07/19/2016 14h30

LED lighting attracts investment as demand grows

Valor International

Since Brazil banned the manufacturing of incandescent light bulbs early this month, the local lighting industry has been shifting more of its production to LED lamps.

More companies have been setting foot in this market, aiming to seize the trend. That is the case of ATME Eco Solutions, which in August will open a unit in Jundiaí, São Paulo state, to manufacture LED lamps and fixtures, with capacity to produce 360,000 lamps and 60,000 fixtures per month.

Because of such investments, the Brazilian Lighting Industry Association (Abilux) reviewed their sales projections for the sector this year. Until then, it expected a 7% decline from 2015. Now, it forecasts stability in relation to the R$3.9 billion of last year.

For the LED segment, Abilux expects 30% demand growth this year, from 81 million bulbs sold in 2015.

Avi Meizler, president of ATME Eco solutions, also forecasts growth in the segment. The company’s plans include expanding its monthly production to 720,000 bulbs per month in the first half of 2017. Regarding fixtures, used in public lighting, the production is expected to reach 86,000 per month.

In addition to the Brazilian market, the company also intends to export to other Latin American countries. “We believe we will export from 40% to 50% of our production,” Mr. Meizler says.

The production facility will be inaugurated in August, but during the process of capacity expansion, in early 2017 the company is likely to have 70% to 80% of local content.

“The only thing we will continue importing is the LED microchip, which really doesn’t pay to manufacture in small scale,” Mr. Meizler says.

Importing LED lighting is the standard for all companies that make such products in Brazil. The argument is that the microchip is expensive and, in order to have a viable production, it needs very large scale. That is why China concentrates LED manufacturing, exporting for nearly the entire world.

Philips and GE, through its Current unit, also import LED for assembling its lamps and fixtures.

Along with taking advantage of the greater demand for such light bulbs, because of the 85% energy savings they have in comparison to incandescent bulbs, LED manufacturers also want to ride the recent wave of public-private partnerships (PPP) in big Brazilian cities to replace the public lighting system with a more efficient one.

“We believe we will have a lot of work in the next 20 years, not only in Brazil but in the entire Latin America. They will have to replace their lighting systems, both in the public and in the private sectors. It is a global trend and Brazil and Latin America are part of it,” Mr. Meizler says.

ATME Eco Solutions is considering taking part in PPPs of public lighting in Brazil, depending on the economic viability of each case.

In a recent interview with Valor, Rodrigo Martins, chief of Current, said the company was also negotiating contracts to supply lighting fixtures to Brazilian cities. “There are more than 80 PPPs open. We’ve had always thought of bringing the plant to Brazil,” he said.