Aritec Glows With German-Taiwan Synergy

Volkhard Meier, Managing Director of Aritec Industries Co., Ltd., attributes the popularity of his company's lighting fixtures in Europe as much to his company's outstanding designs as to the manufacturing quality of its contract suppliers in Taiwan and China.

"Although Taiwan lags Germany in design capability, its manufacturing quality has reached in some field par with Germany," Meier says. Founded in 1987, Aritec is Taiwan's first German-invested lighting company.

Aritec was founded as the procurement office of a German company SLV Elektronik GmbH. At that time, the majority was owned by Taiwanese partners. These initial investors were bought out by the German company, which, around a decade ago, sold a majority stake to Meier.

One of Aritec's top considerations is product safety and product quality on a continuously high level, which must meet international industry standards and as well comply with international safety standards like in Europe the CE or in USA the UL.
The company has a long relationship with a German certifying body in Taiwan, TUV Product Service, and does all internal quality assurances in cooperation with a German consultant company, ABI-Tech International Co. Ltd., in Shenzhen China.

In 1992, the company began designing its own products, starting with a cylindrical "water lamp" which looks like an aquarium with fake fishes inside moving up and down along with water flow. The company shrank the size of the lamp for household use, giving birth to the "Aquastick".

In 1998, Aritec Aqua Sticks were sold in Germany at the half price of the normal price. It set a record by selling 70,000 units in one day. "This certainly has to do with our construction specialized for production abilities in Taiwan and later on China," he says. Aritec began transferring production of the lamps to mainland China and launching a number of promotions for the product in Europe. "In the two years beginning in 1998, we sold around a quarter million of the lamps," Meier estimates.

Following the success of the Aqua Stick, the company began promoting a fluorescent lamp with neon-like lighting effects a few years ago. The lamp uses Philips fluorescent tubes and covered with a colorful translucent polycarbonate (PC) tube. The lamp can work as a floor lamp when it is put in an Aritec-designed stand, can be hung from ceiling with the additional ceiling kit as a normal pendant lamp and is available as a wall application. It is also used as a light source in the company's CD-rack lamps.

Aritec has also introduced many novelty lamps for household uses over the past decade. Its fiber-optic lamp "Fiber UFO" and stage light "Home Disco" became overnight hits in Europe after their debut in 1994. The following year, the company introduced a lavalamp for the European household market, making it the first lighting supplier in Taiwan to sell the lamps in European discount markets.

Aritec expanded its product lines into light-emitting diode (LED) lighting in 2003. New products included own-branded LEDAC-family lighting fixture equipped with LED lamps in the shape of an incandescent-bulb. The lamps are plugged in the fixture in matrix rows and perform very smooth color-change sequence thanks to the control chip in each bulb.

Household lighting now accounts for half of Aritec's revenue, while the remainder is made up from technical lighting equipment. From 1993, the company began receiving orders for original equipment manufacturing (OEM) technical lighting equipment including building lights, spotlights, exterior lights and lighting equipment accessories.

Aritec earns 75% of its revenue from Europe, where its main sales outlets are major retailers or department stores. The company rarely demonstrates products at trade shows. Instead, Meier works directly with close long-term customers. His company has two showrooms on the third floor of the Taipei World Trade Center Exhibition Hall.

Aritec will open a showroom in Shenzhen of mainland China in April this year. "Lighting buyers do not come to Taiwan now since the majority of the Taiwanese manufacturers have transplanted to China," he notes. When Aritec was established in Taiwan over decades ago, the island was one of the world's largest lighting manufacturers and his company outsourced over 80 % of its products from the island. "Now, more than 80% of our lighting fixtures are coming from China," he says.

Nevertheless, Aritec still designs its products and buys major components in Taiwan. These components are then shipped to mainland China to go into light fixtures. "China still needs to improve in certain parts its manufacturing quality," Meier says.

Germans are known for their strict attention to quality, and as a former electronics engineer at Siemens AG, Meier is no exception to this heritage. He notes that at Siemens, even engineers that are just installing lamps have to be licensed. "In Germany we say, 'Demand is based on experience, not theory only'. Taiwanese engineers and technician are trained more like engineers in other countries, related more to theory than experience on construction sites or shop floors and this is related on its fast growing industry in a much shorter time as Europe did in the past 100 years" he said.

Like most of Taiwanese lighting suppliers, Aritec primarily supplies original design manufacturing (ODM) and OEM products. "The difference is that we can develop products faster and understand the European market a bit better than others. In fact, European consumers are concerned more about design and quality and not only about
pricing of a product," Meier says. He applies his design talk not only to lighting products themselves, but also to its packaging and the presentation at the point of sales. In light-color term, blue, orange and yellow are now European consumers' preferences, he notes.

Meier says that his company spends around 5% to 6% of its revenue every year on product development. "The life span for a new product now averages one to two years, and even shorter if copy-cats emerge. So, we need to get new products to the market quickly," he says. Together with two colleagues the design work is done in Aritec.

In spite of weak procurement sentiment in Europe, Meier expects his business do well in 2005. "The Euro is expected to continue on high value against the U.S. dollar. This is positive for exporters to the European market," he says.