- The manufacturing site is located in Europe currently with the basic technology being injection-molding to a very precise standard. Typical batch sizes for Standard components can range from 5-100 million pieces. For Specialties, the range is much lower (up to 5 million pieces but typically much lower) and the design of the component is often created together with the customer as a technical service by LumCO. (If Interviewee asks: The total output of the company in 2014 was roughly 600 million pieces, all from its European facility).
- Technologically, the company is known throughout the end-consumer industries (large lighting OEMs, automotive companies, specialty lighting companies) for its precision molding and is considered to be a reliable partner and innovator.
- Specialties sales account for 60% of the company's revenues, which, in 2014 accumulated to EUR 120 million. Revenues were split: Europe (65%), North America (15%), Asia (20%). In general, the market volume for lighting components in Europe and North America is expected to be roughly equal, while Asia is approx. 1,5 as large.
- The company's product portfolio is evolving towards components for LED lighting, which, as of 2014, were accounting for 85% of the total product portfolio, which encompasses approx. 1,000 items, of which the majority are Standard components (If Interviewee asks: Split of 1,000 items is roughly 75% Standard, 25% Specialty, with molds for the latter typically not being reused).
In North America, the company's products are sold through one major distributor, whereas in Asia, the company currently uses three distributors. Quantities ordered by distributors tend to be higher in Asia than in North America since customers more frequently use products from the Standard Component catalog. (If the interviewee asks it can be mentioned that LumCO has not been satisfied with the North American distributor and that they were required to pay a significant premium to be listed by him.)
LumCO's customers are either large integrated lighting companies or smaller specialists. In total, the company has had over 1,000 customers in 2014, with roughly 200 of those accounting for 90% of its total revenue. As with the overall lighting market, customers can be divided into those that seek standard components and focus on traditional lighting or standard LED applications or those that want specific components for LED and high-end lighting applications. Asian customers tend to require more Standard components, whereas North American customers more often request Specialty products.
Key cost drivers for both Specialties and Standards are labor costs, which are typically 40% higher for Specialties as the requirements for design, mold creation, and production process are usually performed by more skilled and technically trained employees. Provide the following labor costs only if the interviewee asks for them:
- Labor costs for Standards at LumCO's European facility amounted to 30 EUR/hour.
- Labor costs for Standards at the potential Chinese site are estimated to be 15 EUR/hour.
- Labor costs for Standards at the potential U.S. site are expected to be 25 EUR/hour.
The company currently employs 150 employees at its European production facility (If Interviewee asks: No overhead staff included and to be considered; 220 workdays to be assumed with 8 hours worked per day).
The company has been an innovator in components for LED products. The market for LED products, based on some research LumCO has conducted, is expected to grow by 24% p.a. until 2019 in Asia and by 17% in North America, with China and the United States being the key markets in both regions. Key experts on the lighting industry further assume that there will be a significant split in the lighting market with regard to technological features required in component products, which are believed to be either very high (e.g. light density, scope, area of light) or very basic.