Article in the newspaper Kommersant about the construction of a plant in Leningradskaya Region “Krasny Bor will shine Korean way”
In 2019 AMIRA Group of Company and KMW will open a joint venture for production of LED flood lights with the annual production turnover worth 1 bln rubles. According to experts’ opinion the JV can get control over a significant share on a young Russian market of LED systems worth several billion dollars, however it will have to compete with leading foreign manufactures which control, based on various assessments, from 60 to 90% of this market.
According to the terms of the agreement signed between the Korean KMW and St. Petersburg group Amira the latter will assemble LED lighting fixtures and flood lights for public areas (street lighting, ports and airports, sports grounds, industrial facilities) of partners’ components on the territory of Amira-Svetotekhnika LLC in Petersburg (22 Kalinina Street). Here the Group has its own production facilities of 500 sq m and manufactures about 50 thou gas-discharge lighting fixtures per year. Complete production capacity of the manufacturing facility is 100 thou lighting fixtures per year, says Andrei Saramud, Chairman of Amira Group of Companies Board of Directors. “At the first stage assembling of components will be performed. We will receive LED matrices and power supply block from South Korea; housings and connecting hardware will be of domestic origin. There is no need to retrofit production areas for this purpose”, he explains. In future, adds Mr. Saramud, it is planned to completely localize manufacturing. In the conversation with Kommersant reporter Duk En Kim, President of KMW, confirmed company’s intentions regarding the first stage of the projects. He added that future plans were under discussion.
According to the information obtained from Andrei Saramud the second stage of the project includes the establishment of a new plant on the territory of Krasny Bor industrial area, where the Group acquired 5.7 ha of land near its plant manufacturing street lighting poles. This plant was inaugurated on July 30, 2015 (see Kommersant issue dated 05.06.2015). Here it is planned to establish a joint venture 50% of which will belong to KMW. This company will completely construct the plant (production area is up to 5 thou sq m), supply plant equipment based on its process design and will perform the final inspection of products. Start of work on the construction site is planned for the first quarter of 2016, implementation will take about 2 years. “The plant will be build based on a modular scheme. It will allow stage-by-stage commissioning and variation of products nomenclature in accordance with existing demand,” he explains. “Investment will amount to up to €10 mln, estimated payback period is five years.” Monetary value of the manufactures products should reach 1 bln rubles during the first years.
Amira Holding designs, manufactures and installs lighting devices of various applications. Planned turnover of the Group in 2015 is 1.5 bln rubles. Company KMW (Korea Micro Ware) manufactures telecommunication systems and components, as well as LED systems. In 2013 Group turnover was about $350 mln.
The company plans to control about one third of the Russian market of public areas lighting: ports and airports, street lighting, highways. It is planned to assign first supplies to sports facilities being constructed for the World Football Championship of 2018.
“According to my estimations every year about 1 mln LED lamps of various types are sold in Russia, therefore the market can be estimated at $5-20 mln,” says Margarita Gorsheneva, Director for Development of QB Finance. “Approximately 60% of products are manufactured in the RF, the rest is imported.” She observes that the number of imported lamps is unmercifully marked down, therefore it is impossible to give real numbers related to this segment.
Vadim Isakov, Territorial Director of BKS Premier estimates Russian market volume at $100 mln, adding that the rate of its growth lag behind the world one approximately twice. Among the major Russian manufacturers the expert names Petersburg- and Moscow-based players: Optogan, Svetlana-Optoelektronika, Focus. “However, western companies – Nichia (Japan), Cree (USA) and Osram (Germany), dominate this market, they control 90% of the market,” adds Mr. Isakov. Taking into account a high price of LEDs and overall economic recession this sector faces problems with attracting financing, however in this case import substitution and a possibility to occupy a share of the market due to lower prices are in favor of manufacturers.
Specialists of the Company themselves name Dutch Philips, German Osram, Austrian Thorn and Italian SBP among the major competitors. “Price of foreign-made lighting fixtures is €2-3 thou per unit, a flood light of the Russian origin will be priced at about €1.5 thou with much better lighting characteristics and lower power consumption,” says Andrei Saramud.
It will be necessary to compete, among others, with Russian companies – members of the Non-Profit Partnership of LED and LED-based Systems Producers (NP PSS), which includes more than twenty companies, reminds Dmitry Baranov, expert of MC Finam Management. However, taking into account that foreign manufacturers try to entrench themselves here before the beginning of “LED revolution” in this country, domestic companies do not have a lot of time for obtaining a significant share of the market. At that with time LED lamps can substitute practically all the lighting devices which are used now, adds Mr. Baranov, therefore their market potential is enormous. “Thus, this project may be very successful on the market, and its approximate payback period may amount to three-five years,” makes his conclusion the expert.
More information: www.kommersant.ru/doc/2759058