Government subsidies to push Elec-Tech gamble?

"Over the past three years, many people ask me, say I gamble LED, indeed. We buy chips in several cities across the country, but also to build a huge LED industry chain".

The day before, on the sixteenth day held by Wu Changjiang NVC announced the acquisition of 20.05% stake in the company, Elec-Tech chairman Wang Donglei Conference for its response to the industry in the field of LED lighting and a series of "gambling" behavior questioned.

Weak small appliances illuminate LED

In this conference, NVC invited to many regional distributors. This is known as "the first step, Elec-Tech via NVC to open up the domestic market, then the two sides will carry out more cooperation".

Since 2009 the company through a private placement, short-term financing bonds, corporate bonds, raising nearly 3 billion yuan investment including Elec-Tech epitaxial wafer chip, package to the layout and application of LED whole industry chain. Public data show: 2010, 2011, the first three quarters of 2012, government subsidies for Elec-Tech LED project was included in the current profits and losses were 270 million yuan, 310 million yuan, 164 million yuan over the same period, the company net profit was 196 million yuan, 392 million yuan, 115 million yuan.

Policy support from the government in the past three years to promote the development of the company's largest power in the field of LED lighting. The company in 2012 semi annual report also showed: OEM small household appliances manufacturing business for European companies, accounted for nearly 7 of the proportion of revenues Elec-Tech, LED lighting business layout for 3 years, is still in the climbing period".

LED lighting has become the only way to Elec-Tech of small household electrical appliances.

"In 2008 the global financial crisis, many enterprises rely on OEM OEM survival appliance has sounded the alarm to the China, Zhang Yanbin Dean Orville Consulting Institute, such as the export business to Europe and the United States mainly OEM enterprises is affected by the economic environment impact is more obvious, the government is also the home appliances to the countryside policies to guide business transformation enterprise.

Is to take the road of small household electrical appliance brand, or to find new business growth point of transition has become the biggest problem placed in front of Wang Donglei.

"A chance, in China LED lighting industry the first development of the Pearl River Delta Wang Donglei, did not like the small household electrical appliances as Canbo counterparts, fought in the domestic market to expand its own brand of small household electrical appliances business, but then decided to join the market competition is fierce, and by the focus of government policy support, domestic LED lighting field" enterprise technology is relatively weak, a de Ho Runda had engaged in small household electrical appliances overseas business insider.

Statistics show that: at present in China's more than 4 thousand LED lighting companies, engaged in epitaxial chip production enterprises less than 50, packaging enterprises in about 1000, the remaining all for lighting applications.

It is to see Chinese enterprises in the LED lighting industry chain gaps, since 2010, the total funds raised nearly 3 billion yuan, the industrial layout and the core technology breakthrough in LED upstream epitaxial chip and package. At present, the company's MOCVD device for epitaxial chip manufacturing on up to more than and 90 units, there is news that, which is in the state of production equipment less than 50%".

Pull to help NVC starting again

Since 2011, affected by the weakening effect of government policies, the external economic environment and the weak market oversupply and other factors, only appeared in Shenzhen area of 4 output value in billion LED lighting enterprises shut down. For a time, China's LED lighting market contains huge business opportunities triggered by the Chinese and foreign giants collective chaos, so many companies fell on the eve of the outbreak of LED growth on the eve.

The channel, is considered the largest development short board layout LED lighting elec-tech.

Zhang Yanbin pointed out that "Elec-Tech over the years in the development of small household electrical appliances business, as has been the foreign OEM, did not establish the corresponding marketing system and sales network in china. After entering the LED lighting industry, this short board has become the biggest obstacle restricting the development of enterprises".

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