In the presence of representatives of Jiangsu Province, Germany's Osram AG has laid the foundation of its new plant in the Chinese city of Wuxi, taking the next step in expanding its activities in the world's largest single lighting market. Scheduled for completion by the end of 2013, the back-end facility will package LED chips. Front-end production of the LED chips will continue in the plants in Regensburg, Germany and Penang, Malaysia of Osram Opto Semiconductors GmbH.
Picture: Groundbreaking ceremony.
"China is already today the biggest sales market with significant future potential. The new assembly plant enables us to better participate in the strong market growth in China and further extend our solid position in Asia," says Osram's CEO Wolfgang Dehen. "Growing at a remarkable rate, Jiangsu Province's LED industry is at the forefront in China," adds Jiangsu Province's governor Xueyong Li. "We will fully support Osram's development in Wuxi with the highest-quality service, and we also hope Osram can expand its investment in Wuxi to have the plant up and running as soon as possible."
Contracts for the new Wuxi location were only signed in May. Groundbreaking now marks the start of construction of the 100,000m2 compound. Osram intends to invest a low three-digit million euro figure over the next five years while also securing comprehensive support from its Chinese partners. In the final completion stage, the new plant will be able to accommodate up to 1600 employees.
Picture: Model of planned plant.
Osram says that, with the new plant, it is responding to increasing demand for LED-based products in the fast-growing Asian market. This comes against the backdrop that LED back-end capacity at Osram's plant in Penang, where chips are both produced and packaged, is expected to reach its limits within the next few years. So, in addition to its two front-end plants, Osram will in future have two back-end sites. "With highly skilled personnel, a good infrastructure and experienced partners, Wuxi provides the best conditions for our new LED assembly," believes Osram Opto's CEO Aldo Kamper.
The Asian region already accounts for about 35% of today's global general lighting market, and is expected to rise to 45% by 2020, according to recent studies. The Chinese lighting market alone, worth over €8bn, is predicted to more than double by 2020. In fiscal 2011, Osram generated about a fifth of its revenue in the Asia-Pacific region, where it employs over 16,000 staff. This workforce is larger than that of any other region worldwide, and roughly half of the firm's Asian staff is employed in China. Osram has marketed products in the region for about 80 years, covering all major stages in the value chain from development and production to sales.
