Philips to build CFL plant in Lesotho

28 March 2008

Dutch electronics company Philips has entered into a partnership with the state-owned CEF Group and privately owned Karebo Systems to set up a manufacturing facility as well as a recycling plant for energy-saving Compact Fluorescent Lamp integrated (CFLi) light bulbs in Lesotho.

In a statement this week, Royal Philips Electronics said that it would hold a 40% stake, with CEF and Karebo Systems each holding a 30% stake in the venture, which is a result of the United Nations Conference on Trade and Development’s mission to seek new business activities that will fuel economic growth in this region.

“With this joint venture Philips will be able to help stimulate economic growth while accelerating the uptake of energy-efficient light bulbs in general,” Philips said.

The market for energy-saving bulbs is growing rapidly globally and is expected to accelerate in the South African region through the efforts of the national government to significantly reduce energy consumption, with an intention to replace 80% of incandescent bulbs with energy-saving bulbs within the next four to six years.

However, Philips expects to reduce this timeframe to approximately three years with the establishment of the Lesotho production facility. As CFLi bulbs save 80% energy compared to incandescent bulbs, the company believes it will help overcome energy shortages now being experienced in the country.

Quadruple win situation
The production facility in Lesotho will be run by local management, produce up to 15-million CFLi bulbs per year and is planned to be officially open for business in September 2008.

The joint venture will initially start with the assembly of CFLi lamps, followed by the production of burners for CFLi lamps and with the establishment of a recycling plant, and potentially, to gradually include the production of components.

“With this joint venture we create a quadruple win situation,” said Philips SA general manager Luc Escoute.

He explained that the new facility would enable the company to meet the growing demand in energy efficient lighting solutions, stimulate economic development and help reduce electricity costs and cut carbon emissions.

“We are happy that this new facility will enable our region to manufacture energy saving bulbs that will help to overcome energy shortages and combat global warming,” said CEF Group chief executive Mputumi Damane. “This [joint venture] will help us securing sufficient supply of CFLi to meet the country’s ambitious targets in electricity reduction, especially in the residential sector.”

Karebo Systems MD Peter Kgame echoed those words, stating that switching to energy efficient lighting was the quickest and easiest way to make a significant contribution to reducing demand, and that Philips’ involvement in the project would bring high-quality energy-saving bulbs to the local market.

Huge potential savings
According to Philips, lighting accounts for around 19% of worldwide electricity consumption, and if all inefficient conventional lighting were switched to energy-efficient technologies, the potential worldwide saving would be about 40%.

“In South Africa only, we estimate that lighting represents 15 to 17% of the overall electricity consumption,” said Escoute.

He said that if the country aimed for a 40% reduction through energy efficient technologies, it could cut electricity consumption by 14 800 gigawatt-hours, reduce carbon dioxide emissions by 13.3-million tons and save the economy up to R5.3-billion