Dutch lighting giant Philips will be shutting down its only fluorescent bulb factory in Thailand by next quarter and lay off in total 200 workers at the plant, reported The Nation.
The report cited declining global demand for fluorescent lights, and LEDs gradual replacement of LED lamps was the main reasons behind the shutdown of the factory located at the Bangpoo Industrial Estate in Samut Prakan.
The plant makes more than 1,000 types of fluorescent lamps.
The Nation report went on pointing out China might become the main lighting production hub for Asia and the world.
According to LEDinside analysts survey of the market, Thai manufacturers import most of its LED products especially components from China to assemble into LED luminaires. Tariff free agreements signed between China and ASEAN member states has also bolstered the proliferation Chinese LED products in the region.
In line with its global strategy, Philips had split its lighting business from medical and electrical goods since February 2016. The lighting business will be under Philips Electronics (Thailand), while medical and electrical appliance will be part of a new company named Philips (Thailand).
"Under the reshuffle, our head office is expecting significant growth in the lighting business and the creation of a new segment of smart and connected lighting," said Chalermpong Darongsuwan, managing director of Philips Electronics (Thailand).
In Thailand, the company separated its lighting business from medical and electric goods in February. The move will give its lighting operations more flexibility in managing its business and setting its growth plan.
The lighting business will be under Philips Electronics (Thailand), while medical and electrical appliances will be under a new company named Philips (Thailand).
The transformation aligns with the company's strategy for creating a stronger foundation for future growth and innovation to address customer needs better and faster.
In Thailand, fluorescent lamps market share in the general lighting market is estimated to drop to 28% in 2016, compared to 30% in 2015.
Demand for electric lamps is projected to grow 3% to 4% to reach THB 6.1 billion (US $175 million).
LED market share in Thailand has reached about 34%, and represent about 62% in the THB 15.3 billion worth luminaire market.
"We believe that LEDs will share more than 50 % of the local electric-lamp segment in one or two years," said Darongsuwan.
The company will launch 1,000 LED products in Thailand this year, and continue to focus on positioning itself as a leading lighting solutions provider in project-based channels including government infrastructure projects and private sector housing and shopping malls.
Based on LEDinside’s observations LED bulb prices and government policies in the country might also be spurring the shift, since last November LED bulb prices were nearing traditional light sources, such as CFL prices due to incentives launched by state enterprise The Electricity Generating Authority of Thailand (EGAT) .