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LED prices have come down mainly due to large volumes

EM news bureau ,  Friday, March 18, 2016, 14:07 Hrs  [IST]


—Anil Bhasin, Senior Vice President – Lighting Business, Havells India Ltd

LED is said to be the future of lighting. How do you see prospects for the industry and for Havells as a leading LED lighting brand?

Yes, LED is the future of lighting. Two years ago, most of the companies did not view LED as a serious threat to the industry. However, in the recent past, the government has also taken initiatives to promote LED lightings – in both the lamp and the street light segments.

The government through bulk purchases through Energy Efficiency Services Ltd (EESL) has actually resulted in mass manufacturing of LED lighting. Has this resulted in LED lighting prices falling?

Havells LED 05.jpgYes, prices have come down mainly due to large volumes. The cost is directly proportional to the scale of operations. LED lighting, two years ago, did not pick up but when the government intervened through bulk purchases—streetlights and lamps—the cost has come down. Two years ago, LED was an expensive technology but today there is massive scale of operation resulting in manufacturing costs coming down. It has helped the entire industry.

CFL has its own challenges in terms of mercury content. The government wants CFL to be out and LED to be in. There is also no side-effect of LED lighting. They have long life and high lumen output per watt of electricity consumed. These two qualities have been picked up by the customer very fast.

Are you also supplying to the government through EESL?

Yes, we have an order of close to around Rs.74 crore for Rajasthan and Andhra Pradesh.

How big would be EESL as a demand driver to the LED lighting industry?

EESL is basically a startup. It is not likely to execute such kind of projects in the long-term. They are there to germinate the seed. One good thing about EESL is that the corruption level is zero! If all this municipal corporation business and distribution of lamps to the household is without “involvement of money,” manufacturers can confidently quote their rock-bottom prices. That has been the solid advantage of EESL.

The procurement of LED lamps by EESL has touched about 6 lakh lamps per day. What is your view?

Around 45 per cent of India is still today not electrified. It comes as a shock to people like me. This only means that I have not travelled extensively into the deeper reaches of India to see an unelectrified village! By using LED what we are actually doing is we are reducing the cost of investment into power generation. Secondly, we are giving a chance of lighting the villages in the shortest possible time.  Even in our houses, our lighting levels have increased. But if we have LED lighting, we can actually double our lumens at the same energy cost.

How has been the growth of Havells’ LED business?

Today, almost 70 per cent of the sales of our lighting division comes from LED lighting. Consumers also don’t have the hassle of frequently replacing lamps as the assured life of LED lamps is around ten years. Besides, the cost of LED lights at this point in time is not very high. One must remember that the cost of even replacing lamps in tall structures like warehouses is very significant.

How important is the government as a customer given that it accounts for 20 per cent of India’s total lighting consumption?

Government is a big customer. One good thing about the present government is that it is very transparent. We (the industry) would definitely like to deal with a customer that is clean, pays on time, and is looking for a quality product.

For your LED business, what is your capex plan?

We have two factories manufacturing LEDs; one is in Noida and the other is at Neemrana in Rajasthan. We already had our production lines that are being converted from CFL and incandescent lamps into LED lighting. There is therefore no additional capital expenditure involved as such.

India is said to be dependent on imports for LED drivers. What is the level of self-sufficiency?

All the drivers are manufactured by us in our own factory. But the components are sourced from outside.

Why are components outsourced?

We have the competency but the scale of operation that (say) China has, we don’t—at least at this point in time.

With all its positive aspects, how do you see the future of LED lighting?

The future is bright, at least for the next decade. But the challenge would come after that. (laughs)

What would be the challenge after that?

Once you install an LED fixture, it is going to last for 15 years. Then what do you do? (laughs). You cannot go to the client once again. Today, we can go to any client – old building or new construction—for replacing old lighting with LED or fixing new LED lighting. After ten years, the growth will be slower but India is a vast country with growing opportunities…!

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