The secret behind the boss of Zhongshan LED enterprise runs off the road

The secret behind the boss of Zhongshan LED enterprise runs off the road The government of Guzhen Town, Zhongshan City, Guangdong Province reported that some time ago, the owner of a local Hundred million-dollar LED lighting factory (hereinafter referred to as “Hung Hsiung”) suspected to have escaped hiding. He was suspected of contract fraud and refused to pay labor compensation. The local public security department has stepped in.

According to a reporter’s recent interview, the company’s owner, Epilogue LED, was also exposed as a “running road”.

Among the many LED companies in China, Guangdong occupies half. A number of Guangdong LED companies insiders told reporters that in the past two years, a large number of LED companies have gone out of business in Guangdong.

The financial director of a company with annual sales of up to 1 billion yuan in Zhongshan told this newspaper that compared to other LED companies in Zhongshan, their business conditions are generally good. However, compared to last year, profits have fallen by 30% this year. Although he felt "some crisis," he firmly believes that the company can persist in the spring of the industry.

"Hung Kee" type into the line

The above-mentioned chief financial officer told this newspaper that Xiong Jixiong's boss Xie Yingxiong had fought for more than 20 years in the lighting industry. Around 2005, he suddenly entered the LED industry where he considered “money” to be endless.

Before "Running", Xie Yingxiong never avoided being blind to the fact that he did not understand LED, but confidently believed that "this thing will definitely make money."

The contact with a number of LED companies and Xie Yingxiong, they all know nothing about LED, but dare to take risks.

At a LED industry forum in Dongguan last month, an LED business owner proudly told his audience about his entrepreneurial journey: he turned from an industry that has nothing to do with LEDs. Hard work, but with the assistance of the policy, companies have grown bigger and bigger.

A number of interviewees told this newspaper that in order to be able to attract investment as soon as possible, the local government did not hesitate to compensate the company for the establishment of factories and provide corresponding preferential policies. But this directly led to companies that make shoes and socks are all running LED. It is widely known that Wu Zhongxian, the leader of Taiwan’s presidency, invested in an LED company in Guangdong several years ago.

Facts have proved that after entering the LED industry, Hung Kee's business scale has indeed achieved rapid growth. Xiong Ji recorded a production value of 150 million yuan last year, and Xie Yingxiong invested less than 10,000 yuan at that time.

In Guangdong alone, the LED output value in 2012 was as high as 150 billion yuan, accounting for more than 70% of the country's 205.9 billion yuan in the same period. At present, there are more than 6,000 LED companies in Guangdong.

Zhongshan, Guangdong is famous for lighting. Zhongshan City Science and Technology Bureau statistics show that in 2012 there were more than 1,200 LED companies in Zhongshan, of which nearly 100 were above-scale enterprises and employed more than 70,000 people. In 2012, the output value reached 35.65 billion yuan, an increase of more than half year-on-year.

However, Zhongshan only has scale. "Guangdong LED industry technology is not mature, the product is not mature, blindly launched." Deputy Secretary-General of the Chinese Society of Lighting Qu Shukui said in an interview with this newspaper.

Yu Shukui said that among the enterprises he has contacted, some companies have blindly entered the LED industry on the basis of having relationships with the government and other parties in order to obtain generous government subsidies for the industry.

When faced with difficulties, Hung Kee tried to open up the market by lowering the price of the product. According to the above-mentioned financial director, Xiongji sold some products that had originally been sold at 6 yuan, and sold less than 4 yuan before the bankruptcy. "This is not profitable at all," said the person in charge of the company. "Together has no reason to die."

LED China's sleepy

With many industry experts, the LED dilemma is attributed to the different overcapacity, Yu Shukui believes that at present LED is not widely used in China, can not say that excess capacity.

In his view, LED companies blindly launched, misaligned sales path, is currently the predicament of China's LED industry. Some companies lack sufficient understanding of LED products and think that "as long as they are bright, they can make light and they can make lights."

The general manager of a Dongguan company that has business dealings with Wu Zongxian has said to the newspaper that Wu does not understand LED. "I sometimes feel annoyed when I answer his phone. He always said that his product had problems again and asked us to provide advice."

Yu Shukui believes that if companies can find out the sales channels of LED products, companies will not fail. "LED products are very good lighting products and will certainly be a good development direction in the future."

Yu Shukui said that the chip prices of LED products are still high, and the cost performance of products made by companies is not as high as that of traditional fluorescent lamps, and the light source is not comparable to fluorescent lamps.

Many in the industry believe that the reason why LED is in trouble in China is because China has no corresponding industry standards to refer to. However, Yu Shukui said that China has already had this standard, "but the manufacturers do not understand, that the light on the line, do not understand the standard."

Faced with the collapse of the enterprise, Zhongshan City Semiconductor Lighting Industry Association Secretary-General Tu Qiaoling said earlier that Zhongshan is now a large number of low-end LED companies and serious competition, the future will certainly eliminate a group of production of low-end LED products and price war companies. Tu Qiaoling said that the end of Zhongshan will introduce LED industry planning, this will guide LED companies to the high-end direction and enhance the level of industrial development.

However, in contrast, Shenzhen, which has an absolute advantage in Guangdong's LED scale, abolished the 2009 Notice on Printing and Distributing the Shenzhen LED Industry Development Plan (2009-2015) in March this year.

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