Piecing it together
The CFL market in India
The CFL market in India is complex. It comprises at least 12 big brands and perhaps hundreds of small players, whose contribution is not measured. elcoma, the primary association of lamp and components manufacturers, estimates the cfl market size in the country is between 150 million and 200 million pieces. Of this 40 to 50 per cent is dominated by the unorganized market, it estimates. "The organized sector provides us production and sales data periodically, but as far as the unorganized market is concerned we can only guess," said Sunil Sikka, vice-president of elcoma and president of Havells India, a major cfl producer.
In terms of quality, the market can be divided into four groups. The best quality cfls, with over 8,000 hours of life and a power factor of 0.8 or more, have a market share of 20 per cent. The second group, comprising 40 per cent of the market, has a lamp life of 6,000 to 8,000 hours and a power factor of 0.5 or more. The third are low quality cfls that run for 3,000 to 6,000 hours and have a market share of 10 per cent. Then there are cfls with no guaranteed life.
The Bureau of Indian Standards prepared standards for cfls in 2002. In November 2008, it increased the power factor of cfl from 0.5 to 0.85 and fixed 6,000 hours as the minimum life for all cfls. The standards have come into effect from January 1, 2009. But in a meeting of the bureau's technical evaluation committee on January 9, elcoma insisted that the industry was not prepared for the change. The bureau gave the industry time till June 2009 to increase power factor. Fourteen manufacturers have acquired licences to make cfls with 0.85 power factor. The bureau has also decided to examine whether high power factor will affect the performance of these 14 brands' products.
Three types of players exist in Indian market manufacturer-cum-importers, importer-cum-assemblers and importer-cum-traders. The first category comprises big brands that belong to well-known manufacturers of lighting products. This group imports both the ready-to-use cfls and raw material such as cut glass tubes and triband phosphor and electrical components such as the ballast (see Deconstructing lamp). Most of these companies have their own production chains where about 90 per cent of the manufacturing process is carried out. The second category is a mix of well-known names and small-scale operators who import parts of cfl, but have facilities to assemble them. Both the first and the second category are isi marked. The third category is fly-by-night operators who import parts as well as the finished product, but of the poorest quality. cfls produced by this group have no isi mark and are sold without any warranty.
According to Bibison Baby of Market Pulse, the cfl market in India is very difficult to track. Philips, with the biggest, 25 per cent, share in the cfl market, is not the biggest producer of cfl in India. It is Phoenix Lamps, with a market share of about three per cent, he said. "Phoenix has the capacity to manufacture 65 million cfls a year, which is less than Crompton and Greaves's over 100 million.
|CFL production at Havells' factory in Faridabad, Haryana
But in terms of market share, Crompton and Greaves has captured only about five per cent," he added.
Baby said there is so much contract manufacturing happening in the industry that it is difficult to track which company is procuring from whom. For example, only 20-25 per cent of lamps made by Phoenix are sold under its brand name Halonix; the rest are supplied to both big and small manufacturers in the country, said another market source. India is a net importer of cfl
s. In 2007, close to 65 million cfl
s were imported, apart from burners. Of this close to 75 per cent were imported by Osram and Philips. India exported about 20 million cfl
s that year.
27 MILLION TO 200 MILLION
s have been in India for a little less than a decade. Earlier, they were imported in India by multinational companies, including Philips and Osram, from factories in Europe and the US. The price was prohibitively high at Rs 250 to Rs 350 per bulb. About eight years ago, companies started importing cfl
s from China that cost about one-fifth the European or American cfl
. "The Chinese brought down the market price to Rs 40-50 per piece. This was the first time people started replacing incandescent bulbs with cfl
s," said Sikka.
The Chinese cfl
s were average in terms of power consumption and luminescence but failed to deliver on lamp life. In 2001, India's consumption was 27 million pieces, almost 90 per cent of which were imported from China. Even bigger companies like Philips and Osram shifted their production bases from Europe to China, and were importing these products in India. Between 2001 and 2002 cfl
consumption in India went up by almost 26 per cent to 34 million pieces.
The production of cfl
s in India also started around that time. On complaints by some Indian manufacturers against cheap Chinese imports, India imposed anti-dumping measures on cfl
s imported from China and Hong Kong in December 2002. Anybody supplying cfl
s at a price below the fixed minimum rate--US $1.845 for lamps that work on a gls
connection without modifications--had to pay the deficit.
This slowed down the market growth. Registering a growth of just six per cent over the previous year, 2003 ended with an approximate sale of 36 million cfl
s. "Anti-dumping restrictions did temporarily slow down the cfl
sale, but vendors found ways of circumventing these measures," said D C Agrawal, the general secretary of the Federation of All India Small Scale Lamps and Components Manufacturers Association (faislcoma)
Produced, imported, assembled
BURNER is the white fluorescent tube that is connected to the plastic base. It consists of a phosphor coating, argon gas, a small quantity of mercury and two metal conductors. The superior quality burner contains triband-phosphor which provides better illumination. Inferior ones use halo-phosphor.
Trade Well known brands import as well as manufacture burners of only the superior quality in India. The unorganized sector imports these burners through dealers who sell it to local assemblers. A small-scale industry source said about 50,000 CFL assemblers are present in India. These units operate from homes where a spare room is allocated for the assembly line. A locally assembled 15-watt halo-phosphor-based CFL can be procured for Rs 20, the illumination would be similar to a 7-watt CFL with a triband phosphor coating.
ELECTRONIC BALLAST is inside a plastic base with a bayonet fitting or an Edison screw. It limits the amount of current in an electric circuit. It comprises a circuit board with rectifiers, filter capacitor and two switching transistors, which convert AC into DC.
Trade Manufactured in India. The dealer who sells burners also sells ballasts to the assembler. In most cases of CFL failure, it is the ballast that malfunctions. The unorganized CFL sector uses poor quality ballasts which last only a few months. It accounts for 40 per cent of the CFL.
PLASTIC BASE This holds the ballast and the electronic circuitry of the CFL. It is produced locally and also imported from China.
BAYONET FITTING This is what goes into the lamp holder. Most are made in India.
The vendors, according to both Sikka and Agrawal, began importing sealed glass tubes--the white part of cfl
known as the burner--and began assembling the lamps in India. "This defeated the purpose of stopping cheap, inferior cfl
s," said Sikka.
Since 2005, the growth of the cfl
market has accelerated. While the lighting industry has cantered at 12 per cent growth per year, cfl
sales have risen at an average of 50 per cent a year. Indian market consumed about 67 million pieces of cfl
in 2005, about 97 million pieces in 2006 and over 165 million pieces in 2007. The anti-dumping notification ended in 2007. In 2008, the market size is estimated to have crossed 200 million pieces.
The price of cfl
s may go up.
On November 21, 2008, the Directorate General of Anti-Dumping notified the new anti-dumping duty for cfl
and its parts imported from China, Vietnam and Sri Lanka. The burner, which was not part of the 2002 notification, will now invite duty. At present, a 15-watt locally assembled cfl
can be procured for Rs 20. With the new duty structure, an importer will have to spend at least Rs 17.83 on importing a burner with a wattage of 10 or below, while for burners of 11 to 20 wattage the minimum price has been fixed at Rs 19.56. Minimum prices for cfls
with and without ballasts range from Rs 21.86 to Rs 88.52. Anti-dumping duties have also been notified for Philips and Osram.
The new duty will affect the unorganized sector, but dealers say apart from a small increase in price, the notification will be ineffective. "Malaysia exports a small number of cfl
s to India. We will import most of the burners and ready-to-use cfl
s from there," said an importer. Chinese burners cost Rs 4-5 per piece, while a Malaysian burner costs Rs 8. "The new duty may raise the price of locally assembled cfl
s by Rs 5," he said, adding that Chinese cfl
s and burners can be imported from other countries where anti-dumping rules do not apply.
The preliminary findings of the anti-dumping investigations by the Directorate General of Anti-Dumping that came out on March 12, 2008, also mention Malaysia as one of the countries from where importers were bringing cfl
s. The findings noted that less than 3 per cent of the volume of the imported cfl
s was from Malaysia. "As imports from Malaysia were negligible by the reason of volume, the Authority did not consider it appropriate to initiate investigations against imports from Malaysia," the document noted.