Can we compete?

[AndyD]

I’ve been making LED lights for mining application for the last 8 years. A local company sent my lights to China as samples and is now selling a Chinese version of my lamps at half the price.

You started out well but you didn't evolve and it sounds like you're paying the price.

You started by purchasing LEDs from China and you added value to them by making an LED lamp for the mining industry. At this time this was a niche market and you could sell good numbers of them at a handsome profit. On the back of this success you could have developed a range of products over time for other local niche markets but it sounds like all your eggs were in the one basket and your market is no longer a niche one.

I wouldn't make the mistake of competing with existing products that are already available from the far East, I would focus my efforts on developing a new product for a market that isn't being well catered for.

[Blurock]

The chinese are here and they are here to stay. It costed them some money "SMALL CHANGE" to get full open trade agreements with individual people in power ( Not agreed with the citizens.)

Agreed. For instance, water meters have to have SABS certification. China has dumped thousands of water meters in South Africa. These water meters, which are not SABS certified, was given to local municipalities for free. They are of a poor quality and need to be repaired before they can even be installed locally. I wonder what was given to China in return?

[dfsa]

I wonder what was given to China in return?

More free resources. More stolen scrap copper. Tax free haven ( I know off a good few chinese businesses that are not registered) More access to raw material at a fraction of local cost.

You fill my back pocket buddy and I will open the gates.

[adrianh]

China isn't all bad and other countries are not all good either. Most of our products are manufactured in China whether we like it or not.

To get back to the original debate: Should our government protect an industry that clearly cannot be competitive in the national and international market? LED's are made in China, assembled into complete lights and then shipped here at a price, lets say P. The same Chinese LED's are shipped here, assembled into lights here and then sold at 3xP. We say that the high price is due to the cost of labour, but at the end of the day, the man in the street has to foot the bill, and as we all know, none of us want to pay a premium for the exact same product.

[gombault]

Hi All,
It’s easy for those that only imports products to speak, as they manufacture nothing. The EU placed restrictions on imports from non-union countries to protect their manufacturing industries we must do the same. I gave you my situation with led lights but this problem is not just limited to my industry it affects all manufacturing in this country.
Regarding the designing for manual assembly.
Those locally with automated pick and place machines are already feeling the crunch from China as the components and PC boards are all from there already why not place it there as well.
To Adrianh,
The Chinese are doing manual assembly with the cell phone chargers and it’s not a disaster. If you design the product right you can even have a better product than those done on pick and place machines.

This quality thing is also a problem, the marketing guys would tell you otherwise but I know it mostly come down to price.

Let me give you an example: I believe my truck lights are the best.
Plus point on my truck lights.
My light has 36 led’s for stop and tail light, most Chinese lamps now only have 8 they are driving those led’s to the max to get the required light output. I am driving my leds far below its maximum rating to increase reliability. My light is also the only lamp that you can open to replace a failed led or broken lens, all other led lamps are sealed units. When you buy a new car what is your life expectancy of its rear lights? Everyone will say the life of the car. Then why don’t the truck owners expect the same life out of their trailers lights? This is the selling point I am trying to make to give the customer a lamp with the same life expectancy of the light on his car but in reality it doesn’t work like that the only thing the customer want to know is WHATS YOUR PRICE.

You can’t get patent rights on led lights because it’s not unique. I do however have a patent pending on a new light system for trailers. It’s a new two wire light system I want to concentrate mainly on fuel tankers with this system. I already spent a fortune on making all the components to comply with the specifications required for SANS 1518

More on this system and all the other lights I make at www.celgo.co.za .
AndyD I don’t think there is a market that hasn’t been well catered for and if there is just send the samples to China to change that.

[adrianh]

@gombault - The LED industry is absolutely terrible. I was involved in swimmingpool lights for a while but it got to a point where the big boys just drove the prices so low that nobody could compete. Even pic n place is a problem because, as you pointed out, the unions bugger that up to through demanding high salaries.

I looked at your site...you make nice stuff. I am going to mail you off-list with an idea.

[gombault]

The old government in the 70s and 80s placed heavy taxes on imported cars; it also forced local car manufacturers to have a % of local content they even forced them to increase this %.
If we are not going to place restrictions on imported products from countries that pay their people peanuts, then we don’t have the right to complain about the crime rate.
Its better to pay 30% more for a product and give someone locally the feeling that he could make it locally, than to just import everything and create nothing than more unemployment.