Market opportunities for lighting industry in western europe


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A presentation held on Finpro Market Opportunity Day on 22.10.2013

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Market opportunities for lighting industry in western europe

  1. 1. Business from Innovative Use of Light: Market Opportunities for Lighting Industry in Western Europe Time to grasp the business opportunity Risto Huhta-Koivisto Senior Consultant Pekka Tolonen VP, West Europe & Africa
  2. 2. Examples of successful Finnish businesses 10/25/2013 2 © Finpro
  3. 3. Drivers of the Market Opportunity • Rising electricity prices in Western Europe is a continuous trend: Need to cut costs in energy consumption. • Energy efficiency directives by EU create demand for new type of energy efficient solutions and expertise in lighting. • Green city-type projects in most EU countries. Did you know: 8 billion light bulbs will be changed to LEDs by the year 2020. • State and municipal incentives to improve the energy efficiency. 25/10/2013 © Finpro 3
  4. 4. New Customers: Western Europe is a Booming Lighting Market • Development way ahead compared to Finland. • Demand for new lighting technology and solutions in innovative LED lighting e.g. in architectural sights, hospitality business and lighting regulating human, animal and plant biorhythms. – Greenhouse business using increasingly LED lights. 25/10/2013 © Finpro 4
  5. 5. Opportunities in Greenhouse Business Greenhouse sector growth continues. Ongoing trend of energy efficiency, sustainability and productivity opens up markets. • Greenhouses offer a market not only for LED lighting but also for other solutions in irrigation systems, cooling, ventilation and fertilization. • Dutch sector, leader in Europe, is a forerunner: Growers are concerned about continuous improvement and government is subsidizing business to promote competitiveness and sustainability. – Old greenhouses are replaced and updated: new technologies, business process improvement e.g. supply chain integration and marketing is needed.
  6. 6. The Dutch Greenhouse Market • Horticultural market represents 4% of the Dutch economy, providing 24% of world supply. In added value Dutch sector outperforms global average by 50%. • Greenhouses cover 0,5% ( around 10 500 ha) of arable land and produce 22% of agricultural output. • Greenhouse growers, most SME’s, can control the factors affecting yields and quality. Growing essentially 12 months/year. • Dutch are excellence driven by technology and infrastructure. – Grower’s associations – Logistical Hubs – Automated and systemic technologies • High concentration of specialized Dutch companies throughout the supply chain. – The supply sector is capturing increasing share of value vs. the primary production sector (the growers). By 2020, supply sector estimated to surpass.
  7. 7. Why first to Europe? 25/10/2013 © Finpro 7
  8. 8. Why first to Europe? • Forecast: by 2020 LED lighting market will amount up to 60 % of the global lighting market. • Europe, a market likely to lead going forward in LED penetration. Source: 25/10/2013 © Finpro 8
  9. 9. The Largest Lighting Sectors General lighting Backlighting • A complex market with multiple applications • 75 % of the total lighting market 25/10/2013 Automotive lighting • Sector continues to grow, driven mainly by conversion of automotive headlamps to LED technology • Market will decline due to a decreasing number of LEDs required for example per TV © Finpro 9
  10. 10. General Lighting Applications Residential lighting • Around 40 % of the total general lighting market. Architectural lighting • LED covering 85 % of the market. Hospitality, shop and outdoor • LED applications are expected to see fast growth in market share up to 70 % or more by 2020. Office and industrial applications • Slower market development due to the high penetration of cost-competitive linear fluorescent lamps. 25/10/2013 © Finpro 10
  11. 11. Forecast of LED Adoption by Sectors 10/25/2013 Greentech Media © Finpro 11
  12. 12. Snapshots from Germany Düsseldorf Hannover Kissing • 60.000 street lights, of which 43.000 electric, 17.000 gas powered • 60.000 lights •Among first municipalities in Germany planning an entire switch to LED technology in street lighting • expected CO² reduction by year 2015: 8.000 t • change into LED lights started already in 2007 • As there were no proper LED street light on the market at that time, city Düsseldorf developed together with university a own product 10/25/2013 • Aim to gain experience of luminance, light distribution, quality, and maintenance • Pilot project to learn more about service need and durability • first LED lights 2009 • Better control over the light distribution and avoiding light pollution also considered as key factors • Wanted manufacturer with good image and references • First feedback : adequate lighting with a 46 % reduction in light energy © Finpro 12
  13. 13. Snapshots from Italy Bergamo Autostrade per l’Italia Autovie Venetie • Deep Frame LED luminaires for foyer lighting in architectural lighting renovation • LED systems already been tested and installed at a number of junctions and toll plazas in order to optimize lighting and improve visibility • Refurbishment on next 4 years (2013) include installation of the latest generation of LED lamps. Upgrading of the lighting of interchanges of Redipuglia has just been completed. Magenta Torraca Tunnels • 3 km of bicycle road as turnkey project • 700 LED light points installed. Commitment to convert 100% of outdoor lighting to LED in mid-2007. Resulted in 75% energy savings. • Installed 6,378 lights in 2009 in motorways tunnels. Further 10,766 LED lights installed in 2010. Annual energy saving in tunnels estimated as 3,992 MWh. 10/25/2013 © Finpro 13
  14. 14. Snapshots from the UK Birmingham Tesco grocery stores Bromley •City Council’s £70 million rollout of Philips/Indal LEDs across Birmingham is the biggest LED deployment in Europe, expected to bring energy savings of 50%. • Opened the first store 2012 to run solely on LED lighting. All external signage installed using LED fittings, as well as the sales floor and in staff areas. • An £8.5 million investment programme of state of the art LED street lights across Bromley over next years. 27,000 street lamps will be replaced . Transport for London Salford Sheffield • Deep Frame LED luminaires for foyer lighting in architectural lighting renovation • 2011 pilot retrofit of 2000 LED street lights across 300 streets in Salford. Council now approved the roll out of a further 24,000 street lights across the city . • All 68,000 of Sheffield’s street lights will be replaced by LED lights. 10/25/2013 © Finpro 14
  15. 15. … and more snapshots from Europe Paris, France Eindhoven, Netherlands Barcelona, Spain • Switch to LED replace the 250,000 light points in RATP’s 302 metro stations and 66 RER stations will reduce the energy needed to light up the Paris metro and suburban RER stations by more than 50%, while improving the light quality at the same time. • Replaces all orange street lighting with LED lighting in 2013 for soft white light and perfect colour rendering, improves social control in the area. The system is ‘floating’ i.e. lights are integrated in cables instead of poles. • City Council is introducing LED technology in the replacement of 13 000 traffic lights in the city, with an estimated annual saving of 800,000€. Barcelona decided in 2010, after a pilot project with LED street lighting in six pilot areas, that the technology still has to evolve, but seems to be available in a short term in competitive conditions. 10/25/2013 © Finpro 15
  16. 16. Our Promise Finpro helps Finnish companies to grow and succeed in international markets We work with you to: • Plan your internationalization process • Help you with funding by providing access to the right contacts • Put your plans into practice and gain a successful foothold in target markets 25/10/2013 © Finpro 16
  17. 17. Finpro’s Global Network 25/10/2013 © Finpro 17
  18. 18. Right tools to Optimize Your Company’s Growth Preparing Growth Planning Market Entry Establishing Presence Improving Market Position International Growth Plan Entry Options Partner Search Sales Accelerator Test Drive Sales Channel Development Direct Sales Market Monitor Establishing Company Acquisition Candidate Search Supplier Evaluation Trend Pulse Export Partner Groups Industrial Services Right Markets 10/25/2013 © Finpro 18
  19. 19. Finpro References in Energy and Environment Industry 10/25/2013 © Finpro 19
  20. 20. The cooperation with Finpro succeeded very well and we received relevant market information. We were able to acquire the first hand information straight from customer interface, which was very valuable for us. Our experience from Finpro was all in all very positive. Local experience and presence in target markets were remarkable benefits. Finpro and GreenStream Network developed a cooperation model and GreenStream Network could test five markets with moderate investments and had a quick access to new emerging EUA markets. With the contribution from Finproners we could get a good understanding of the markets. It was a very cost-efficient way to test the markets. Harri Roto, Executive Vice President, GreenStream Network Plc
  21. 21. GreenStream Network is a leading Nordic developer and manager of green investment vehicles. The company is established in 2001 and has its headquarters in Helsinki. GreenStream Network`s home market is Northern Europe. China and South-Africa are company`s key areas for growth. GreenStream Network had positive experiences from Baltic Countries and in 2008 company wanted to extend their operations to Eastern Europe. Establishing own offices and finding own agents was considered to be too expensive and slow way to proceed. It was also estimated that traditional market research couldn`t reveal relevant issues from customer interface.
  22. 22. Finpro and GreenStream Network developed a cooperation model, where Finpro sales consultants acted as GreenStream Network`s representatives in five countries: Bulgaria, Czech Republic, Hungary, Romania and Slovakia. They contacted potential customers and arranged meetings. After half a year presence GreenStream Network discovered the East-European markets less attractive than estimated and decided to concentrate in faster growing markets like China. GreenStream Network could test five markets with moderate investments and had a quick access to new emerging EUA markets. Other benefits for GreenStream Network were systematic and professional market information, client identification and preparing of deals. At the moment GreenStream Network continues the cooperation with Finpro to find new markets in South-East Asia.
  23. 23. We're truly impressed by the way in which Finpro operates. They were exceptionally successful in identifying agents for us in the German market, and the Go Global program was an efficient way of benefiting from Finpro's extensive geographical network and local knowledge. Our cooperation has given us credibility in global markets and is certain to continue. Sofi Filtration is a Finnish company founded in 2011 offering state-of-the-art waterfiltration technology. Cooperation with Finpro has resulted in the company finding two good agents in the German market. Ville Hakala, Sales Director and Chairman of the Board, Sofi Filtration Oy
  24. 24. Founded in 2011, Sofi Filtration is a Finnish company offering state-ofthe-art water filtration technology. The company's main product is Sofi Filter, a high-capacity polishing filtration solution for industrial processes. Based on an innovation by Pertti Rantala, one of the founders of Sofi Filtration, Sofi Filter has been commercialized with the help of funding from Tekes - the Finnish Funding Agency for Technology and Innovation - and the private sector. Even though Sofi Filtration is a so-called 'born global' company, it is small and only recently-established, and does not have the resources needed to embark on the internationalization process alone. Finpro helped Sofi Filtration with client segmentation, its value proposition and the definition of channel models, and with professional agents to open up international channels.
  25. 25. Sofi Filtration participated in the Uusimaa Go Global program, during which both potential markets and client sectors for the company's products were defined, as well as all of its sales material and webpages were renewed. Primary markets were identified in countries where the mining sector is strong: Australia, Canada, Chile and South Africa. Together with Finpro, a strategy for achieving an international technological breakthrough was also drawn up, and Germany was chosen as the target because the resulting credibility would support efforts in other markets. The German car manufacturing industry has expressed interest in Sofi Filter technology. Through cooperation with Finpro, Sofi Filtration has found two good agents in the German market. Pilot versions of equipment for testing are currently being prepared. Discussions with a representative of the Canadian mining industry are also ongoing and an agent agreement for Belgium has been signed. The company believes it saved at least six months by initiating its survey of international markets with Finpro's help during the final phase of the commercialization process.
  26. 26. Rahoitusvaihtoehtoja Finpron ohjelmia, joissa rahoitusmahdollisuuksia: Finpro Kasvumarkkinaohjelma Aasia, Kiina ja Intia, Afrikka ja Lähi-Itä sekä Pohjois-,Keski- ja EteläAmerikka (TEM/Finpro) arvo n. 20 k€ johon n. 50% tuki Go Global Plus (ELY/Finpro) arvo n.17.5 k€, johon n. 75 % tuki Julkisia rahoitusmalleja: Valmistelurahoitus max. 15 k€/ 70 % tuki Projektin max. arvo 21400 € Tekes T&K avustus n. 20–500 k€ (50 % tuki) ja T&K laina (50-70% kustannuksista) Yrityksen kehittämisavustus n. 15–100 k€ / 50 % tuki Yhteishankintakoulutus n. 30-130 k€ /70 % tuki Tekes De minimis avustus max. 100 k€ / 35-50% tuki Tekes nuoret innovatiiviset yritykset 50 k€ + 250 k€ + 750 k€ / 75 % tuki Finnpartnership tuki 3v max. 200 k€ / 30–70 % tuki 25/10/2013 Finnvera lainat, takaukset, vientitakuut ja pääomasijoitukset © Finpro 26
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