Category: Industry

In Japan, government support, LED lighting industry grow rapidly. In 2008 the Japanese lighting market, LED lighting accounted for 0.8% of the proportion is expected to reach 8% in 2015, 2020, will increase to 25%. Nichia, ToyodaGosei and other influential world-leading enterprises are emerging LED. Japanese government in promoting the development of LED industry played a very important role. As early as 12 years ago, Japan has started to promote the development of semiconductor lighting technology and industrialization of the “21st Century Light Plan”, is the world’s first LED industry policy launched one of the countries. This article focuses on the LED to explore Japan’s most important industrial policy “in the 21st century light plan”, both before and after analysis of the plan implementation phase of the development focus to summarize the development of LED industry in Guangdong inspiration.

A first stage in order to promote R & D-based (1998-2002)

Organization to promote the implementation of the scheme commissioned by the authority. Japan’s “21st Century Light Project” (high-efficiency photovoltaic conversion compound semiconductor development) was in March 1998 by the METI (formerly MITI, METI) for the New Energy and Industrial Technology Development Organization (NEDO, TheNewEnergyAndIndustrialTechnologyDevELopmentOrganization) to provide funded by NEDO, and the specific metals research and development centers in Japan (JRCM, TheJapanResearchAndDevelopmentCenterForMetals) jointly implemented. Developed by the Japan Electric Lamp Manufacturers’ Association and four universities, 13 companies cooperation.

From the point of view at that time, Japan has actively implementing “21st Century Light Plan” mainly because of three considerations: First, to energy-saving, LED products, excellent energy saving effect can save a lot of energy for Japan, which is the most important reason. Second order reduction, once the popularity of LED lighting, will reduce 3.4 million tons per year of carbon dioxide, no doubt for the Kyoto Protocol to reduce carbon emissions to add a booster. Third, the industry leader for the Japanese government to cultivate local LED industry’s international competitiveness and maintain with Nichia, Toyoda Gosei in Japan, led by companies such as LED technology leader in the world.

A focus on promoting R & D program. “The 21st century light plan” a plan emphasizes basic research in LED technology. In 1998-2002, the Japanese government invested 5 billion yen and the development of white LED semiconductor lighting, new semiconductor materials, substrate, phosphor, and lighting, etc. (see Table 1), the 2005 production that can replace incandescent and fluorescent The first generation of LED light source for general lighting. Japan has achieved a “21st century light plan” the first phase of the target.

Completion of the first phase of the target, largely cast a number of leading Japanese LED business success, they GaN blue and green LED breakthroughs in a number of industrial areas such as key and common technologies and the establishment of a worldwide patent network formed in this century, Japan’s leading edge LED industry. For example, the master of polysilicon, silicon and silicon wafer manufacturing materials and other production and manufacturing technologies have world-renowned Japanese company Shin-Etsu, Mitsubishi two (with two other virtues of enterprise MEMC, Wacker together control around 70% of silicon wafer market); master GaAS substrate manufacturing technology of Japanese companies including Hitachi Cable, Sumitomo Electric, Mitsubishi Chemical, Shin-Etsu, etc.; master organic metal technology is Sumitomo Electric; master phosphor technology companies are fundamentally about the special chemistry (Nenoto), into (Optonix), etc.; master MOVCD devices (commonly known as the extension of the furnace) manufacturing technology of Japanese companies, including Nichia, Toyoda Gosei, Dayang Sanso (Sanso) and so on.

Second, the second phase of building and nurturing needs of the market (2003-2010)

“The 21st century light plan” is the beginning of this century, the implementation of Japan’s technology leader in the field of LED-based development strategy of the important measures. The program hopes to continuous technological breakthrough can be achieved in 2006 with 50 percent of white LED lighting alternative to traditional lighting, as well as the country’s electricity consumption by approximately 10% of the target. But in fact the LED lighting lighting in Japan in 2008 accounted for only 0.8% of market share, which is LED price drop not achieve the desired level, and marketing applications has a lot of lag. To this end, the Japanese government to adjust the “21st Century Light Plan” to implement the second phase of the center of gravity, from the first phase of the push-based technology research and development to build the second phase shift and training needs of the market. More technical aspects of research and industry by industry-led alliance government’s direct financial investment decreased, the government hopes to develop the market and strengthen the popularization and application to open the deadlock. Thus, in the second phase implementation process, the Japanese government has adopted a standard set up to promote LED, LED products promote the use of tax incentives and other measures to expand the LED lighting market.

(A) promote the establishment of standards for LED

Currently, the overall global LED industry standards are not established, although the International Standards Association has developed a CIE-127 standard, but only part of the measurement standard. The reason is mainly a wide range LED applications, requirements of individual areas such as product characteristics vary greatly, but the lack of leader-led industry standard is one very important factor. To this end, the Japanese government and manufacturers to establish a standard for the world to seize the advantage is very positive. A few years ago, organized by the Japanese government, Japanese semiconductor lighting industry for the joint Japan Electric Lamp Manufacturers’ Association of LED products style and standardized measurements, and more recently the integration of Japan 72 LED LED lighting related companies set up to promote the Association, the the standard integration and development, membership hope buyers and sellers by reducing transaction costs and industry standards, thereby enhancing the competitive advantage of Japanese companies worldwide. Japan introduced the main LED important criteria include: the development and improvement of “white LED lighting metering method General.” Illuminating Engineering Society of Japan (JIES), Japan’s Commission on Illumination (JCIE), Japanese lighting industry will (JIL) and the Japan Electrical Manufacturers’ Association ball (JEL) in 2004 to develop common standards, “with white LED light metering method General”, as the only white LED lighting for the development of measurement standards in the first edition had the lead in formulating a number of projects had not been standardized, such as standard LED manufacturing, small modules of light intensity measurement and life assessment methods. Subsequently, the four groups in Japan in March 2006 announced a revision of this standard, increasing standard, and revise the original content, colorimetric measurements and flux measurement methods make a more detailed specification. Overall, a very detailed description of the standard, can be found at this stage of the LED standard international literature, the content can be said to be the most complete specifications. In the current industry is still a lack of appropriate generic LED measurement standard case, the standard will be an important reference.

Re-enactment of “Electrical Appliance and Material Safety Law” to regulate, including LED products, including product attributes. May 2010, the Japanese re-enacted the “Electrical Appliance and Material Safety Law,” clearly defined electron emitters (LED, OLED lighting) the power, voltage, fixed frequency. Provisions of the relevant official is expected to be released before the first quarter of 2011, the fastest will be implemented in July 2011. But for LED lighting, electric current specification includes only the spherical object lighting, lamp lighting in the specification that the object beyond. Although the “Electrical Appliance and Material Safety Law” does not contain a lamp type LED lighting, but still want companies to the Japanese government according to their own performance and security constraints, the formation of non-expressly provides that “the industry specifications.”

(B) promote the use of tax incentives LED products

Tax breaks to encourage procurement of LED products. December 2005, Japan introduced to improve and enhance the promotion of energy tax, between 2006-2007, clearly defined business or organization to use led lighting to replace incandescent lighting, access to over 130 per cent depreciation of investments, or 7% of investment tax rate reduction, to narrow the traditional lighting of the LED and the gap between procurement costs, improve use of LED lighting initiative to expand the demand for LED lighting in Japan.

LED products into the “Eco-Point” energy-saving appliances subsidy program. In response to the international financial crisis, to stimulate domestic consumption demand, in May 2009, the Japanese government began to implement energy-saving appliances subsidy program “Eco-Point” system, the implementation period for the end of 2010. The so-called Eco-Point system, affordable way to mainly country will be equivalent to 5% of the cost price as “EcoPoint” restore to consumers, then consumers can use points accumulated exchange of other products. LED lighting products become the flat-screen TVs, refrigerators and air conditioning after the approval of the second batch of product subsidies object. Currently, Eco-Point systems since inception, led the sales showed significant growth-related products, including LED lights in the Japanese share rose from less than 1% in 2009 to rapidly increase in February 2010 to 10%, effective from the last play boost Japanese consumer, the role of supporting economic recovery.

CB Blower fans can be supplied to be gas tight and made of special materials to resist corrosion. Fans and turbo blowers are supplied to provide air for carbon black plants and for sulphuric acid plants.

Chemicals industry provides the widest range of challenges for rotating equipment. CB Blower Co. fans and blowers operate in conditions encompassing extreme pressure and temperature, and handle a wide range of gases containing aggressive and toxic components. Demanding specifications and strict safety requirements must be met and above all is the need for dependable operation over long periods.

CB Blower Co. fans meet the challenge of moving gases continually, reliably, efficiently and safely. They are built to API, or equivalent industry standards and their performance has been proven over many years of operation; and the blowers can meet unusual requirements that include dual drive systems with automatic drive engagement / disengagement and special materials of construction.

CB Blower Co. fans and pressure blowers are found in all major process plants. The range of applications is very wide but includes:

custom engineered centrifugal process fans for combustion air supply. These may be used directly for fired heaters for ethane or naphtha cracking plant and for processes with steam reforming such as methanol, or for boilers serving general utilities. Flue gas extraction and tail gas clean up are among the other applications for which we have supplied custom fans.
auxiliary boiler and other pre-engineered fans.
cooling fans for mechanical draught cooling towers, air-cooled heat exchangers and air-cooled condensers.
turbo blowers for sulphur recovery combustion and reaction air, sulphuric acid and carbon black plant
screw type pressure blower systems for process gas handling, notably for butadiene plants, gas turbine gas fuel compression and process refrigeration.
reciprocating turbo blowers for hydrogen processes – hydrocracking, visbreaking, catalytic reforming

The demands placed on equipment in the chemical industry are particularly high. Toxic, corrosive and unstable gases are frequently a part of chemical production processes. Maintaining the purity of gases being handled is a priority in the pharmaceutical and biological industries. CB Blower Co. supply a range of fan / blower types to the chemical industry, from fans for boiler and incineration plants that supply heat and process steam, to fans that are used on exhaust and emissions control systems to equipment that handles the materials being processed. In such a diverse industry the range of applications is very wide but there is often the need for special materials to prevent corrosion by gases such as wet hydrogen chloride and hydrogen sulphide. The blowers are adapted to meet these special needs.

For additional information please refer to http://www.cbblower.com/coolair.html

Oleg Chechel
Ventilation Equipment Designer
CB Blower Co.

http://www.cbblower.com/custserv.html
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India light fitting industry is facing the burnt from China. China manufacturing sector is growing a lot as they spend a lot of money in research and development and develop the product in very reasonable cost. The cost of Chinese products is much lesser than India and the cost of Indian lighting products is far lesser than America or any other nation. Thus the best two countries thus left in competition are India and China for light fittings and Lighting solutions industry.
1.Lighting solutions and light fitting manufacturers in India are highly skilled and they produce really high quality products
2.The replacements that come in Chinese products are more than the replacements that come in Indian manufacturing products
3.China products are developed in high research and development machinery thus they cost high but as the government in china is really supportive thus they save on taxes and they earn through bulk orders and turnover sales.
4.Companies like General Electric and Philips are the tycoons for innovations and all innovation go through them. These companies have heavily invested in the Indian and Chinese markets
David C Philips, managing director, Philips – He said, thanks to China and India, the global construction equipment industry has recovered to project sales revenues of $82 billion in 2011 as against $77 billion in 2010 and $55 billion in 2009 after peaking at $100 billion in 2007. As of 2012 Philips is the largest manufacturer of lighting in the world.
Thus a huge competition is among these two countries. People from India are going to china and they get the imports done for the raw materials or the finished products and sell them in India now but this can be done till the time the import duty is not set high . If government will increase the import duty then it will be good for Indian manufacturers as Chinese products will come less in our country and more of Indian manufacturing products can be sold here and developed here.
The laws for the labor are strict in china but the laws for labor are very liberal in INDIA. Indian Government is somehow not supporting the manufacturing sector; otherwise India can grow 4 times of China in lighting sector. It is a need of an hour for the government to understand that they are doing no good for the country.

The economies of large scale enterprise or small scale enterprise both are very fragile at this moment. The mismanagement of economies weakening rupee, rising petrol all are visible factor for growing mismanagement of the Indian economy.
Thus major lighting industry focusing on domestic luminaries, street light fittings manufacturing, etc should be given encouragement by making stringent labor laws and lesser taxes should be levied such that products can be made at low cost.

If you are an entrepreneur with a small food or beverage company looking to take it to the next level, this article should be of particular interest to you. Your natural inclination may be to seek venture capital or private equity to fund your growth, but that might not be the best path for you to take. We have created a hybrid M&A model designed to bring the appropriate capital resources to you entrepreneurs. It allows the entrepreneur to bring in smart money and to maintain control.

We have taken the experiences of a beverage industry veteran, a food industry veteran and an investment banker and crafted a model that both large industry players and the small business owners are embracing.

I recently connected with two old college mates from the Wharton Business School. We are in what we like to call, the early autumn of our careers after pursuing quite different paths initially. John Blackington is a partner in Growth Partners, a consulting firm that advises food and beverage companies in all aspects of product introduction and market growth. You might say that it has been his life’s work with his initial introduction to the industry as a Coke Route driver during his college summer breaks.

After graduation, Coke hired John as a management trainee in the sales and marketing discipline. John grew his career at Coke and over the next 25 years held various positions in sales, marketing, and business development. John’s entrepreneurial spirit prevailed and he left Coke to consult with early stage food and beverage companies on new product introductions and strategic partnerships.

Steve Hasselbeck is now a food industry consultant after spending 27 years with the various companies that were rolled up into ConAgra. His experience was in managing products and channels. Steve is familiar with almost every functional area within a large food company. He has seen the introduction and the failed introduction of many food industry products.

John’s experience at Coke and Steve’s experience at ConAgra led them to the conclusion that new product introductions were most efficiently and cost effectively the purview of the smaller, nimble, low overhead company and not the food and beverage giants.

Dave Kauppi is now the president of MidMarket Capital, a M&A firm specializing in smaller technology based companies. Dave got the high tech bug early in his business life and pursued a career in high tech sales and marketing. Dave sold or managed in computer services, hardware, software, datacom, computer leasing and of course, a Dot Com. After several experiences of rapid accent followed by an even more rapid decent as technologies and markets changed, Dave decided to pursue an investment banking practice to help technology companies.

Dave, John, and Steve stayed in touch over the years and would share business ideas. In a recent discussion, John was describing the dynamics he saw with new product introductions in the food and beverage industry. He observed that most of the blockbuster products were the result of an entrepreneurial effort from an early stage company bootstrapping its growth in a very cost conscious lean environment.

The big companies, with all their seeming advantages experienced a high failure rate in new product introductions and the losses resulting from this art of capturing the fickle consumer were substantial. When we contacted Steve, he confirmed that this was also his experience. Don’t get us wrong. There were hundreds of failures from the start-ups as well. However, the failure for the edgy little start-up resulted in losses in the $1 – $5 million range. The same result from an industry giant was often in the $100 million to $250 million range.

For every Hansen Natural or Red Bull, there are literally hundreds of companies that either flame out or never reach a critical mass beyond a loyal local market. It seems like the mentality of these smaller business owners is, using the example of the popular TV show, Deal or No Deal, to hold out for the $1 million briefcase. What about that logical contestant that objectively weighs the facts and the odds and cashes out for $280,000?

As we discussed the dynamics of this market, we were drawn to a merger and acquisition model commonly used in the technology industry that we felt could also be applied to the food and beverage industry. Cisco Systems, the giant networking company, is a serial acquirer of companies. They do a tremendous amount of R&D and organic product development. They recognize, however, that they cannot possibly capture all the new developments in this rapidly changing field through internal development alone.

Cisco seeks out investments in promising, small, technology companies and this approach has been a key element in their market dominance. They bring what we refer to as smart money to the high tech entrepreneur. They purchase a minority stake in the early stage company with a call option on acquiring the remainder at a later date with an agreed-upon valuation multiple. This structure is a brilliantly elegant method to dramatically enhance the risk reward profile of new product introduction. Here is why:

For the Entrepreneur: (Just substitute in your food or beverage industry giant’s name that is in your category for Cisco below)

1.The involvement of Cisco – resources, market presence, brand, distribution capability is a self fulfilling prophecy to your product’s success.

2.For the same level of dilution that an entrepreneur would get from a VC, angel investor or private equity group, the entrepreneur gets the performance leverage of smart money. See #1.

3.The entrepreneur gets to grow his business with Cisco’s support at a far more rapid pace than he could alone. He is more likely to establish the critical mass needed for market leadership within his industry’s brief window of opportunity.

4.He gets an exit strategy with an established valuation metric while the buyer helps him make his exit much more lucrative.

5.As an old Wharton professor used to ask, What would you rather have, all of a grape or part of a watermelon? That sums it up pretty well. The involvement of Cisco gives the product a much better probability of growing significantly. The entrepreneur will own a meaningful portion of a far bigger asset.

For the Large Company Investor:

1.Create access to a large funnel of developing technology and products.

2.Creates a very nimble, market sensitive, product development or R&D arm.

3.Minor resource allocation to the autonomous operator during his skunk works market proving development stage.

4.Diversify their product development portfolio – because this approach provides for a relatively small investment in a greater number of opportunities fueled by the entrepreneurial spirit, they greatly improve the probability of creating a winner.

5.By investing early and getting an equity position in a small company and favorable valuation metrics on the call option, they pay a fraction of the market price to what they would have to pay if they acquired the company once the product had proven successful.

Dean Foods utilized this model successfully with their investment in White Wave, the producer of the market leading Silk Brand of organic Soy milk products. Dean Foods acquired a 25% equity stake in White Wave in 1999 for $4 million. While allowing this entrepreneurial firm to operate autonomously, they backed them with leverage and a modest level of capital resources. Sales exploded and Dean exercised their call option on the remaining 75% equity in White Way in 2004 for $224 million. Sales for White Way were projected to hit $420 million in 2005.

Given today’s valuation metrics for a company with White Way’s growth rate and profitability, their market cap is about $1.26 Billion, or 3 times trailing 12 months revenue. Dean invested $5million initially, gave them access to their leverage, and exercised their call option for $224 million. Their effective acquisition price totaling $229 million represents an 82% discount to White Wave’s 2005 market cap.

Dean Foods is reaping additional benefits. This acquisition was the catalyst for several additional investments in the specialty/gourmet end of the milk industry. These acquisitions have transformed Dean Foods from a low margin milk producer into a Wall Street standout with a growing stable of high margin, high growth brands.

Dean’s profits have tripled in four years and the stock price has doubled since 2000, far outpacing the food industry average. This success has triggered the aggressive introduction of new products and new channels of distribution. Not bad for a $5 million bet on a new product in 1999. Wait, let’s not forget about our entrepreneur. His total proceeds of $229 million are a fantastic 5- year result for a little company with 1999 sales of under $20 million.

MidMarket Capital has created this model combining the food and beverage industry experience with the investment banking experience to structure these successful transactions. MMC can either represent the small entrepreneurial firm looking for the smart money investment with the appropriate growth partner or the large industry player looking to enhance their new product strategy with this creative approach.

This model has successfully served the technology industry through periods of outstanding growth and market value creation. Many of the same dynamics are present in the food and beverage industry and these same transaction stru7ctures can be similarly employed to create value.