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There is a strong movement towards sustainable lighting

Venugopal Pillai ,  Saturday, June 15, 2013, 11:31 Hrs  [IST]

Arun Gupta—Arun Gupta, Managing Director, NTL Electronics India Ltd

NTL, which started off as small manufacturer of lighting electronics in 1993, has today grown into what could be the world’s largest manufacturer of lighting electronics outside China. Arun Gupta, in this freewheeling conversation, discusses the illustrious corporate journey of NTL and shares his vision for the company. Gupta is very optimistic of the future of LED lighting in India and his company’s foray in the LED business in collaboration with Lemnis of Netherlands. An interview by Venugopal Pillai.

As we readily appreciate, NTL Electronics has seen phenomenal growth in a relatively short span of around a decade. Tell us how has been the journey since NTL’s inception in 2002.
NTL began its operations in the year 1993 and started its lighting journey in the year 2002 with small team. Our turnover has also grown from Rs.20 lakh in the first year of operations to Rs.675 crore in FY13. In 2010, a private equity firm, CX Partners, picked up a 20 per cent stake in the company. NTL has eight state-of-the-art manufacturing facilities spread over 500,000 sqft with a combined capability to manufacture 15 million units per month. The facilities, spread across Noida, Dehradun and Roorkee, employ a 4,500-strong workforce.

In the ten years of its lighting journey, NTL has become the largest electronics manufacturing company in the lighting industry in India. Today, by all estimates, NTL is probably one of the largest manufacturers of lighting electronics in the world outside China.

The lighting journey for NTL in 2002 began with manufacturing CFL ballasts. Over the years NTL has grown significantly in design capabilities. NTL has been a frontrunner in converting CFL lamps to HPF (High Power Factor) as well as making them more cost efficient by value engineering. Also, the first LED lamp in India, which could work on Indian power conditions, was developed and manufactured by NTL.

NTL Electronics works in the B2B space and we have been lucky in the fact that we have worked with the ‘who’s who’ of the industry and have been their “partner of choice” for a decade now. What has worked in our favour is unwavering commitment to quality, focus on client requirements, innovation and quick “go-to-market” manufacturing capabilities.

Today NTL Electronics is widely recognized for its design and manufacturing capabilities.

While we appreciate that CFL is intrinsically more efficient than conventional GLS (incandescent) lighting, we are sure that CFL technology itself has improved over time. Please elaborate and also highlight achievements at NTL in this regard.
In India, the maximum demand and usage of CFLs has been in households, followed by offices. The end-consumer has realized the potential of CFLs in saving on electricity bills and has adopted it. CFLs continue to be the growth driver in the lighting Industry, which is witnessing healthy growth.

CFLs need a good ballast to fire them and we at NTL Electronics worked on providing superior quality of ballasts and electronics for CFLs. Today, due to our single-minded focus on R&D, we have created products that are reliable, of superior quality and completely in sync with Indian electricity situation. Our biggest challenge was creating fail-free products that could work with the severe voltage fluctuations and we are proud that our R&D team has been successfully delivering better and sturdier products over time. NTL has been a frontrunner in converting CFL lamps to HPF (high power factor) as well as making them more cost-efficient through value engineering.

NTLNTL makes drivers and components for lighting solutions and also complete lighting products. This makes NTL a B2B as well as a B2C company. Please discuss
NTL Electronics makes lighting electronics and CFLs and is hence a B2B company. It has been a preferred supplier for top OEMs in the lighting industry.

In April 2012, NTL entered into a joint venture with Lemnis Lighting of Netherlands. The new company, NTL Lemnis is a total LED lighting solutions company. NTL’s foray in the B2C space is through this joint venture. NTL Lemnis has products and solutions for the European, African and Indian markets.

As you can see, our entry into the B2C segment is limited to LED products, which is practically a new segment where our B2B customers are really not our competition. NTL Lemnis is bringing products and solutions, under the globally-acclaimed brand Pharox. We will introduce futuristic technologies into LED space through this brand.

In fact, through our venture in LED industry, we would be creating more opportunities and add value to our B2B customers as well.

The Indian market is flooded with cheap CFL products imported from Chinese and Korean manufacturers. How are organized players and the market affected by this onslaught?
Chinese products have always been in India. Till a few years ago, we were dependent on China for lighting electronics for CFL electronics and ballasts, and even complete products. Today the scenario has changed drastically. Our typical electricity situation made us innovate and create India-focused solutions, which have found major buyers.

Cheaper Chinese imports are slowly losing ground as the Indian consumer has started demanding, and getting, better quality CFLs manufactured in India.

Do you feel that there has been a fairly deep penetration of CFL in the Indian lighting industry? If not, what have been the roadblocks?

Yes, CFLs have seen a fair amount of penetration in India, both in institutional and domestic sectors. Schemes like Bachat Lamp Yojna were very helpful in promoting CFLs. The price levels of CFLs are now at an acceptable level for the end-consumers. Factors like longer life and greater energy savings than traditional lighting products have served the cause to a great extent.

But at the same time the advent of LED technology has opened new doors for Indian Lighting Industry and gradually the LEDs will capture most of the market within few years.

NTLTell us more on your recent collaboration with Lemnis for LED lighting.

NTL is the undisputed leader in manufacturing & development in the lighting electronics space in India. Today, we have strengths in driver development, processes & operations. Since our foray in the lighting space, we have been working towards a focused goal -- development of the most energy efficient lighting solutions. And today LED is the obvious answer. We had always intended to further evolve in an organization with global footprint. We began working with Lemnis Lighting from the Netherlands a few years ago. Lemnis is one of the pioneers in LED technology and product design.

We realized that both NTL and Lemnis had a single-minded approach in providing sustainable lighting solutions. We were looking for synergistic strengths to make a strong statement in this domain and mutually decided to form a joint venture.

Our JV has all the traits that are required to succeed in LED market; from being pioneer in product design & development to being one of the largest manufacturers of lighting electronics in the world. The most critical part of an LED product is its electronic driver and we have already kept our focus in enhancing driver development capabilities, thus developing products even for areas with unfavourable power conditions. We have already breached the volume barrier in LED lighting by selling over 3 million LED bulbs in just one calendar year!

Today NTL Lemnis is poised to make a strong impact. The mass production of LED lamps is also expected to substantially lower costs. We believe in applying cutting edge technology to our products, so that we stay ahead of the competition. NTL Lemnis is primarily focused on the geographical markets of Europe, Africa and India.

Although LED is clearly the most energy-efficient lighting solution, high capital costs have been a deterrent, we feel. What is your view?
LEDs are 50 per cent more energy-efficient than CFLs. LEDs have a longer life than CFLs, theoretically they can last up to 50-60K hours, but as of now industry is assuring life of 20-30k hours. LED-based lighting is a new technology. Consumers are yet to understand its benefits and adopt them. In near future, with evolving technology, LEDs will take a major share in the lighting industry, which will help in reducing costs. Also to add LEDs in domestic use will take some time but their implementation has already started in the professional sector because of its payback period.

When they began, CFLs were very expensive too. But volumes made the prices come down and government intervention (by way of subsidies) helped the cause. We believe that with increased penetration, LED prices will come down as well.

Here the value proposition, very low energy consumption, will work in favour of LED. Typical energy guzzling environments, for example those that work 24x7 and have high demand of lighting, will be the earliest adopters.

What have been the recent trends in the Indian market with respect to accepting LED-based solutions? What would consider as your biggest consumers?
There is a strong movement towards sustainable lighting solutions and as of today, LEDs seem to be the next big thing. Europe has already banned high-wattage incandescent bulbs and is slowly phasing out the lower-wattage ones as well. There is also not much of a market for CFLs in Europe and they are shifting towards LEDs. After the tsunami in 2011, Japan is focused on replacing all incandescent bulbs and fluorescent lamps with more energy-efficient LED lighting by 2020. Big players like IKEA have started replacing CFL with LED bulbs from their stores worldwide. In fact IKEA has taken it upon itself to completely move out of CFLs by 2015.

Lighting industry in India is also witnessing a robust growth. It is believed that the Indian LED lighting industry will be in the range of Rs.8,000-12,000 crore in the next five years timeframe. NTL Lemnis is eyeing a 5 per cent market share in the next five years.

A McKinsey report has predicted that 70 per cent of lighting will become LED based by 2020. The key segments identified in this changeover will be hospitality, retail, outdoors and residential. In general lighting, the percentage of home buyers for LEDs is still low due to high costs but this too is changing rapidly.

As already discussed, our biggest customers will be those that have very high energy consumption, for example heavy engineering, service industry, IT, telecom, etc. Here the return on investment will be the quickest and therefore these customers will convert the quickest.

NTLWe learn that government is a huge consumer of electricity for lighting. Do you therefore see government adopting energy-efficient lighting solutions such as LED, CFL, etc. in a big way?
Yes, we are hopeful that the government will also convert to LEDs from the CFLs, giving a huge impetus to the growth in the sector.

Street lighting presents an excellent opportunity for energy efficient lighting like LEDs, also in conjunction with renewable energy solutions like solar energy. What is your take on the matter?
Market of India’s LED street lighting, estimated to be about $55 million in 2011, is projected to grow at more than 47 per cent annually, according to a study by Frost & Sullivan. We have seen a major interest at state and Central level, where the governments are running pilot projects to check the efficacy of the programme.

We at NTL Lemnis are strongly geared to target this segment and have a portfolio of products for street lighting segment.

With much achievement already to its credit, how do you see the road ahead for NTL in the next, say, five years?
We are expecting that our sales turnover will reach around Rs 1,700 crore in the next five years, and out of this, we expect our LED company NTL Lemnis to contribute as much as Rs.600-700 crore in revenue. The company will also expand the capacity of its LED lights to 15-20 million units annually in the next five years, from the current 5 million.
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