USA tops lighting products market.

The lighting glass market was estimated at a value of US$26 billion in 1997. A regional review(*) of the glass industry sector puts North America as the largest market for lighting products.

The lighting glass market was estimated at a value of US$26 billion in 1997, of which the general

The emerging markets of' Eastern Europe, Latin America and the rest of the world hold a combined 18% share of the global market, a share lower than that held by Japan (19%).

Emerging markets

Growth rates in the more mature markets have been significantly lower than those experienced in the far smaller emerging markets. All three of the developed regions recorded growth rates below 3% between 1995 and 1998, while Eastern Europe and Latin America growth was double that rate, while the rest of the world, including the Asia-Pacific region, made even more rapid progress (Fig 1).

[Figure 1 ILLUSTRATION OMITTED]

In general the lighting glass sector is dominated by the manufacturers of lighting products themselves. Philips is the global leader and places strong emphasis on value creation through profitable growth in emerging markets such as Central and Eastern Europe and the Asia-Pacific region. It is the market leader in Europe, Asia-Pacific and Latin America, and the second largest producer in the USA.

Osram is the second largest global lighting manufacturer, and in addition to solid bases in the USA and Europe, where it is the second largest producer, the company has recently been consolidating its presence in Asia.

General Electric (GE) is believed to be the third largest lighting manufacturer worldwide, though it is thought to have the leading share of the USA market. (;E has also been raising its interests in Asia.

Mixed performances

The global leaders recorded mixed financial performances in 1998. In spite of the slowdown in the Asian markets and a weaker performance in North America, Osram managed to increase lighting sales by 3.7% in 1998, thanks to a solid European market, and good growth in Latin America. Osram realists approximately 85% of' its total market sales in Europe and North America, a factor that may explain the company's resilience laced with the Asian collapse.

In contrast, the geographical split in the Philips' business is much more evenly spread. In the case of Philips' total sales, 51% went to Europe and the USA, with a 49% split between other countries. Although no definitive information is available about GE's lighting operations, as they are incorporated into the Industrial Systems business units, again an idea of the geographical spread can be obtained from the make-up of total sales in 1998. Of GE's sales, 57% were realised on the domestic USA market. Of international sales, 51% went to Europe, with the Americas and Asia-Pacific combined taking a further 24% share. Again, this is significantly higher than Osram's 15% sales to other regions. Weak sales in Asia were cited by GE as a key cause for falling revenues from the lighting sector in 1998 (Table I).

US$million   1997 sales   1998 sales    % change

Philips         5,025        4,925        (2.0)
Osram           3,554        3,684         3.7
GE(1)           3,015        2,985        (1.0)

Note: (*) Lighting here refers to sales of all types of lighting products. 1 Lighting figures for GE are MTI estimates.

Broad presence

Philips has lighting and glass bulb manufacturing facilities throughout the world and Osram and GE also have a broad geographical presence. Although in recent years the major players have invested in Latin America and Eastern Europe, they have primarily focused on the Asia-Pacific market in 1997 and 1998. Within the lighting sector, Philips has launched a number of joint ventures to cater tot the rapid expansion in the area, with increasing investments in China, India and Indonesia. Osram has manufacturing facilities in India and has set up a a new company in Indonesia, while GE has increased its presence in Asia through a joint venture with Samsung in Korea, as well as doubling its investment in China.

Besides the major players, Bialystok in Poland is an important manufacturer of lighting bulbs and tubes in Eastern Europe. In Western Europe, Scott and Corning have manufacturing facilities for more specialised products such as halogen lamp bulbs. Demaglass in the UK is a major producer and exporter of lighting glass. Another important producer of glass bulbs in Western Europe is EMGO, a joint venture between Philips and Osram, which although based in Belgium, also has manufacturing activities in Latin America.

(*) The World Glass File 1999-2005, written and compiled by MTI. Copyright dmg world media (dmg business media), publisher of Glass, Glass International and the European Glass Directory it Buyers' Guide, Redhill, UK. To order a copy of the World Glass File contact Alasdair Hood, dmg world media. Tel +44 (0)1737 855488. Fax +44 (0)1737 855474. Email: ahood@dmg.co.uk