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Pu Sheng Yuan Emerges as Leading LED Tube Maker in China

BCX-branded LED lightings well received in international markets

2013/03/08 | By Ken Liu | SHENZHEN PU SHENG YUAN LIGHTING CO., LTD.

Cai Yahui is known for being the founder of mainland China's first LED-lighting tube maker using mechanized production equipment, Shenzhen Pu Sheng Yuan Lighting Co., which now has an annual output of 10 million tubes that are marketed under the “BCX” brand. The firm's current success, however, came only after an arduous trip over a long and bumpy road.

Pu Sheng Yuan’s Chairman, Cai Yahui
Pu Sheng Yuan’s Chairman, Cai Yahui
Since establishing its own brand BCX in 2006, the company has been dedicated to development, production and sales of high-quality, environmentally friendly and healthy LED lightings and related products, and has enjoyed solid brand recognitions in overseas markets, mainly the U.S., Europe, and Japan. The company is also known as one of the foremost makers of LED flexible strip lights granted utility model patents in China.

Like many university graduates with engineering degrees in China, Cai accepted a government assignment to work at a state-owned enterprise in his hometown of Quanzhou in southern Fujian Province. He thus started on a cushy and comfortable career, and was envied by most of his peers.

In 1995, however, Cai left his “iron rice bowl,” as jobs with guaranteed lifetime employment in state enterprises are known in China, for employment in a private optoelectronics company. He stayed there for eight years, during which time the company grew from obscurity to prominence and his monthly pay increased from RMB3,000 (US$476 at RMB6.3:US$1) as a technician to RMB20,000 (US$3,174) as a manger.

After learning about business operations and management as well as optoelectronics technology, Cai felt that it was time for him to start a business on his own. In 2003 he and some friends set up a company using their own capital; because of poor management and disagreements among the partners, however, the venture folded after only one year.

Cai’s company installed mainland China’s first mechanized production line for LED lighting tubes.
Cai’s company installed mainland China’s first mechanized production line for LED lighting tubes.
The failure did not discourage Cai, who soon went into business again with a partner from Jiangsu. This second attempt lasted about as long as the first, again because of disputes with the partner.

Cai was undeterred. One day in 2006 he and his wife found that all the money they had left was RMB15,000 (US$2,380), but they decided to stake it all on opening a business. “At that time,” Cai recalls, “my family was financially struggling; I even had difficulty paying my children's tuition. So my wife pawned all of her jewelry to raise the startup capital for us.”

The result was the Shenzhen BCX Optoelectronics Technology Co., which Cai set up in 2006 with four workers, including himself and his wife, in a simply-equipped 400-squre-meter workshop. Today, Pu Sheng Yuan boasts a 30,000-squre-meter factory campus and approximate 100 workers.

As LEDs were still strangers to mainland China's lighting market at that time, Cai began his marketing activities overseas. With his halting English and his product samples, he attended international lighting events all by himself, including Lightfair International in Las Vegas, Interlight Moscow, and Light+Building in Frankfurt to introduce his company's products.

Cai’s first piece of good luck came to his Shenzhen BCX Optoelectronics.
Cai’s first piece of good luck came to his Shenzhen BCX Optoelectronics.
First Order
Cai never expected that good luck would come so soon, when a German buyer at the Frankfurt fair decided on the spot to order LED light strips from his company. Both Cai and the buyer were fascinated by the products exhibited at Osram's booth; and although light strips were completely new to Cai, with his solid engineering background he was immediately able to figure out the basics of Osram's novel LED products. After a brief talk, the buyer decided to give Cai the contract.

The excited Cai at once phoned his company from Germany and gave instructions to prepare for production to fill his first order. His excitement was soon clouded by doubts, however, and he became deeply concerned that his company would fail if the buyer changed his mind. Filling that first order turned out happily, and the buyer continued to place new orders.

That first deal gave Cai's business its first revenues along with a clear vision of its position in the market: a maker of LED lighting strips. Although more lucrative orders flooded in from overseas, however, Cai realized that lighting strips were not very widely used and began contemplating alternatives.

In 2009, he determined to shift his production to LED light tubes and set up Pu Sheng Yuan and Bodhisattva Energy Conservation Investment Co. in Beijing. The BCX brand name was retained.

Cai soon found his firm losing its competitive edge as a growing number companies rushed to take advantage of government subsidies for energy-saving industries, including LED makers. He realized that it was about the time to move upmarket, and that lamps with intelligent control would replace conventional lamps.

These lamps are among Pu Sheng Yuan’s popular LED lighting products.
These lamps are among Pu Sheng Yuan’s popular LED lighting products.
Moving Upmarket
To make the intelligent lamps with consistent quality, Cai spent RMB5 million (US$793,600) to equip his company with mechanized production lines for LED light tubes, with annual production volume reaching over 10 million units. Compared with manually operated lines, the automated lines cut production costs by an estimated 50% while doubling output.

Many of the mainland's lighting manufacturers have begun turning their attention to the home market in recent years to counter sales slumps in Western markets, and Cai has done likewise.

In March 2012, his company began pushing into the mainland's home market by introducing its own brand name, drumming up orders from lighting-project contractors, deploying a distribution network, and testing the market for government-backed Energy Management Contract (EMC) projects, in which buyers of energy-saving equipment pay equipment suppliers with the money they save from spending on electricity.

Cai's company used all the methods that Chinese lighting manufacturers normally employ in the local market, but he quickly realized that it is hard for a lighting manufacturer there to achieve prominence without promoting its own brand name.

He knew that successful branding would require a long-term effort. “Many manufacturers at home feel that it is difficult to shift to the local market from overseas markets,” he explained, “and many of them have left the market completely after seeing unsatisfactory results from their branding campaigns. We plan to spend five years or so to make our brand name recognizable to consumers.”

“To survive, small and medium-sized enterprises must learn all the time they are coping with problems and innovating.”