GSR backs China’s growing LED market

“We believe the market potential for LED is huge as we have predicted that will reach $300 billion within five years,” Liu Hai, an executive in GSR’s sales and marketing department, tells AVCJ. “There are about four major global players in the industry, including Samsung and Phillips, and SunSun has the potential to among them. Whoever emerges as the winner in the commodity space is going to have large-scale capacity.”

The other LED plays in GSR’s portfolio are LatticePower Corporation, Lattice Lighting, Dalian Golden Sanwei Technology, Shineon and Times Energy Corp. SunSun is seen to complement these existing interests as it is more a general lighting manufacturer than a niche player.

Next generation lighting

The company, based in Changzhou, Jiangsu province, has an annual output of 10 million units, with work already underway on a new facility that should boost capacity threefold. SunSun broke new ground earlier this year, launching a 9-watt LED bulb intended to replace the standard incandescent 60 W bulb. It is said to last 25 times longer than an incandescent bulb.

The company is working on expanding its overseas distribution networks. It has identified boosting domestic sales as a medium-term goal, leveraging China’s untapped potential and increasing appetite for energy-saving solutions.

“Local governments are encouraging the transition to LED through policy support and various other initiatives,” Liu says. “We believe that the market will grow rapidly and later consolidate. We may also look for opportunities to consolidate our LED portfolios.”

The National Development and Reform Commission predicted that China’s LED market could be worth $100 billion by 2015 and is currently mapping out plans to start phasing out the use of incandescent bulbs from 2018. According to the Climate Group, a non-profit organization, China already accounts for around 7% of the world’s LED lighting supply and has a 50% share of the global LED street lighting market.

Under the “Ten Cities, Ten Thousand Lights” initiative, launched in 2009 and subsequently expanded, the government set a target of installing two million LED lighting units in 50 cities by the end of 2010.

 “Greater emphasis is now being placed on standardized procurement processes and product standards,” an analyst from the Climate Group says. “Existing government support for outdoor lighting is gradually extending to indoor lighting. The government has implied that subsidies will be introduced for LED bulb purchases.” 

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• Topics
• Greater China
• Venture
• Cleantech
• GSR Ventures