I recently had the opportunity to visit a lot of our international manufacturing partners in Shenzhen,
China. Shenzhen is a fascinating town, one of the 14 cities with more than 5 million people. I was born in 1978, and at that time, Shenzhen had around 30,000 people. Today, the city has over 12 million and continues to grow at a staggering pace.
It borders Hong Kong, and was designated a Special Economic Zone in 1980. Its location next to the metropolis of Hong Kong, along with its unique status by the Chinese government, has driven it to incredible growth. In fact, everyone I met had grown up in another area, and no one had parents or grandparents that were born in Shenzhen that I met.
I expected to see large smoke stacks and huge building cranking out large amounts of products in a single day. I expected a lot of poverty, as well as poor conditions for employees. I have dealt with Chinese companies for about three years, and had a lot of assumptions of what I would find based on what I have read and seen in the media. What I actually found was quite different from what I was expecting.
Almost all of the buildings were large 10-15 story buildings that were at least 10,000-20,000 square feet on a floor. Each of these buildings had a very minimalist feel to it, with crammed freight elevators and most folks taking the stairs. There were thousands upon thousands of these non-descript buildings, giving me a perspective of the enormous amount of product capacity of the city. Most of our manufacturers took up a single floor of one of these buildings.
There was less poverty that I expected. I lived in Nicaragua a bit in the early 2000s, and have traveled over much of South and Central America, as well as parts of Asia. I saw much less poverty than I expected, and far less visible poverty than I even see at times in Chicago. Everyone seemed to be busy, employed, and industrious.
In fact, one of my favorite parts of the trip was walking around the city at night, which had in incredible energy and bustle about it. Residents were shopping, eating out, walking, and it felt incredible safe throughout the evening.
For the most part, the working conditions seemed to be comfortable for employees that I engaged with. I didn’t see anyone under the age of 18, and all of the factories had a manager that followed us around during our tour. It felt more like concern of quality and image than big brother, although I don’t know how they felt as employees
Instead of manufacturing, most of the factories were really just assembling parts. LED fixtures contain 3 basic parts: LED Driver, LED Chips, and a housing. I did see manufacturing of drivers, and a few housing die cast of UFO style LEDs at one manufacturer, but most of facilities were more assembly than manufacturer.
There was a large variety in quality, size, scale, and engineering capabilities of these firms. A few of the most impressive are featured below. There was one new potential firm, as well as one of our existing partners, where I found the quality to be...lacking. We won’t buy from them in the future, although there was not anything aggreidous that was visible.
Here are my top companies, and you will continue to see their products in our warehouse and installations for the next few years.
Green Inova has been one of our longest running vendors, and they are on their 5th generation of retrofit kits that replace HID lamps, including metal halide, mercury vapor, and sodium vapor lamps. The retrofit kits are challenging to install without an electrician, but are highly versatile and have an incredible lumen per watt. They also feature a best in class MeanWell driver, and a 5 year warranty on their products.
They were great guests, with a group of employees and a welcome sign when I walked in the door. They gave a formal presentation about their company, their products, and we did a walk through of their facility. Green Inova does about $12 million in revenue, which seems impressive for a Chinese firm.
They also have an extensive product line that features controls for exterior lighting, both photocells, occupancy, as well as remote control driven sensors that have a variety of features. Most of the other vendors did not show as much engineering around sensors, which indicates a great promise for Green Inova’s future projects. I also had the opportunity to spend a lot of time with their engineers, expressing concern on applications of advanced lighting controls, as well understanding how their products work and best usage in Chicago.
One interesting note was that the manufacturing facility was clean, professional, and what especially interested me was that the sales staff seemed to know and engage with the entire manufacturing team. They seemed to be working as an entire unit, and even had an annual ping pong competition. Sadly, I ran out of time before being able to represent the US against their best player (that might not have been accidental).
Top Band was a huge company, publicly traded in Shenzhen’s stock exchange and with an annual $400 million of revenue projected for 2017. However, only about 10% of their revenue is from lighting, which is still significant in size compared to the other manufacturers that I saw.
Top Band has the most unique interior product line, including fixture troffer retrofit kits. They also have the best looking interior high bay fixtures, which is similar to the UFO fixtures in design. They also seem to spend a lot of time and energy on the aesthetics of their fixtures, and they manufacture their own drivers as well.
We have used Top Band products for almost 18 months at Verde. While they have not been great at shipment deliveries, I was very impressed by their facility and team and intend to increase our purchasing from them in 2018.
The seem to invest a lot in the aesthetics and designs of products, as well as R&D. They also have invested a lot into sensors and advanced controls, which is evident. Unfortunately, they do not have a great integrated sensor for their 2x4 Retrofit kit, which is our favorite of their products, but it is in development.
Kingdom lighting was the most impressive of the new vendors. I was drawn there to see their LED fixtures with solar PV panels on the top. However, I was quite impressed by both their product line and their manufacturing facility.
The solar PV LED lights are very interesting, and especially have some great benefits that are not quite obvious. Many of our restaurant customers have issues with underground wiring below their parking lots, often leading to costs as high as $10,000 to dig trenches and repair wiring. However, solar PV LED lights have a battery that captures energy during the day and can power up to 80 Watt LED lights for up to 12 hours at night. The only downside to these fixtures is that as of now, batteries need to be replaced every 3 years or so, depending on usage.
The rest of their product line was impressive - with a huge variety of UFO style high bays, as well as new high bay innovations that were both cost effective and pushing the limits of lumens per watt (as high as 160). They also offered both a premium and lower end version driver in all fixtures.
Kingdom employees also all seemed engaged and interactive with each other, a key indicator for quality in my opinion.
Chinese vs US Manufacturing
While Chinese manufacturing has gotten a bad wrap in terms of quality, we have not seen issues first hand with this. Since we offer our customers a 3 year labor and material warranty, as well as a 3 year monthly payment plan as an option, quality is very important to us. We will continue to visit and keep a close relationship with our vendors, both within the US and overseas, to make sure the quality is high.
As with any professional firm, it is important to have a variety of suppliers and partners, to make sure you can consistently meet the demands of your customers. If you’d like to see any of these products in our Chicago warehouse, please reach out to us anytime!