Time: August 8, 2012
Venue: Wuxi Junlai Intercontinental Hotel Press conference guests
Director of the Wuxi New District Management Committee Mr. Ji Kejian
Deputy Director of the Wuxi New District Management Committee Mr. Hong Yanwei
CEO and Chairman of the Board of Directors of OSRAM Germany AG Dane Mr.
Mr. Aldo Kamper, CEO of OSRAM Opto Semiconductors Co., Ltd.
Mr. Wu Shengbo, CEO of Osram Asia Pacific Co., Ltd. Asia Pacific
Dane: Good morning, ladies and friends, some of you have participated in our groundbreaking ceremony. This is a very important event. At the same time, I also see that it is raining outside. Water is a very auspicious thing, indicating good development for our future. Let me introduce myself briefly. I am Dane, CEO and Chairman of the Board of Directors of Osram Germany GmbH. For those who don’t know much about Osram, please allow me to give a brief introduction to Osram.
Osram is a company headquartered in Germany. We mainly produce lamp sources and lamps, and have a hundred years of tradition and experience in the industry. At the same time, Osram is also a wholly-owned subsidiary of German electrical engineering giant Siemens. We plan to be publicly listed in 2013. With total global revenue of 5 billion euros in 2011 and more than 40,000 employees worldwide, OSRAM will become the world's largest independent lighting company. Over the past few years, Osram has successfully established itself as a one-stop supplier, offering a complete product line from lighting components to conforming solutions. Osram is a leader in automotive lighting applications. Now, one out of every two newly sold cars is equipped with our company's LED products. In addition, one out of every two cinemas in the world uses OSRAM products. At the same time, Osram is also a leader in the field of projection. All in all, Osram has been working hard to move forward and has now become the second largest manufacturer in the global lighting market.
In the past one hundred years of history, we have been in the LED field for more than forty years, so we have accumulated very rich experience in related industries. In the increasingly active lighting market, technological changes in various fields are changing with each passing day, and this experience gives us a huge advantage. On the one hand, we are experiencing the upgrading of traditional products. China will gradually phase out incandescent light bulbs starting from October this year. You must have realized this. In addition, you can see the increasing popularity of high-value LED products. Our main growth drivers include demographic changes and the spread of electrification, which drive continuous sales growth with high energy efficiency and high decarbonization rates on the one hand and value growth on the other.
The Chinese government hopes to achieve about 65% LED street lighting coverage by 2015. The goal is very ambitious and we fully support such an approach. Because this is consistent with the global trend of "energy efficiency" and also complements our product portfolio with a long tradition of efficient and energy-saving products. Today, more than two-thirds of Osram's global revenue is generated by green energy-saving products. In 2011, 25% of our revenue came from LED products. Especially considering the global popularity of LED, it has reached about 10% in 2010.
Ladies and gentlemen, this industry is at a turning point towards a golden age. A study by management consulting firm McKinsey shows that the total global lighting market volume will grow from about 80 billion euros in 2011 to more than 110 billion euros in 2020. Our growth in the Chinese market is particularly strong. According to the above-mentioned research, China's general lighting market will grow at an annual rate of 8% from 2010 to 2020, which will be twice the growth rate of the global market. But even in China transitions like LED will become a major growth driver. The market share of the LED market in 2010 was 9%, and it is expected that the market share will increase to about 60% by 2020. Osram has also positioned its global area of influence to cover all growth markets, especially China, and we are taking a corresponding strategic approach in this region, which means that we have a localized management team that understands the local language and culture. We also have a localized sales force to meet the needs of local customers, as well as localized R&D and product management to understand the needs of local customers, as well as localized production, manufacturing and localized procurement. supply chain, which can further reduce the cost of our production in China
Now speaking in numbers, Osram has 6 production bases, 2 LED solid-state lighting (SSL) design centers, 2 sales offices and about 12,000 employees in China. Among them, our contractors make us a very important competitive force in China. The new factory in Wuxi will create more than 1,500 job opportunities in the later period. Osram products have been entering China for 80 years and now cover the entire value chain from components to solutions. China is now regarded as the third largest domestic market after Germany and the United States. Based on this long-term historical experience, we are now moving towards the next stage as a good partner with Chinese partners for mutual benefit. The new factory in Wuxi brings us closer to local customers and also makes our work faster, more efficient and more effective. The new factory will ensure we can provide you with the right product at the right price at the right time.
Osram's innovation and application in the Chinese market have always been advancing hand in hand, and this can only be achieved through close and honest cooperation with local partners. This is what we have always followed. I am very grateful to the Wuxi government and leaders for their strong support. I also hope that today, August 8, is a good sign for our future cooperation and success. Thank you very much
Moderator: Thank you very much Mr. Dane. According to research, LED lighting will account for 20% of China's total lighting market in 2012, and the establishment of Osram's new factory in Wuxi will further strengthen Osram's position in the Chinese market and expand its market share. At the same time, it can also create greater opportunities in China's huge market. Okay, ladies and gentlemen, now we have Mr. Wu Shengbo, CEO of Osram Asia Pacific Co., Ltd. Asia Pacific, to introduce to you Osram's further commitment to China and Asia.
Wu Shengbo: Dear friends from the media, you can take off your headphones. It will be more convenient for everyone. Thank you for attending today's event and witnessing with us the groundbreaking ceremony of our LED packaging factory in Wuxi. As we all know, Asia has been an important source of customers for Osram for more than 80 years. China has also become a very important market for us since 1995. Since then, Osram has maintained close ties with this region, especially the Chinese market. We have experienced very rapid growth in this region over the past twenty years. I am also very fortunate to have witnessed the rapid growth of China and Asia in the past few years, especially in the lighting industry. At present, Asia has become the largest market in the field of general lighting and LED lighting, with market sales last year reaching 20 billion euros and 1.5 billion euros respectively. By 2020, we estimate that China's LED lighting market will account for 42% of the Asian LED lighting market and about 20% of the global LED lighting market. It is expected to bring in revenue of 11 billion euros.
While our coverage in Europe and the U.S. continues to grow, the sheer size of the China and Asia markets will continue to lead this region in terms of our revenue. As existing data shows, the global lighting industry is undergoing a large-scale change, and I am honored to tell you that Osram has been leading this process. In China, we are implementing strategic transformation in four aspects to promote the development of the lighting industry.
First of all, products in the lighting industry are transforming from traditional to transitional lighting, including energy-saving, high-value environmentally friendly lighting products and LED retrofit lamps. This industry is currently developing from transition to transformation. Osram continues to promote this process and promote the transformation of this market by providing total lighting solutions. These include a complete range of solid-state lighting, management systems and energy solutions.
Secondly, our continuous promotion of the strategy of moving from the West to the East, using the East to serve the East, and from the East to the West has also formed a good localized operating model, bringing good benefits and business growth to China and the world. From the West to the East means bringing German high-tech products and high quality to the local market to ensure that the products meet international standards. Serving the East with the East means that we provide high-quality products that meet local needs and implement the five aspects of localization: the first is localized management, the second is localized responsibility, the third is local product R&D and management, providing targeted products and solutions that meet the end market for the regional market, the fourth is localized R&D and innovation, and the fifth is to obtain greater market opportunities through local procurement and local manufacturing. From the West to the East is also a process of future development, making China the center of our world-class products and services, using China as a base to serve the global market.
Third, we will continue to expand market development in China. Currently, we are developing very well in China's top and high-end markets. At the same time, we are also aware of the huge potential of China's rapidly developing terminal market. We very much hope to expand development in this field through localization.
Finally, Osram attaches great importance to China's lighting market and is committed to providing products across the entire value chain, including components, lighting equipment, and lighting management systems to overall solutions and value-added services.
Dear friends from the media, the Wuxi LED packaging plant laid the foundation stone here today. This is a core component of our China and Asia-Pacific strategic development. After we are officially put into operation in 2013, the packaging plant will increase our global production capacity and support our factories in Penang, Malaysia and Germany. The factory can also help us attract more local partners and gain access to the local market to develop the world's largest lighting market. As Mr. Dane said this morning, Wuxi will also benefit from this. The factory will bring new high-skilled job opportunities and more market requirements for innovative high-performance products, which will make Wuxi the center of China's LED lighting production. We believe that with the strong support of Wuxi City, the factory will play an important role in promoting and promoting the development of new LED lighting applications in China and Asia. Ladies and gentlemen, I am very happy to attend today's event. Before I end my speech, I would like to once again thank the leaders of the New District of Wuxi Municipal Government for their great sincerity and full support, which made this factory project finally a reality. We believe that with a first-class business environment, excellent infrastructure, and experienced business partners, With a large number of high-quality talents and the geographical advantage of being close to customers, Wuxi is an excellent partner for us. Thank you again for attending today's event.
Moderator: Thank you Mr. Wu for your wonderful speech. With our Osram settling in Wuxi, I believe we will be able to create a wonderful and brilliant future. Ladies and gentlemen, it's time for our media availability. Dear guests, our Q&A time will be conducted in Chinese, so please put on your headphones. We hope that friends from the media can ask questions in Chinese.
Question: What is the difference between the Chinese market and foreign markets in terms of LED product development or application preferences?
Aldo Kamper: Generally speaking, the challenges encountered by our entire lighting industry are the same. Whether in China or elsewhere, all R&D activities we engage in are to further improve people's living standards, while enabling our lighting products to have more application fields and application prospects, while continuously reducing costs, and being friendly, environmentally friendly, and green to our environment. This is the overall trend and feature. However, each place has its own characteristics. We need to design corresponding products and adjust index parameters according to local characteristics and local environmental requirements and standards. Of course, we have all said that the same product has many different application fields, and all application fields must be combined with local elements. Only in this way can we ensure that these products produced to meet local needs can be used locally.
Moderator: Thank you to the guests for their answers, and also to the reporters for their questions. Let’s move on to today’s second question.
Question: After the completion of Osram's new factory in Wuxi, what breakthroughs will the new factory's products have in terms of energy-saving innovation and LED technology? Thanks.
Dane: In fact, Osram has a history of more than 100 years of traditional technology research and development. In the past ten years, we have also seen technological development spanning ten years as a generation. It can be said that we are a technology-driven enterprise. Ultimately, we believe that there is no end to the development of technology. Our current LED technologies are achieving new breakthroughs and new leaps on the basis of constantly surpassing our predecessors, so I would like to say that we have always been an enterprise that pays great attention to energy conservation and emission reduction, and is also focused on energy-saving innovation. As mentioned in our previous introduction, we all know that more than 20% of electricity is now consumed by lighting equipment and lamps. Therefore, we believe that energy saving in the field of lamps and lighting is more important. If you can use more resources and wisdom in energy saving of lamps and lighting products, it will be very beneficial to the future green development of our entire world and the entire earth, and will benefit future generations. Therefore, we are a company that has always been famous for the production of energy-efficient lamps and energy-saving products. It is also the basis of our entire development history. It continues to inspire generations of Osram people to develop new generations of lamps, and at the same time, it further improves our lives. quality. It can be said to be the goal that each of us diligently pursues.
Moderator: Thank you reporter friend for asking. Next is the third question.
Question: Building a factory in Wuxi is a major strategy for Osram to expand into the Chinese market. Why did Osram choose to strike hard at this time? Compared with other competitors, what are Osram's advantages? Thanks!
Dane: To answer the second part of the question first, the groundbreaking ceremony for the new factory in Wuxi New District has just been completed. Although this is a new groundbreaking ceremony, it cannot be denied that our development process in China can actually be traced back to a long time ago. We began to get involved in the development of China's related industries decades ago, and we have been committed to how to set some standards in our related industries so that everyone is willing and able to respect them. So you said what advantages do we have compared with other competitors? Our competitive advantage lies in that we are the setter of industry and competition standards. At the same time, we also hope to get closer to consumers. We hope to further expand business development areas in China. We have been developing in China for more than 80 years. China has become the largest lighting market in the world, especially the leader in LED lighting market. Therefore, our headquarters made a very wise decision to set up such a packaging factory in Wuxi, China, to achieve our future strategic goals. We can say that this factory is the largest in terms of manufacturing traditional lamps and new lamps, which reflects our This is a commitment that promises to be closer to local Chinese consumers and the corporate development goals of benefiting local consumers. And we also agree that this is a very driving concept and foundation that drives every OSRAM person to further serve and strive for the production of high-quality lamps. Especially from the future, LED will definitely become the future development trend.
Question: As for Osram, we have learned that many cities in China are vying for your project to be settled. Why did you finally choose to settle in Wuxi? Thanks.
Aldo Kamper: In fact, we have already introduced it this morning. It can be said that Wuxi has presented an optimized state in terms of the combination of various advantages. For example, we are very excited about the local business environment, the future development direction of the business, especially the policies provided by Wuxi New Area and all the convenient conditions for us to conduct related business locally. At the same time, Wuxi is close to Shanghai and is close to a city with convenient transportation. At the same time, we can also get very good guarantees in terms of transportation, logistics, logistics, etc. We will never forget the commitment and strong support given to us by the local government of Wuxi. Therefore, Wuxi does have very convincing advantages, beating all competitors and becoming our first choice.
Question: Two questions. The first question is for President Dane. It took Osram a year from negotiation to signing, but only more than two months from signing to construction. What kind of confidence and determination does our group have in signing the contract and starting construction so quickly? Wuxi is also OSRAM's first packaging base in China. What is its long-term development plan for the future? The second question is for Director Ji Kejian of the New District. What changes will be made to the industrial structure layout of Wuxi after the Osram project moves in? Thanks.
Dane: I am very happy to answer the first question you just raised. First of all, China represents speed, and I have no doubt about this. Therefore, I think the speed of our project from negotiation to signing and then to groundbreaking is indeed very fast. And I also think that China's flexibility, adaptability, and strong will to promote projects in this regard are very impressive to us. China is a very large market. There are 16,000 people in China who provide our OSRAM companies at all levels with their excellent services and quality assurance, so we are also very committed to becoming an excellent corporate citizen in China. Secondly, for this factory, we hope to have it completed and put into operation before the end of 2013. We hope that our customers, especially those in China, can benefit from the early completion of such a factory.
Ji Kejian: First of all, I would like to thank all friends in the media industry for their long-term support for Wu
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