The US lighting industry has an immediate opportunity to manufacture electronic ballasts in Chile. The commercial building industry is booming and lighting designers and building developers are increasingly specifying energy-efficient technologies like electronic ballasts. These conditions, coupled with high commercial electricity costs, will also create longer term market opportunities for efficient luminaires and controls.
The total lighting market in Chile is estimated at US$25
million annually. Two of the world's largest multinational
lighting companies, Philips and General Electric, have a
significant presence in the Chilean market. Philips in particular
has aggressively pursued the Chilean market for energy-efficient
lighting and has set a goal for itself that by the late 1990s, 75
percent of its total sales will be energy-efficient products.
These companies have increased the installation of
energy-efficient technologies in apartment and office buildings.
Other large multinational companies like Osram and Sylvania have
been less aggressive in securing a position in the Chilean
lighting market.
The lamp market does not hold promise for new US industry players. However, it is important to understand the structure of the lamp market and the impact that large lamp manufacturers have had on the Chilean market.
FIGURE 6: ESTIMATED
IMPORTS AND EXPORTS OF FLUORESCENT LAMPS
Five million fluorescent lamps are sold every year in Chile.
Ninety percent of these are domestically produced. Two million
fluorescent lamps are exported from Chile every year. The value
of domestic and export sales totals US$8 million.
Fifty percent of the lamps sold locally are for lamp retrofits
and the other fifty percent are installed in new fixtures.
Specialty lamps are imported while high-demand items are produced
locally. With a combined market share of 95 percent, Philips and
General Electric dominate the Chilean market for fluorescent
lamps. The rest of the market is split among other large
multinational companies (such as Osram and Sylvania), local
importers (such as Rolec) and imports from Asia.
Seventy percent of lamps sold for commercial uses are 40W,
T12, 4 foot long tubes. Thirty percent are 20W, T12, two foot
long tubes. In 1981, Philips introduced energy-saving 36W and 18W
T10 fluorescent lamps for local production. Philips reports that
70 percent of its sales of 4 foot lamps are 40W lamps and 30
percent are energy-saving 36W lamps. Philips also exports its
locally-produced 36 and 40 watt lamps to the United States, Peru,
Argentina, Bolivia and Uruguay.
Chile sold 200,000 compact fluorescent lamps (CFLs) in 1994,
worth over US$2 million. Sales of CFLs have doubled in the past
two years due to rigorous marketing. This trend is expected to
continue. The majority of these lamps have magnetic ballasts.
Philips, General Electric, Osram, Sylvania and various Asian
manufacturers sell CFLs in Chile.
FIGURE
7: ESTIMATED UNIT SALES OF CFLS
Philips and General Electric also lead the market in public
lighting. They sell lamps, ballasts and fixtures for
high-intensity discharge lamps. Chile's National Energy
Commission estimates that the country has approximately 716,000
public lights, of which 513,000 use mercury vapor or incandescent
lamps. Seventy percent of Chile's public lights could be replaced
with metal halide or high-or low-pressure sodium lamps.39
Since 1991, prices of high-intensity discharge lamps have fallen
by 30 percent due to municipal relamping projects in Chile.40
Both the Chilean and regional markets for energy-efficient
street lighting hold promise for manufacturers. If Chile's
municipal relamping projects continue and expand to neighboring
countries, the market for efficient public lighting will also
grow. A proposed project in the Argentinean province of Buenos
Aires identified 700,000 fixtures that could be retrofit in 130
municipalities. The project could cut energy consumption in half
and increase demand for energy-efficient outdoor lighting.
Currently, the project is stalled due to lack of financing.41
Two million ballasts are sold each year in Chile, a market
worth US$5 million. The price of a 40W magnetic lamp ballast is
just under US$3.00. Over 8 million ballasts are sold each year in
the Southern Cone region (Chile, Argentina, Brazil, Uruguay,
Paraguay), a market worth an estimated US$24 million.
Most ballasts sold in Chile are magnetic ballasts for 40W and
20W fluorescent lamps. These models lose as much as 10W due to
inefficiency. General Electric and Philips both import ballasts
and purchase them from local companies.
There are two local players in the ballast industry. B y P
Limited is the largest local manufacturer of ballasts with 65
percent of the Chilean market. The company has a semi-automatic
assembly line that produces 4,000 magnetic ballasts per day. B y
P also exports to the Southern Cone region. The other major
player in the market, Rolec, manufactures fixtures and imports
lamps and ballasts. It specializes in high-quality lighting
technologies. Rolec imports Lutron ballasts from Europe and has
begun to sell a small number of electronic ballasts in Chile.
FIGURE 8: ESTIMATED
BALLAST IMPORTS AND EXPORTS
Electronic Ballasts in Chile
There is an immediate opportunity in Chile to manufacture
electronic ballasts for Chilean and Southern Cone markets.
Commercial building construction is growing and the lighting
industry is prepared to market electronic ballasts based on their
electricity savings. Rolec is already beginning to advertise on
this basis. Also, many lighting designers have begun to specify
electronic ballasts but have been unable to obtain imported
technology at a competitive cost. On one recent project, the
building owner agreed to the purchase of electronic ballasts but
they could not be imported in time to meet the builder's
timeline.
Rolec, B y P, and Philips are likely to be the key competitors
in sales of electronic ballasts. B y P Limited is interested in
introducing the local assembly and, eventually, the full
production of electronic ballasts to Chile. The company wants to
maintain its market advantage by being the first company to
introduce the technology. It also wants to export electronic
ballasts to the Southern Cone region. Philips is also targeting
the Chilean market for expanded electronic ballast imports.
The industry's major concerns about the introduction of
electronic ballasts in Chile are technical. It must be able to
introduce a reliable product that has low total harmonic
distortion and high power factor. The dependability of the
product is the industry's foremost concern.
Approximately two million fluorescent lamp fixtures are sold
every year in Chile.42 The recent building
construction boom has boosted annual sales of luminaires. The
same manufacturers competing in the sale of lamps and ballasts
also sell luminaires. Companies like General Electric, Philips,
Rolec and B y P both import fixtures and manufacture them
locally.
Increasing awareness of the importance of light quality and
energy efficiency among manufacturers and lighting designers is
increasing the market for high-quality luminaires. Considering
the expertise and market access that Chilean lighting companies
have, the best opportunity for US luminaire manufacturers is to
target the high-quality fixture market by linking with a Chilean
company.
Luminaires for public lighting retrofits are also produced
locally. Due to the success of the municipal relamping program,
the potential market for high-intensity discharge luminaires is
significant.
Beyond simple switch technology, advanced lighting controls are imported into Chile by representatives of US and European companies. Occupancy sensors have been available in the Chilean market for 20 years but they are marketed for security purposes, not for energy efficiency. Honeywell and Lutron currently sell lighting controls in the Chilean market. Johnson Controls is scheduled to enter the market in 1996. Larger companies, like Honeywell and Johnson Controls, are more focused on entire energy management systems and are not as concerned with lighting systems.
The largest market for lighting controls is the new commercial
building sector. Building owners, however, are not familiar with
the life-cycle cost savings from lighting controls and thus
consider the technology to be too expensive. There is currently
no retrofit market for lighting controls. Nevertheless, because
commercial electricity rates are high, there is an opportunity to
demonstrate their cost-effectiveness.
In May of 1994, Chilectra, Chile's largest lighting distribution company, teamed up with Philips to test compact fluorescent lamps in the Santiago region. They replaced 80 percent of the lamps in 10 houses with CFLs and reduced average household electricity consumption by 30 percent. This initial test was followed by a technical study to evaluate the impact of a large number of CFLs on the power system. Most utilities in Chile face daily consumption peaks in the late afternoon due to residential lighting loads. There are no current plans to implement rebate or incentive programs for CFLs, but Chilectra's testing indicates that there may be reason for distribution utilities to reduce evening peaks with CFLs.
FIGURE 9: POTENTIAL FOR
ENERGY-EFFICIENT PUBLIC LIGHTING
IN CHILE
The success of the Antofagasta streetlighting retrofit project
has led to the implementation of efficient public lighting
projects in at least 150 other municipalities, including
Santiago.
There are various distribution channels for lighting
technology in Chile. Manufacturers and importers sell directly to
electrical distributors, large stores, and to the building and
construction industries. Large hardware stores oriented to
families and Chile's growing middle class are also a distribution
site for lamps, ballasts and fixtures.
The tendency to market technology based on life-cycle cost has begun to reach distributors in Chile. Distributors describe CFLs as "the economic light bulb" because of savings accrued on the electric bill. Distributors use simple payback calculations to demonstrate that the higher price will soon be repaid through electricity savings.
39 Uso Eficiente de la Energía:
Alumbrado Público y Auditorias Energéticas, Comisión Nacional
de Energía, Chile, 1993, p.1.
40 Personal communication, Daniel Blazquez, National
Energy Commission, January 1995.
41 Personal communication, Guillermo Spini, Director,
Philips Lighting Argentina, April, 1994.
42 Personal communication, Douglas Leonard, Rolec,
December 1994.
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