Taiwan Firms Find High-end Niche In Industrial/Commercial Lighting

Over the past two decades, most of Taiwan's lighting-fixture makers have shifted their production to mainland China in search of lower costs, but most of these firms have discovered that the move across the strait is not necessary to the maintenance of global competitiveness.

The answer, instead, is a higher niche in the "food chain" of the industry. One of the most promising niches is the high-end industrial/commercial lighting sector, where the relatively high entry barrier keeps the number of competitors relatively low. To succeed in this niche, though, manufacturers are finding that they need strong research and development capabilities, high-quality products, and strategies that enable them to keep pace with ever-changing market demands.

Companies going into this high-end sector also need to meet stricter standards for safety and precision, as well as provide greater compatibility and durability. Most of Taiwan's producers in the line have chosen to turn out selected key parts and components that are crucial to the safety and durability of their lamps. For example, many leading local makers of industrial/commercial lighting products, especially those that are focused on high-intensity discharge (HID) lamps, have set up their own ballast plants in a bid to further elevate their competitiveness by keeping costs down and product quality up.

Suppliers of high-end commercial/industrial lighting products also have to obtain certification from international safety-standard organizations. This certification is expensive to obtain and to keep, and so many Taiwanese suppliers have chosen to concentrate on just a few targeted markets so as to minimize the number of safety certifications needed.

While local suppliers of high-end industrial/commercial lighting have varying product- and market-development strategies, they all share a common commitment to the constant introduction of new products needed to enable them to keep abreast of prevalent trends in the industry, such as the growing popularity of HID lamps.



Popular Recess Lights



An outstanding example of this is L&C Lighting Enterprise Co., which was established in 1989 and has grown into one of the largest recess-light makers in Taiwan. The company's products-mainly high-end recess lights--are popular in the United States and Canada.

L&C has moved its production to an 800-worker plant in Guangdong Province, mainland China, while keeping its R&D operations in Taiwan. The R&D center has developed a host of new products over the years, key to L&C's expansion into new fields such as spotlights, light-emitting diode (LED) emergency lights, under-cabinet lights, and tracklights.

Mike Liao, the company's chief engineer, claims that L&C is the only recess-light maker in Asia with its own UL-1598 luminary-certification laboratory, a fact that underscores the firm's commitment to R&D and quality control. The planned acquisition of a cutting-edge goniophotometer (a spectrum-distribution measuring instrument) will enable the design department to develop even better products for the upper end of the market.

In recent years the company has been busy developing HID lamps for high-end industrial/commercial illumination, under a strategy that aims to turn out a string of new products constantly and to develop and manufacture L&C's own HID ballasts. Its HID lamps can be used with 30W to 150W bulbs, as well as PAR, single-end, and double-end bulbs, and its ballasts have won UL and ETL approval in the U.S. and Canada.

Liao says that his company's HID ballasts are highly compact and durable, and that thanks to a sophisticated circuit design they compare favorably with those of Japan's Matsushita, the global leader. These ballasts can be used in a variety of environments, making them ideal for high-end industrial and commercial applications.

To make sure that its HID lamps are of the highest quality, L&C buys its bulbs from top brands such as GE, Osram, and Philips.

Other development projects now on the drawing board include 400W and possibly even 1, 000W industrial-use sodium lights. The ratio of such lights and other industrial/commercial lighting products is expected to grow steadily in the years ahead.



Success Through Quality and Focus



Another Taiwanese company that has found its niche in the high-end industrial/commercial lighting segment is Variable Luminaire Ltd., a leading maker of commercial lighting. The company has achieved considerable success over the past 14 years through a combination of high quality and a tight focus on the U.S. market, says its president, Chen Shih-huei. Its integrated operating strategy, which includes streamlined operations and the constant development of new products, has also helped.

Many of Variable Luminaire's products are inspired by commercial-lighting products developed by leading European brands, Chen comments, but are modified to suit the U.S. market.

This strategy is not as simple as it might seem, Chen stresses, because European lighting products are often integrally designed while in the U.S. market the safety-protection devices (including power supply systems) used with recess lights and surface trim need to be separated. Providing for this separation requires complicated R&D work in the areas of materials, structures, and heat dissipation, as well as a solid knowledge of patent rights. His company, Chen claims, has a competitive edge in all of these areas.

Exclusive concentration on the U.S. market means that Variable Luminaire's products need only UL certification. An in-house lab simulates UL testing procedures in order to accelerate development work. His willingness to pay the huge annual UL certification fees, the president says, means that he has few true local competitors.

By producing only high-end products with high margins, Chen goes on, he can limit his work force (while employing more highly qualified personnel) and, as a result, can provide attractive employee benefits to limit staff turnover.

The company recently introduced its T92 series of recess lights (in models having one to six lights), which can serve as either spotlights or downlights through a simple adjustment of angle. Its high-end surface coating and elegant styling make the new series an attractive decorative addition, especially in upscale commercial spaces.


Variable Luminaire is now developing HID recess lamps using the latest 80W PL energy-saving tubes. Chen confidently expects this new line to set a new design standard for the high-end commercial-lighting market.

To assure quality, Variable Luminiare itself produces the transformers used in its halogen lights.



Carry On, Ever Higher



Another leading Taiwan maker of high-end commercial lighting is Carry Beam Co., Ltd. Which focuses on ceramic metal-halide lamps. These offer the best color rendition of all HID lamps, and thus command a high price premium.

Carry Beam chairman William Wen explains that the company chose to concentrate on ceramic metal-halide lamps because of their higher profit margins compared to other kinds of HID lamps. The firm's competitive edge, he says, lies in its ability to design and produce the specialized ballasts used in the lamps.

As the largest trader in Philips ceramic metal-halide bulbs in Asia, Carry Beam also enjoys a cost advantage. Wen states that most of his customers want to buy complete lamp units, including bulbs, directly from Carry Beam in order to save money and time. This enhances the company's overall competitiveness, and boosts customer satisfaction.

The company currently turns out special-specification HID ballasts at its plant in mainland China's Fujian Province, since, according to Wen, it takes a relatively long time to make customized compact ballasts for ceramic metal-halide lamps. Carry Beam's general-type ballasts are made at another location in the mainland, at a joint-venture facility in which it has a controlling stake. (Oct. 2004)