Sunfor Light Co Ltd is one of the early players in China's LED lighting business. Provided to China Daily

As competitors focus on semiconductor chips for LED products, one Chinese company sets on a different path

Zhang Ming, president of Chengdu-based Sunfor Light Co Ltd, a leading LED lighting producer in China, is in uphill battle against Philips and Osram AG, the two largest lighting manufacturers in the world.

He knows he won't be able to beat them, but he isn't planning on joining them either. Whereas Philips and Osram are both focusing on semiconductor chips for LED products, Sunfor Light is taking a different route: fluorescent powder.

It's this strategy of separating from the pack that Zhang, who is also a vice-chairman of the China Association of Small and Medium Enterprises, believes will soon pay off against international competitors.

Sunfor Light, located in Sichuan province, is scheduled to bring its LED lighting products, based on fluorescent powder, to the market in November. LED (light emitting diode) is a semiconductor light source and the latest lighting technology prized for its superior energy efficiency, life span and being environmentally safe.

By using fluorescent powder, Zhang says Sunfor Light's latest products can be 20 percent more energy efficient than common LED products, while also being 20 percent cheaper.

"This niche market is expected to bring a lot of business opportunities to us," he says.

Sunfor Light, founded by Zhang in 2004, is one of China's early movers in its LED lighting sector, which is seeing more opportunities for growth because of China's desire to increase energy efficiency and cut down on its carbon emissions.

Zhang admits that from the outset, he has had no intention of getting immersed in semiconductor chips, seen as the core of LED lighting technology. "The research and development of chips is not only time-consuming, but also requires a lot of professional engineers. All in all, it is a competition of money," he says.

He says that company revenue surged to around 270 million yuan ($42.57 million, 33.27 million euros) last year, up from 20 million yuan in 2007.

But the 2011 figure is still a drop in the bucket compared to the earnings of Philips or Osram. Sunfor Light is also at a major disadvantage in terms of state-of-the-art technologies and patents, most of which are owned by large foreign companies with an abundance of experience in the sector. Both Philips and Osram have more than 100 years of experience in lighting.

"To compete directly with the big boys in an area we have no strength isn't a wise choice," Zhang says.

What Sunfor Light does have, however, is an edge in fluorescent powder-based LED lighting technology, a cutting-edge technology that the Ministry of Industry and Information Technology granted 10 million yuan in August toward research and development efforts.

Zhang actually envisioned himself investing in LED lighting until 2003. In the midst of a construction project, he was in Shenzhen to help the city build its first ever subway line.

"We came across a problem when building up some lighting guidance to lead passengers to the subway in case they cannot find the entrance at night. At that time, all the other parts of the construction site had been finished and there was no extra budget for us to build the access to power if we chose ordinary lighting products," he says.

Zhang's challenge was to find something that can light up at night without power. After scouring the Internet, he found a fluorescent-based LED lighting product powered by sunlight from South Korea. He successfully finished the project.

"The cost of our solution was around 4 million yuan. It would have had cost 20 million yuan if we had used ordinary lighting products," he says.

It was at this time that Zhang saw the usefulness of LED products and how the technology could be something huge. He then started to pump his earnings from his construction business into LED products.

"We needed incomes from other business sectors to support LED lighting before 2009 but now it has become a pillar sector for our company," he says.

Sunfor Light's products were installed in several stadiums for the 2008 Beijing Olympics and the majority of urban lighting projects in Sichuan. It is also one of the major LED lighting suppliers of the Shanghai Expo in 2010.

Zhang says his success in LED lies in his persistence in building up the company's own strength. About 8 percent of the company's revenue is used on research and development every year. The financial push has led to 300 patents; as many as 170 are toward fluorescent powder-based LED lighting.

"It is a brutal world in LED lighting outside especially with the arrival of the major typhoons from the West. But I do believe small companies like us can survive with their own strength. After all, there is such a big lighting market in China," he says.

mengjing@chinadaily.com.cn

(China Daily 09/14/2012 page13)