting equipment and solutions. “For example, the number of units manufacturing Fluorescent Tube Lights (FTLs) or GLS have come down dramatically,” elaborates PK Ranade, JMD, Indo Asian Fusegear Ltd.
Voicing his optimism, Ranade opines that CFLs and PL-L have replaced not only GLS but also FTL (in some cases) as the prime lighting solution for the masses. He says, “Upcoming products such as T5’s will show a good growth in the next years. Power LED (light emitting diodes) technologies are destined to eventually change general lighting equipment in the next decade. HID lamps have been stable and have shown good potential and this is expected to remain that way for some time.”
Future is Green
From a B2B perspective, energy efficient lighting products and solutions are now the key growth drivers for the industry given the growing awareness on vital issues such as energy efficiency, global warming and the need for a clean environment.
“Energy management and cost reductions are key tools in strategic planning today,” concurs Sikka. Adding, “Energy costs now constitute a major component of operating funds, thus making energy conservation and efficiency improvement, key necessities for enhanced productivity. Lighting in a typical building constitutes about 25% of the energy bills and there is a considerable scope for reducing energy consumption through energy efficient lighting schemes.”
It’s a trend that is amply reflected in the rapidly changing product mix of lighting majors across the industry today. A case in point is Crompton Greaves’ concerted efforts to develop the energy efficient LED product segment as Verma elucidates. Says he, “LEDs being the technology of choice in the lighting industry, we have a very elaborate range of LED-based lighting products. This has come about by a very structured plan in investing in technology and product development.”
“For example, Crompton Greaves is the first Indian company to manufacture in India an LED lamp as a retrofit solution to the GLS lamp,” continues Verma. “This entailed a lot of expenditure in the tooling and development. Our lamp factory is also following the global best practice in minimising the use of mercury in CFLs and FTLs. Besides recognising lighting controls as an important element in green building which is gaining traction we are also investing in lighting electronics.”
Philips on the other hand, has introduced a concept of Green Flagship Products which are the benchmark in their respective categories. Every product is evaluated across six parameters that include energy efficiency, hazardous materials, recyclability, lifetime reliability, packaging and weight to arrive at a green score.
“Philips has leadership positions in India in most product categories, especially in energy efficient and eco friendly products like CFL, LED, high efficiency luminaires, high frequency electronic ballasts and lighting controls,” reveals Mathew Job, senior marketing director – Lighting, Philips Electronics India Ltd. “The building and construction industry today is aiming to go Green through the efficient use of energy.”
“Lighting typically contributes around 20% of total energy usage and hence can contribute considerably towards driving energy efficiency,” Job continues. “Ensuring the use of appropriate lighting solutions is a key approach for energy efficiency in a building. For example, there are tubular fluorescent lamps available that last up to 5 times longer than a conventional lamp in its category.
To harness this potential, Philips is now investing in expanding its industrial footprint in CFL manufacturing, design and development centre for efficient luminaires and lighting gear. “LED being a comparatively new technology is also expected to be adopted swiftly,” adds Job. “Philips Lumileds Lighting is one of the world leaders in high-power LEDs. Its Luxeon range (in all colors and white) leads the world in performance (lumens per watt, lumens per $, lumens per mm2), lifetime (70% lumen maintenance at 50,000 hours) and white light quality.”
Leveraging the demand
Sharing his perspective on the market potential offered by energy efficient lighting products, Job says, “The market is moving towards more energy efficient, green solutions. Today, for each market segment an energy efficient lighting solution already exists. Besides this, an average saving of 40% is possible if we replace existing technologies with more energy efficient newer ones. Developments in newer technologies like LED’s, which have a lifetime of upto 50,000 hours or approximately 25 years, will open new ways of deploying lighting solutions.”
“The market potential offered by energy efficient lighting products is large,” concurs Parag Kulkarni, vice president – furniture & lighting, Wipro Limited. “In fact it is one of key growth drivers for the industry. Lighting companies are investing in innovative energy efficient light sources like LEDs, luminaires and accessories. Awareness levels across various target segments are increasing and it is good for industry.”
According to Kulkarni, Wipro is well placed to leverage the increased demand for products in this category. “We are the clear leaders in lighting for Green buildings wherein 21 out of the 32 certified Green buildings have been illuminated by Wipro. Furthermore, of the 9 Platinum rated buildings, we have catered to the lighting needs of five projects.”
While the focus at Wipro continues to be on LEDs and driving product development for LEDs, the company has also launched Eco Eye – a corporation wide initiative on ecological sustainability. “Force Green is part of this initiative which provides lighting solution for Green buildings,” explains Kulkarni. “Wipro drives increasing ecological sustainability in all operations and also areas of its influence. We have also conducted Force Green seminars across the country and educated customers on the impact of doing energy efficient lighting and adopting green designs.”
Other players like Indo Asian have consciously decided to deal only in environmentally friendly and energy efficient products. “We do not produce or market any incandescent lamps”, affirms Ranade. “We were the first producers of energy saving lamps and still are one of the largest exporters of eco friendly ROHS compliant CFLs to the EU. With regard to the domestic market potential, India has in excess of one billion light sockets today, but the socket penetration of CFLs according to recent studies is just about 20%. So there is a huge gap that needs to be met over the next few years.”
It’s a strategy that has also been successfully adopted by competitors like Havells India, which on entering the lighting business opted to invest in the manufacture of energy saving CFLs instead of the more popular GLS lamps. “Today we are the largest manufacturer and exporter of CFL lamps in India and the first Indian manufacturer to have adopted the stringent European ROHS (Restriction of Hazardous Substances) standards in their manufacture,” says Sikka adding that the company was also readying for the launch of another set of LED products with multiple user applications.
Infra & Realty connection
It’s a connection that has only been strengthened over time with the construction boom proving to be a major growth driver for lighting products across the residential, commercial and industrial segments. The government’s budgetary thrust on infrastructure development projects like roads, ports, airports and power has also added to the industry’s optimistic outlook about the future.
“The building and construction industry has always played a key role in the growth strategy of the lighting industry in India,” avers Kulkarni citing the hectic commercial development of several large IT & ITES campuses, corporate offices, banks and financial institutions, retail spaces, entertainment and leisure spaces, healthcare, education and hospitality facilities over the last decade.
“In fact the fastest growing B2B product segment within the lighting industry today is outdoor and architectural lighting,” he adds. “The increased investments into the infrastructure development projects as announced in the budget, is also a positive sign for our industry since infra projects typically require a lot of outdoor and architectural lighting. We as a company are focused on tapping this opportunity.”
It’s a view also endorsed by Ranade who feels that the organised lighting industry has benefited from the dream run enjoyed by the domestic building and construction industry. He says,“Modern property designs, development of designer malls, offices and factories have emerged as a result of better pricing prospects that came with the boom.”
“Even the conversion of old buildings has speeded up to leverage this new demand and upscale prices,” he adds. “These activities have also accelerated demand for latest lighting products, architectural outfits, and the top global brands to India. There has been a significant acceleration in the past 5 years compared to the last 2 decades.”
Job cites the growing popularity of Green buildings and the subsequent increase in demand for energy efficient lighting solutions to illustrate his point. He says, “Although most of the attention in green buildings is on reducing energy consumption through use of more efficient products, one also needs to look at other aspects. An important point to consider is the total life cycle (cradle to grave) impact of a product starting from manufacturing to disposal from the environmental perspective.”
Challenges & Road Ahead
With the latest budget focusing on the complete electrification of households by 2012 and an estimated 18% of the total electrical generation consumed by lighting sources, the lighting industry appears to be well placed to meet future challenges in terms of energy efficient products.
However the road ahead is not without its share of challenges that need to be overcome if this growth potential is to be achieved. Elaborating on the future roadmap for the industry Verma elucidates, “The use of best practices in lighting and early adaptation of technology to speed up energy efficiency, reduce carbon emissions and providing leadership in the recycling of fused conventional lamps are some of the challenges faced by the organised sector.”
According to him, the government should enable the consumer to use the latest range of lighting products as available in other countries. “If the latest technologies are to be made available to the common man, the government needs to allow subsidies on imports, excise duty and VAT,” he stresses.
The lack of awareness among users on the ill effects of conventional solutions like GLS lamps continues to be a cause for industry concern. “The ordinary GLS Lamps still amount for about 61% of the lighting energy consumption,” reveals Sikka. “India being a price sensitive market continues to prefer the cheaper GLS Lamps, while other nations have already firmed phase out plans for these energy guzzlers.”
“The abuse of warranty and imports of cheaper and poor quality lamps is a huge issue that still plagues the industry,” agrees Ranade. These poor quality imports erode customer confidence in the complete product family. This kind of a hit-and-run approach is damaging the domestic industry and consequently the entire country.”