The Indian LED manufacturing market is so volatile that every few months there is a downward revision of prices but upward revision of performance. We are here to address all these of our customers to make them more competitive, says Ita Lin, Chief Executive Officer, MLS India, in an interview with Elets News Network (ENN). Excerpts:
What is the significance of “MLS India” in this fast changing LED market in context of India?
MLS India has been set up with the intent of promoting our LED package business. Currently, the focus is on promoting our range of low, medium and high voltage LED components. We promote ourselves as a partner to those who participate in various government tenders. We have full-fledged research and development support capabilities with a Chief Technology Officer who supports our customers with technology, design and validation inputs to optimise cost and to differentiate our offerings from other players in the market. Currently over 80% of the market demand for LED packages is generated by the government sector and we want to help our current customers fulfil the quality, price and performance expectations of the government.
We want to work hand in hand with our partners and have the ability and agility to respond to their ever changing needs at the speed at which they demand. The Indian LED manufacturing market is so volatile that every few months there is a downward revision of prices but upward revision of performance. We are here to address all the requirements of our customers to make them more competitive in the market.
When did your company start operations in India and what all areas have you covered till now?
We started India operations in January 2015. Though MLS has huge experience in finished goods and has presence in various geographies across the world, we have deliberately kept our focus on LED components so that we can tailor our approach to the Indian requirements and help our customers achieve their goals.
You follow B2B model of business here in India, any plans to launch retail shops here?
Initially, we had plans to promote our finished goods brand called Forest Lighting in India. We wanted to launch our B2C business at some stage. We have just acquired the consumer lighting business from Osram (now referred to as Ledvance) but at present, we are awaiting approvals from German and the Chinese governments. Acquisition of Osram is a big investment for us and post- approvals we expect to start consolidating both the businesses. As you know Osram has been doing business in India for 15 years and it has extensive retail network. We expect to derive a new business plan and model for the Indian market encompassing the synergies of both MLS and Ledvance. But there is no guidance on this from the management at present.
How prepared are you to set up manufacturing units in India?
We are also trying to advocate Mr. Modi’s “Make in India” initiative and set up our own facility unit here in India. Ledvance already has its own facility in Kundli (Haryana) and this was designed and set up based on the guidelines and processes followed by Osram in Germany. At present, the focus is on maintaining the status quo at this factory. After the consolidated business plan is revealed, we will work towards implementing those strategies. Perhaps, we will need to re-think about the LED supply chain and evaluate optimisation strategies to compete in this aggressively priced market. In the past, Ledvance was focussed only on CFL and though they had started to manufacture LED products in a small way, that was not really optimised for today’s cost conscious LED market.
The Indian LED manufacturing market is so volatile that every few months there is a downward revision of prices but upward revision of performance.
India is currently focusing on smart cities, do you think LED technology can help in achieving this target in some way?
The concept of smart cities will have a huge impact on the way we look at India in the future. They will be modern, energy-efficient,connected and extremely productive cities that will take India into the future. Efficient LED technology, smart lighting and customised user-experience would be very important parts of these cities.
Personally, I believe that if you think about the actual requirements of smart cities, you will realise that sensor technology will play a very important role there. Depending on how the demand is created, we may think about manufacturing sensor packages in a very big way. Sensing requires a lot of infra red packages which are quite similar to LED packages – a technology that we are very familiar with for the last 20 years. It is very easy for us to shift part of our production from China to India if the demand here is big enough.
In India there is huge gap between demand and supply, what are your views on that?
Currently in India, there is only the assembly for LED lighting products since most of the components are brought from China. The market price of a bulb is still Rs. 70 but the tender price for the government is Rs. 38. I think Rs. 70 is quite low already. It is the lowest in the world and I am sure no other country has a one dollar (US) bulb. Therefore, if the demand keeps increasing, I suppose that it would attract more companies to invest in India for manufacturing.
With initiatives like Make in India, a lot more focus is being brought to bear on indigenously developed parts but it will take a humongous effort on the part of the government and industry bodies to slowly move to completely “Made in India” products, especially in the LED domain. Infrastructure, policies, taxes, transport, red-tape… the list is endless. All this will have to be overhauled, upgraded and made investor friendly to really promote Indian supply chain. There is no dearth of talent, funds or ideas in India, it just needs the right support from the government to bring about a sea change.
Keeping in mind the Indian market what kind of new products and innovations you plan to launch soon?
Right now our focus is on automotive. For that we need permission from automobile makers. We have also initiated LED outdoor signage products but the uptake is slow as we expected. We are going to focus more and more on LED applications, for example, commercial lighting, smart lighting, monuments lighting, decorative lighting, lighting for security, etc. In India, we have got a lot of remarkable monuments that can be made more beautiful with the right lighting. Many companies are focusing on these projects, Osram is focusing on lighting stadiums and other buildings also.