There has been a de­cline in the un­or­gan­ised mar­ket for LEDs, says Gau­tam Seth, Joint MD, HPL Elec­tric and Power Ltd, in an interview.

Opines Gau­tam Seth, Joint Man­ag­ing Di­rec­tor, HPL Elec­tric & Power Ltd., in an in­ter­ac­tion with Mon­ica Chaturvedi Charna, on the role of EESL in driv­ing the LED mar­ket in In­dia, fu­ture of un­or­gan­ised play­ers and busi­ness op­por­tu­ni­ties ren­dered by the Smart

Power Watch India - - CONTENTS -

Kindly shed light on the com­pany’s scope of op­er­a­tions in the light­ing space and have you phased-out CFLs com­pletely?

HPL has been do­ing PCBs for CFLs, and driv­ers and PCBs for LEDs in house. This gives us an edge in the mar­ket. The CFL mar­ket is shrink­ing very fast so we have ac­cord­ingly right-sized our fac­to­ries. We will con­tinue to mar­ket and sell the prod­uct till there is a de­mand. Our fo­cus in terms of R&D, pro­duc­tion and sales is now around the LEDs. This is be­cause the sec­tor is grow­ing very fast and nearly 75 per cent of the light­ing rev­enue is com­ing from LEDs. We ex­pect that by the end of this year, our fo­cus will com­pletely shift to LEDs.

HPL has still not be­come a com­mon brand name among house­holds in the LED light­ing so­lu­tions do­main. What is the rea­son for this?

We have a fairly large distribution net­work, which we have built over the years on two fac­tors: Push­sales ba­sis and our re­la­tion­ship with deal­ers. Although our brand is not as vis­i­ble as some of the com­peti­tors, in the last two years end­ing FY2016, we have spent al­most Rs 21 crore on brand ad­ver­tis­ing. Go­ing for­ward, we plan to build our brand in a much big­ger way so that there is a bet­ter brand re­call value and HPL be­comes a house­hold name.

Have you con­sid­ered bid­ding for EESL ten­ders?

The first project of EESL for street-light­ing in Vizag city was done by HPL along with Philips. It was a very pres­ti­gious order which was done in record time, es­pe­cially be­cause parts of the city were de­stroyed in the cy­clone and the au­thor­i­ties wanted it to come up very quickly. Street light­ing was an im­por­tant part of re­viv­ing the city. Over the pe­riod, we have done a few or­ders/ projects with EESL, but in the last few months, since LED prices have come down very sharply, we no longer see it vi­able to get into their ten­ders. We are not tak­ing their bulb or­ders also. In the street light­ing seg­ment, they keep com­ing up with projects where we feel the mar­gins are bet­ter, and there is some club­bing of tech­nol­ogy in­volved. So, we are open to bid­ding for such or­ders.

How are you en­gag­ing your­self with the government’s Smart City mis­sion?

We have bagged an order un­der the Smart Cities mis­sion from Bhopal for smart light­ing. The over­all value for this order is Rs 70 crore, and this is in con­sor­tium with Bharti In­fratel, Eric­s­son and HPL wherein, we are of­fer­ing smart light­ing so­lu­tions. The strength of each com­pany was con­sid­ered for

the ten­der, and HPL’s strength lies in elec­tronic man­u­fac­tur­ing and R&D in­te­gra­tion.

On the side­lines of the Smart Cities plan, street light poles in Bhopal are in­te­grated with tele­com tow­ers, smart light­ing and Wi-fi in­te­gra­tion. There are security cam­eras in­stalled and each street light will be mon­i­tored and con­trolled from the cen­tral server. These are smart street lights in the true sense.

Have you tied-up with any tech­nol­ogy part­ners for this project?

The street light­ing and com­mu­ni­ca­tion part is done by HPL but the tech­nol­ogy part gets in­te­grated with the works that Eric­s­son and Bharti are do­ing. All the func­tions get merged into one soft­ware for smooth func­tion­ing.

How much has EESL af­fected the busi­ness of LED light­ing com­pa­nies like HPL, con­sid­er­ing that cus­tomers are get­ting far cheaper prod­ucts through EESL’s mass pro­cure­ment scheme?

The im­pact has been both ways – Had EESL not come into the mar­ket, the mar­ket would never have ex­panded the way it has. They cre­ated the right aware­ness among con­sumers, which en­abled the mar­ket to ex­plode. The level of growth that EESL’s in­ter­ven­tion en­abled in the LED in­dus­try in a span of 1-2 years, would have been achieved in at least 4-5 years. So, there has been a price dis­rup­tion which has led to a con­sol­i­da­tion in the in­dus­try.

On hind­sight, a lot of non-se­ri­ous play­ers emerged in the mar­ket who will even­tu­ally have to exit be­cause they will not be able to adopt newer tech­nolo­gies and com­pete on the pric­ing as­pect. Hence, only the fittest will sur­vive. Prices are go­ing down pri­mar­ily for two rea­sons – The vol­umes are go­ing up ex­po­nen­tially and sec­ondly through adop­tion of new tech­nolo­gies.

Has this ini­tia­tive been able to cut down dump­ing from the out­side mar­ket, es­pe­cially China? What is the cur­rent share of the un­or­gan­ised mar­ket?

There surely has been a de­cline in the un­or­gan­ised mar­ket. This is be­cause un­or­gan­ised play­ers are not able to keep up with the tech­nol­ogy upgra­da­tion, which doesn’t let them com­pete on the pric­ing as­pect.

Which note­wor­thy change in tech­nol­ogy has hap­pened in re­cent times in the LED space?

The ear­lier 7W and 9W bulbs used to be very big. But now, the size has rea­son­ably shrunk with bet­ter lu­men out­put. This re­flects on the tech­nol­ogy strength. There are bet­ter LED chips com­ing in the mar­ket that are much more pow­er­ful but have the same elec­tric­ity con­sump­tion rate. Even the cir­cuit size and ther­mal char­ac­ter­is­tic of the LED bulb have come down. Since the heat dis­si­pa­tion has come down, there is no need for a big­ger frame for the bulb. All this even­tu­ally cuts down the cost.

What is the in­vest­ment that HPL has put in R&D for the LED seg­ment and go­ing for­ward, what are your plans?

HPL has a com­mon R&D plat­form for the var­i­ous ver­ti­cals that we deal in. So, giv­ing a seg­re­gated in­vest­ment fig­ure would be dif­fi­cult. Hav­ing said this, we had spent Rs 8-9 crore in the last year on R&D, the ex­penses of which mainly go into em­ploy­ing the staff. We have nearly 100 peo­ple in the R&D depart­ment and they are work­ing on prod­uct-wise R&D as well as on the tech­nolo­gies per­tain­ing to com­mu­ni­ca­tion, ba­sic elec­tronic cir­cuits, etc.

Even in the switchgears seg­ment, we have de­vel­oped our own mi­cro­pro­ces­sor-based MCCBs. So, there is a lot of fo­cus on me­chan­i­cal switchgears com­ing into elec­tron­ics. LED can now be cat­e­gorised as an elec­tronic in­dus­try and even­tu­ally, all the elec­tri­cals and light­ing are mov­ing to­wards elec­tron­ics. Since elec­tronic man­u­fac­tur­ing and R&D are our strength, go­ing for­ward, I see the com­pany grow­ing strong and steady.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.