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Friday November 23, 2012
By DAVID TAN email@example.com Photos by KT GOH and Chan Boon Kai
LOCAL light emitting diode (LED) companies are preparing for rising demand in 2014, the year targeted by the Federal Government to phase out incandescent lighting in the country.
Global Outreach Energy Sdn Bhd and QAV Technologies Sdn Bhd are two Penang-based LED companies investing for expansion.
Global Outreach is setting up a RM3mil 25,000 sq ft assembly facility, currently being renovated in Seberang Prai. It is expected to start operations next month.
QAV Technologies, involved in the LED testing business, is investing RM25mil for a second laboratory in Bayan Lepas.
Global Outreach managing director Edwin Foong said the current market for LED lighting in Malaysia is worth at least RM160mil a year.
“The present global market is worth about US$200bil.
“Both the local and global markets are expected to grow at 30% this year and in 2013.
“In 2014, we expect higher growth for domestic demand with the new nationwide law.
“Overseas, the growth for LED lighting will rely on demand from neighbouring countries.
“This is the reason why we are expanding and designing new products to meet the market’s demands,” he said.
The assembly facility is supported with an interest-free soft loan from the Northern Corridor Implementation Authority (NCIA), according to Foong.
Global Outreach generates 80% of its revenue from export sales, selling mainly to Japan and the Philippines, and the remaining 20% from the growing domestic sector.
“We are now targeting other Asean countries and the Middle-East,” he added.
Global Outreach, which started a year ago in Fortune Park, Jelutong, is targeting a RM30mil revenue next year.
“Presently, our monthly sales is around RM1.5mil to RM2mil. But we are confident that the figure will touch RM2.5mil next year,” he added.
Foong said a key product recently developed is a new system which taps solar energy as a power source and used with a direct current control system.
“Our LED lighting direct current control system is equipped with Internet Protocol hardware and software, which allow users to control the lighting in homes and offices via smart mobile devices.
“The new system is being tested by Japanese customers. It will be mass produced in the new plant,” he said.
Global Outreach’s other new products include the easy-to-install 1.2m high-brightness LED lighting tube.
“They do not require the removal of the conventional wiring and electrical components for fluorescent lighting, which saves installation charges,” he said.
Global Outreach markets under its in-house brand names, GOE and Good Power.
Meanwhile, Global Outreach director Chew Leong Thean said their designing team works with customers to develop new systems.
“We source 70% to 80% of the raw materials locally.
“We use LED chips supplied by Osram Opto Semiconductors in Penang, which enable our system to save 50% to 60% of energy.
“We are a green project certified company with certification from the Energy, Green Technology, and Water Ministry,” he said.
QAV Technologies director Michael Goh Boon Chin said the new test laboratory, equipped with LED testers from Germany, would begin next June.
“This new 50,000sq ft lab will test up to 100 models of LED lighting products per month.
“Currently the existing 20,000sq ft lab test up to 30 models per month.
“We test for brightness and the colour. The new lab has the capability to test products with 100,000 lumens,” he said.
QAV customers are local small and medium enterprises and multinational corporations (MNCs).
“About 40% are MNCs, while the remainder are locals SMEs,” he said.
Goh said the domestic demand used in street lighting alone was expected to hit over RM250mil in 2014.
“This is one of the reasons why there is need to expand.
“We are also planning to participate in exhibitions around the Asean region to tap their markets. Some of these countries have similar deadlines for phasing out incandescent lighting by 2014,” Goh added.
QAV is targeting a RM30mil revenue next year, compared to its projection of RM15mil this year. It is the only lab locally with the American National Standard Institute (ANSI) certification, which accredits standards developed by organisations, government agencies, consumer groups, companies, and others.
These standards ensure that the performance and quality are consistent and tested the same way, according to Goh.
“ANSI-certified products will gain a wider market penetration,” Goh said.
According to the Taipei-based Digitimes Research February report 2012, the global high-brightness LED industry will see year-on-year growth of 13.4% in 2012, with the value of output rising to US$10.1bil.
However, the high-brightness LED industry will not return to high levels of growth as in 2010, as there is a huge drop in metal organic chemical vapor deposition equipment, used for manufacturing LEDs, the report said.
In 2010, the industry grew an impressive 67% to US$10.2bil from US$6.1bil in 2009, according to a TechEye report. The report also said that Japan, South Korea and Taiwan will account for some 61.3% of the high-brightness LED market in 2012, as the trend towards Asian dominance will be even more pronounced.
In a report, Digitimes Research said Asia-based firms will take up 90% of market demand for MOCVD equipment in 2012, an increase of 10 basis points compared to 2011.
“In particular, equipment demand is highest in China, with an expected share of 68% out of total global demand in 2012,” the report added.
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