China Electric Focuses on "Green Lighting"

Established 50 years ago and now Taiwan's leading manufacturer of lighting products, the China Electric Manufacturing Corp. has dedicated itself to the development of energy-saving "green lighting" and to its own transformation into a "total lighting solutions provider" in a bid to create fresh momentum for its future growth.

One major area of green lighting under development by the company is LED (light emitting diode) lighting. In addition to conserving energy, LED lighting features excellent color rendition (similar to sunlight) and compact size. Experts predict that thanks to these advantages, LEDs will replace the existing lighting sources by 2010.

At present, however, LEDs suffer the disadvantages of insufficient luminosity and high prices. As a result, they are now confined to such uses as traffic lights, outdoor ads, floor lights, and garden lights.

To overcome the shortcoming of inadequate luminosity, China Electric is developing high-luminosity LED lighting and plans to roll out new and improved table lamps in October, marking a major breakthrough in the domestic lighting field. In addition, the company is engaged in the development of nanometer carbon tubes for LED lighting, with technological support from the Industrial Technology Research Institute (ITRI).

Previous cooperation with ITRI resulted in the development of titanium purple lighting products which feature the use of a nanometer photo-catalyst material, TiO2. Such products boast lighting, germ resistance, anti-pollution, and deodorant functions. They came under the spotlight during the outbreak of SARS in 2003, when the company donated many such lighting devices to hospitals caring for SARS patients.

The electronic ballast is another green lighting product on the company's list of priority products for development.

Going Solar

Furthermore, the company has been engaged in research on solar energy for over three years. Its solar panels have been installed on the exterior walls of Tainan County government building in southern Taiwan, and on road lamps in eastern Taiwan.

In addition to the development of next-generation lighting, China Electric has been striving to boost the added value of its existing products. These are divided into six major categories: indoor lighting, outdoor lighting, dedicated lighting, ballasts, and general lighting products. The company's products bear the "TOA" brand name.

This year the company rolled out a UFO lighting tube featuring a graceful appearance and broad lighting coverage. This new product is being marketed, at a price of NT$150-200, via B&Q outlets. Market response has been strong, and the company expects to sell NT$40 million (US$1.2 million at NT$32:US$1) worth of the lighting tubes this year. The product is meant to replace the spiral-type tube, whose price has dropped below NT$100 due to competition from products made in China.

Other innovative products in the traditional-lighting line include a high color-rendition lighting tube, a ion tube, and anti-flicker lights.

To boost revenues and profit margins, the company has repositioned itself as a "total lighting solution provider," rather than a simple lighting manufacturer, that offers clients complete lighting system designed to meet their specific needs. The systems encompass such features as lighting ambiance, lighting adjustment, and energy conservation. A typical case is systems developed for Taipei 101, which are expected to generate NT$50 million (US$1.5 million) in revenue for the company this year.

These efforts helped China Electric turn its operation around last year, when its revenue grew 12% to NT$3.1 billion (US$970 million) and its operating income reached NT$180 million (US$6.2 million), reversing the losses suffered in 2003. In the first seven months of this year revenue fell by 7%, to NT$1.7 billion (US$530 million), but profits remained at last year's level.

Moving into China

In response to the demands of Taiwanese manufacturers in mainland China, China Electric has spent US$3-4 million to set up a factory in Suzhou, mainly for the production of lighting sources, lighting devices, and ballasts. The plant recently went into operation and is expected to generate revenues of US$2 million this year. Its products are aimed mainly at China's domestic market and Japan.

The company also spent US$5 million on a new factory, near Ho Chi Minh City in Vietnam, which now has 40 workers turning out lighting sources, lighting devices, and ballasts. The output of the plant is mainly for markets in Southeast Asia, India, the Middle East, Europe, and the United States.

The company has high hopes for its Ho Chi Minh plant. "The Vietnamese operation will help us win back clients in Europe and the U.S. from our Chinese rivals, who have taken over most of our business there in past years," comments Shiny Chen, director of China Electric's International Business Division.

The company has diversified from its traditional lighting field into the production of cold cathode fluorescent lamp (CCFL) tubes for use in TFT-LCD (thin film transistor-liquid crystal display) panels and back-light modules. Its subsidiary, Wellypower Optronics Co., is expected to turn out 72 million of the tubes this year, making it Taiwan's largest in the industry. The outlook for the new subsidiary is bright, as demand for the tubes is expected to expand rapidly along with the growing popularity of LCD TVs. A 32" LCD TV typically contains 20 such tubes, compared with two for LCD monitors and notebook PCs.

In the future, comments Liao Po-his, China Electric's chairman, "We will hold to diversified operations centering on our core business, and constantly invest in new products related to our core technology."