LED goes down the altar how to deal with excess capacity

"The one who compares is more liked by the government."

The Guangdong Science and Technology Department holds a real gold and silver in the hands to specifically support the development of the LED industry. During the "12th Five-Year Plan" period, the Guangdong Provincial Government invested 450 million yuan each year to set up a special fund for LED industry development.

In addition, Guangdong plans to promote the use of LED products in the province. According to the "Guangdong Province's Implementation Plan for the Promotion of the Use of LED Lighting Products" issued in May 2012, Guangdong will take the lead in the field of lighting engineering in public lighting areas such as roads, public places, government agencies, state-owned enterprises and other financial or state-owned capital investment projects. , Fully promote the application of LED lighting products. According to the plan, Guangdong's LED industry will reach 500 billion yuan at the end of the "Twelfth Five-year Plan" period.

These policies will undoubtedly play a positive role in the development of the LED industry. In order to compete for this special fund and obtain the government's LED project, companies have resorted to a few "places where the sun cannot reach".

The aforementioned sales person in charge of a LED company in Zhongshan stated outspokenly that he can get government subsidies or projects, both hard and soft power. Hard power refers to whether the company’s own technology is excellent, and soft power tests the company’s personal connections and government resources. .

"This kind of subsidy says afterwards that there are two things: power and money. Companies that can have both of these things can gain favor from the government. Of course, there will be some assessment standards, but when all companies are satisfied, Who is more liked by the government?” He revealed that the first step in applying for a subsidy is to first connect with the person in charge.

In fact, some corporate projects are doing very poorly. However, if they have good relations with the government and bragging about them, they can get tens of millions of government subsidies. In fact, the technology of this enterprise has already been eliminated by the market, and there is no way at all. Promote the industry.

An LED industry veteran told this reporter that Guangdong has more than 6,000 LED companies, probably only 2% to 3% can get subsidies, including many listed companies, state-owned enterprises.

Among the LED companies in Zhongshan, 30% of the projects are from the government. The person in charge told this newspaper that government projects generally have a more substantial scale and profit, so the competition is fierce. Every bid, more than ten or twenty companies that meet the qualifications will come. In fact, the ultimate winner has already been determined in most cases.

As for how to get the project, "Eight Immortals has shown a supernatural power through the sea," the person in charge said in a slightly mysterious way. According to different objects, the operation methods are also different. However, he admits that he definitely has to pay some benefits to the important joint figures, but he does not want to disclose the specific amount.

As for how to maintain relations with the government, the person in charge said that eating and drinking are shallow dealings and the relationship does not need to be maintained, "as long as there is a common interest." After winning the project, the winning bidder will first calculate the amount of money that has been spent on the dark, and then calculate the profit, and finally use the remaining project.

LED goes down the altar

Based on the consideration of energy conservation and emission reduction, the Chinese government will use LED as one of its strong support industries.

The Chinese government has set a clear goal that by 2015 LED will account for 30% of the domestic lighting market share, which is more than three times the current level. According to official estimates, this will save 35 million tons of coal per year.

According to industry sources, LED lamps with the same wattage are 8 times more efficient than ordinary sodium lamps, 3 times more common than ordinary energy-saving lamps, and 4 times more expensive than sodium lamps and 2 or 3 times more energy-efficient lamps.

Other data shows that if half of China's lights use LED lights, the annual savings will be equivalent to 2.5 times the annual power generation of the world's largest hydropower station, the Three Gorges Dam.

However, there are different opinions on whether LEDs are really energy-efficient.

Xin Pu, chief economist of Guangdong Broadcasting Group, stated that under the same lighting intensity, LED street lights are actually not more energy-efficient than high-pressure sodium lamps. In addition, the specifications of the LED lamps of various manufacturers are very different, and it is very troublesome to maintain and replace them. Because it is not as fully standardized as the high-pressure sodium lamp, it is easy to buy a replacement product after the original bulb is broken.

Many people in the industry believe that LED is indeed energy-saving, but it is not necessarily environmentally friendly. Because the overall production process of LED lamps may be quite energy-intensive. If the energy consumed during the production and recycling process is calculated together, it will be higher than the average light bulb.

At the Guangdong Provincial People’s Congress Group Discussion Meeting on July 31st, a representative of the Guangdong Provincial People’s Congress clearly opposed the “serious implementation of the LED lighting product promotion program in public lighting” in the report of the National Development and Reform Commission. He said that if the government wants to support , support research and development, and do not support the promotion of products.

"To promote the market, let the market choose, the market will be the most choice." The NPC representative said that the government's strong promotion of money, it is easy to make mistakes.

The aforementioned LED industry veterans also stated that government subsidies may not necessarily be a good thing for the industry itself. Sometimes it will affect the market to play its normal detoxification function.

The above-mentioned sales person in charge of Zhongshan LED company said that at present the LED industry is still in its infancy, and the price system, product specifications, technical standards, industry standards, and government policies are still not mature at all levels.

The industry has apparently become increasingly rational from the previous influx of bees. With the gradual growth of the market, some companies have entered this field, and some have withdrawn. The reporter learned that the general manager of a well-known LED company in Foshan recently resigned as a university teacher.

"Fiscal opium" and excess capacity

In fact, the unsustainability of the LED industry is mainly reflected in the use of financial subsidies as "spiritual opium" and the overcapacity caused by companies getting together.

First of all, in the slogan of industrial upgrading in various local governments, a large amount of financial subsidies with “good intentions” have been invested in the so-called new energy and new technology industries. According to public reports, both the LED industry’s San’an Optoelectronics and BDO Runda’s net profit growth rate exceeded 100% in 2011. Among them, government subsidies contributed to 90% of Sanan’s net profit. BDO Runda is 79%.

BDO Runda’s operating profit in 2011 was 146 million yuan, while total profit was 452 million yuan. Among them, about 300 million yuan profit comes from government subsidies and income tax deductions obtained by its subsidiaries. The financial subsidies Sanan Optronics obtained in 2011 involved a total of 1.8 billion yuan.

According to the "5044 audit results of energy-saving utilization, renewable energy, and comprehensive resource utilization projects" released by the National Audit Office on June 21st, the central government allocated a total of 1848 provinces in 2011 and 2012 for energy conservation. , Renewable energy and comprehensive utilization of resources and energy-saving environmental protection class on the three subjects of the funds of 81.883 billion yuan. Among them, the promotion of efficient lighting products was 1.876 billion yuan.

At the same time, after the "winter" in the photovoltaic industry, the LED industry was once considered the "next photovoltaic industry" with the obsolescence of a Shenzhen-related plan for LED development. "In the first three years, the profits of the industry can reach 20% to 30%, but now it is only 5-10%." The head of a LED product export company in Zhongshan, Guangdong, told this reporter.

The responsible person attributed the reason for the decline in profits to the vicious competition caused by excess LED capacity. He said that in the past few years, the entry barrier to the industry was too low, and that as long as the company had one year of R&D experience, one company could be opened.

He added that the threshold for LED entry is so low that he himself is now confused about what LED is. "I only know that I'm just making lights, just like other lights." He said that, like photovoltaics, all industries from other industries, including making socks and producing bicycles, have entered the industry. "The money comes too fast," just as they are in a medium-sized company in Zhongshan, where the annual turnover is also 10 billion yuan.

The person in charge said that since the process of applying for government support funds is complicated, the company has not applied for it. "The conditions for application, first of all depends on production capacity, our production capacity is not big enough." He said, "But despite the large capacity, if there is no strong government relations is very difficult to do, you have to know, especially for us like this For private companies."

Some industry sources told this reporter that if the government blindly supports and subsidizes LED, this industry will lead the way in photovoltaics. "Photovoltaics is just some people using the concept of new energy to defraud the government of subsidies." The internal staff of a photovoltaic company in China told this reporter.

There are even industry insiders predicting that in 2013 China may have one-fifth of LED lighting companies closed down. Many people in the industry told this reporter that as with photovoltaics, the government’s overly generous financial support for LEDs often results in a large excess of production capacity. In the case of severe excess production capacity, there is bound to be vicious competition between industries. This ultimately hindered technological innovation.

"China's LED core technology is mainly in foreign countries." The chief person in charge of the above-mentioned Zhongshan LED company said, "For us, the key is not the technological innovation, but how to make the production capacity bigger, the bigger the better."