It has been a year full of changes for Sylvania, one of the best-known lighting brands in the world. A new owner. A new headquarters with a state-of-the-art training center. And new challenges in the fast-moving LED lighting market.
The brand, which Osram owned since 1993 and spun off earlier this year as the independently operated Ledvance LLC, was acquired this summer for approximately $442 million by MLS, a Chinese semiconductor manufacturer that’s said to be one of the largest suppliers of LEDs in the world. The deal is expected to close in the company’s 2016/2017 fiscal year.
According to an earlier Electrical Marketing report, the company plans to go to market with a dual-brand strategy with both the Sylvania and Forest Lighting brands. Forest Lighting, Marietta, Ga., has worked hard over the past few years to establish distribution channels in North America. Ledvance now employs about 8,900 people, is active in 120 countries, and generates revenue of approximately $2.2 billion in annual sales.
Jes Munk Hansen, Ledvance’s CEO, told Electrical Marketing in an interview at the company’s new headquarters in Wilmington, Mass., near Boston, that MLS recognizes and respects the value of the Sylvania brand and will be marketing lighting products under that name in North America. Hansen, who became CEO of the Osram Sylvania lighting unit in 2013, has years of experience in supply chain management and working with distributors of energy-efficient products before coming to Osram, most recently as CEO for six years of Grundfos North America, the world’s largest pump manufacturer, with approximately $550 million in sales.
Originally from Denmark, Hansen brings a global perspective to his duties of building the Sylvania brand in North America, with a MBA from London Business School and a master of science in forestry from the University of Copenhagen. He has a unique understanding of the distributor role in the marketplace from his experience of working with Grundfos’ distributors that serve contractors and other installers of residential, commercial and industrial pumps.
Hansen enjoys meeting with distributors to discuss Ledvance’s future plans and about the unique supply chain management challenges related to the rapid launch/rapid obsolescence nature of LED lighting. The MLS acquisition is a common topic in his discussions with distributors. Many of the distribution execs he has spoken to have been through acquisitions themselves or have built their companies through acquisitions, so they don’t view the acquisition in a negative light. Hansen says distributors are most interested in learning more about MLS’ background, and that they recognize the power of being aligned with one of the world’s largest LED chip manufacturers. They are happy the Sylvania brand will be front-and-center in MLS’ North American marketing strategy, he said.
In many ways, the company’s new headquarters building reflects the fresh energy that Hansen and other company employees like to talk about at Sylvania and Ledvance. The building has a distinctly modern feel, with an open office environment and ample natural light flooding the work spaces. While the company’s Lightpoint training facility has a number of different rooms for classes and tours, the whole building is in a sense a demonstration center for the company’s LED lighting systems. While standing on the sweeping staircase in the multi-story lobby, visitors can experience an array of colorful lighting scenes on the ceiling and walls — all controllable by an app in a smartphone. In the offices and labs up the stairs, engineers are developing the next generations of the company’s LED lighting systems, and employees and visitors get to experience the various lighting options the company sells in real-world applications.
Hansen and his management team at Ledvance now enjoy the backing of a world-class LED chip manufacturer in MLS to support a continuing surge of new products. But they realize it’s a delicate balance out in the marketplace for distributors who need to keep up with new lighting technology but want to manage their lighting inventory carefully so they don’t have too much of that technology sitting out in their warehouses and in danger of becoming obsolete by the next generations of products. Hansen says the key to solving these supply-chain issues is developing and maintaining trust with distributors. He says the company will maintain its focus on stock-and-flow products that turn as fast as possible, and let other lighting manufacturers focus on the spec-grade or custom lighting equipment where product obsolescence is a greater danger. Hansen says the company is excited about its recent rollout of eight easy-to-install LED products for electrical contractors, and about the potential of its Lightify connected lighting products, which it promoted heavily at Lightfair this year in San Diego.
“We are very good at stock-and-flow logistics and we focus on ease of doing business,” he said. “Won’t get involved with spec-grade fixtures. The LED transformation is not just a technical revolution, it’s a process revolution. The hardest thing is the speed of new products arriving and some of the old ones being phased out.”