STORY INLINE POST
It seems every sector could benefit from LED lights: street lighting, businesses, households and industries. LEDs dwarf regular light bulbs in areas such as energy efficiency and durability, with a 50,000- hour lifespan. In other words, an LED light that is in use for eight hours per day will last for 17 years. On the downside, they represent a significant investment. Eduardo Silva Montaño, Director General of Verde Alterno, explains that regular 100W light bulbs cost between MX$2 and MX$50, whereas an LED light bulb costs MX$200. “Those interested in this technology should keep the long-term benefits in mind. As well as lasting for far longer, LED lights run on 6W of energy, which is far less than regular light bulbs, and the technology is mature enough to be applied anywhere. However, because the market has been saturated with Chinese products, a lot of people are selling the same LED lights.” Silva Montaño is adamant that the industry needs innovation so as to offer added value and competitive differentiation.
Verde Alterno specializes in making and distributing products that are unavailable from its competition. For example, the MR16 LED works on 110V and can be dimmed, which makes this Taiwan made lighting solution more technologically advanced than most of its mainland China competitors. Silva Montaño and his team traveled to Taiwan looking for suppliers and products with an edge and came across the MR16 LED, which was not being sold in Mexico at that time. Needless to say, Verde Alterno became the Mexican ambassador for this product, which was a good complement to another of the company’s most interesting designs: light towers.
Verde Alterno maintains a close relationship with Ecofest, which hosts an annual sustainability exhibition that requires light towers that run on clean energy. Ecofest asked Silva Montaño’s crew to develop a light tower in line with the exhibition’s green ideals, rightfully thinking that using light towers that consume 50 liters of diesel for every 8 hours running time to host a sustainability event would lack credibility. Verde Alterno complied by creating a solarpowered light tower. The company had three months to build the towers, which meant very little turnaround time, and in addition they had to meet Ecofest’s desire to have each tower illuminating as much as a 1,000W lamp. This proved challenging on two fronts: finding LED lights that were powerful enough to simulate the light you would get from a 1,000W lamp, and finding a way to install solar panels that could produce sufficient energy to power the device. After running several experiments, Verde Alterno settled on the idea of using many LEDs on single lamps. In taking up Ecofest’s challenge, Verde Alterno created a valuable, sustainable product that brings its customers a return on investment within approximately one year. A diesel-powered tower costs from MX$125,000 and MX$150,000 (US$9,250-US$11,100), and while Verde Alterno’s prices are in the same range, they offer the added value of representing a sustainable investment.
Verde Alterno’s sales strategy is also an inventive one. According to Silva Montaño, Verde Alterno goes straight to the companies it wants on its client list. The firm sells its signature light tower to companies that lease light towers, in the construction and event industries. This is complemented with a simple yet intelligent strategy for remaining ahead of the competition: developing clever LED products. This goes beyond selling lights, which anyone can do, it is more about developing products that no one else has. The company acts as a consultant, determines its customers’ needs, and then develops products that respond to those needs. “We have cheap products because we are also involved in a price war,” says Silva Montaño. “There is no doubt that we can compete with Chinese products, but we also have products that are of the highest quality.”
Despite the wide range of businesses the company serves, it remains entirely focused on the private sector, citing the difficulties one can face in working with the government. “They may ask us to install 100 lamps for testing purposes, which represents a big investment. They tell us they do not want to use our products because they have learned how to install the equipment themselves or have found other suppliers,” says Silva Montaño.
For a time the company considered building a LED factory in Mexico, but several factors derailed the idea, not the least of which was the fact that this type of endeavor would require a qualified labor force. “In Mexico, the workforce is not that specialized and the people who are specialized tend to be difficult to afford,” explains Silva Montaño. He also points out that this industry requires a type of silicon that is not distributed in Mexico. “It would be possible to import diodes and assemble the lights, but making the diodes in the country could not be done in a competitive way. Nevertheless, such a project would have the added advantage of helping revenues stay in the country and speeding up delivery times.”