LED lighting industry accelerates shuffling, traditional trade-type production enterprises are in danger
On September 27th, the Guangdong Provincial Department of Human Resources and Social Security announced the list of 41 enterprises involved in major labor security violations in the province in the second quarter of this year and investigated and rectified the situation.
Most of the 41 companies announced this time are manufacturing enterprises in the Pearl River Delta region, from Shenzhen, Zhuhai, Zhongshan and other places. The illegal facts are mainly based on wage arrears, ranging from tens of thousands to hundreds of thousands of yuan (RMB, the same below). Wait.
Among them, a lighting company attracts attention. The name of Zhongshan Weilai Lighting Co., Ltd. (hereinafter referred to as "Weilai Lighting") owed 71 workers to nearly 260,000 yuan and was ordered to rectify within a time limit.
This is not the first time this lighting company has been notified by the relevant government department.
In the first quarter of 2016, Zhongshan City employers announced the list of major labor security violations, and Weilai Lighting had long defaulted on wages. The labor compensation was not paid in full and in time according to state regulations, and it was ordered that the rectification would not be rectified.
Among them, Weilai Lighting owed arrears in 2016 for 175 employees in January with a total salary of 240,316 yuan, and issued an order to pay wages within a time limit.
In the 2016 semi-annual financial report of the listed company Xinbao (002705), Weilai Lighting also appeared on the list. According to the report, Weilai Lighting has defaulted on the company's 265,000 yuan payment, and the payment has not been recovered.
Inquired about public information, Weilai Lighting was established in 1993 and is a large-scale lighting company invested by Hong Kong Weilai Group Co., Ltd.
The website information shows that after nearly 15 years of development, it has become one of the largest manufacturers of outdoor lighting in China, and is also a professional manufacturer of Plastic rainbow tubes in China and even in the world.
Weilai Lighting has adhered to the route of high quality and fine products since its establishment. The company's FLEXILIGHT export brand, Symphony domestic brand and Weilai brand have become international famous brands of linear decorative lamps.
Because of its excellent quality, Weilai became the "Hong Kong Return", "Macau Return", "Sydney Olympics", "Thailand Royal Palace", "Tokyo Chinese Street Project", "Canada Consulate in Hong Kong", "Foshan Qiandeng Lake" Lighting supplier of international and domestic major projects such as Xiangguang Painting.
In terms of the company's relevant honors, it is also very rewarding. Weilai Lighting's flagship product series has won the title of “Top Ten Famous Brand Products of Zhongshan City†in 2002, “Guangdong Famous Brand†in 2004, “China Famous Brand Product†and “National Inspection-free Product†in 2005.
Coincidentally, just last week, Shenzhen Lezi Lighting was also exposed to wages owed to workers, suppliers' money, and the company’s boss ran. The same as Weilai Lighting, the business registration information of the two companies are wholly-owned enterprises of Taiwan, Hong Kong and Macau.
Traditional export-oriented lighting companies face difficulties
According to industry insiders, Weilai Lighting is mainly engaged in export sales, and there is not much publicity in China, and it rarely deals with domestic enterprises.
At the beginning of LED lighting, Hong Kong, Taiwanese and foreign companies have certain advantages (because of doing foreign trade, they will know more about foreign market information and cutting-edge technology).
With the continuous improvement of technology, scale and marketing in the domestic LED lighting new-enterprise enterprises and traditional lighting manufacturers, some traditional export-oriented lighting companies that are still doing according to the old model are facing the edge of being eliminated.
Behind the reshuffle of the LED lighting industry is driven by various factors such as the weak global economy, rising labor costs, and restructuring of the LED lighting market.
In 2016, the global economy is still in the midst of a turbulent cycle. Traditional manufacturing costs have risen, profits have shrunk, and overseas markets have been weak. The LED lighting industry is no exception, especially in the export market.
According to statistics, from January to May 2016, China's exports of lighting products reached US$15 billion, down 10% year-on-year, of which LED lighting products reached US$6.2 billion, up only 1.7% year-on-year.
Winning or losing does not matter. Starting in the heyday of traditional lighting, these lighting companies engaged in foreign trade, under the LED tide, are facing a huge survival crisis.
Whether it is a Hong Kong-funded enterprise, a Taiwan-funded enterprise, or a foreign enterprise, they lack something in model innovation compared with domestic-funded enterprises. Purely relying on overseas markets is particularly subject to the risk pressure of a single market.
LED enters the field of lighting and quickly becomes the protagonist. It impacts the market structure, changes the product form, and extends the lighting application space. Faced with this situation, it is especially important for companies to have the ability to adapt quickly to market changes.
Cost rise pressure continues to ferment
The rising cost is also a difficult rock that is on the head of many traditional lighting companies.
The appreciation of the renminbi, rising labor costs, rising raw material prices, high logistics costs and many other factors have combined, and at the same time, it faces the problem of power cuts and recruitment difficulties. A number of cost increases have been combined with lighting companies and light merchants, resulting in corporate profit dilution. Many companies do not take orders and lose money when they receive orders.
Since 2013, the RMB exchange rate has fluctuated widely, which undoubtedly increased the risk of foreign exchange exports, and the appreciation of the RMB against the US dollar also reduced the income and profits of export products.
At present, for most LED lighting companies, the cost pressure of rising raw materials in the first half of this year should not be underestimated.
"The cost pressure brought by the rising raw materials is quite large. For a few cents of profit, the company is also rushing to sell." A person from the lighting company in Zhongshan reluctantly said.
Under this circumstance, low-end lighting manufacturers and workshop-style small enterprises can hardly bear the pressure of operation. They can only fight the price war in the market, and the profits of the industry will suddenly drop. They will face the collapse and run. Danger.
In Zhongshan Gudu Town, more than 2,000 lighting manufacturing industries are still at the low end of the value chain. Due to the lack of core technology, own brands and marketing channels, enterprises have low added value, lack of bargaining power, and the pressure of rising costs is difficult. It is inevitable that you will be handed over and face difficulties.
"No innovation is waiting for death. At present, the domestic market share of domestic enterprises has surpassed them." An industry insider said that the transformation of LED lighting has caused a pattern change in the entire traditional lighting industry chain.
Shuffling is already the trend of the times. The LED product technology is constantly maturing, the price is close to the cost red line, and the profit space is getting thinner, so we must rely on scale to start.
In the past, especially Hong Kong-funded enterprises set up factories in China, and more were using their own overseas market resources and trade operation experience. But for the current LED industry, technology, scale, and capital are more advantageous and beneficial factors.
The above-mentioned person said that shuffling is a good thing for the industry. The output of the products is gradually increasing in size, the overall number of enterprises will be reduced, and the overall quality will be improved.
Wu Yulin, president of Foshan Lighting Association, said that there are still many LED lighting manufacturers, with fewer orders and great competitiveness.
Faced with this kind of competition is to see where the competitiveness of the company itself is manifested. The competitiveness of enterprises is still related to their own products. Product quality, innovation, marketing and other aspects are closely related.
The key to the reshuffle of small and medium-sized lighting companies is to see how companies transform, because transformation is inevitable.
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