Sergio Villalón
Senior Vice President and General Manager
View from the Top

Sharing Best Practices Across Latin American Markets

Wed, 02/24/2016 - 15:25

Q: Philips has 124 years of experience in the lighting industry, what does the recent restructuring imply for the company’s position within the market?

A: Globally speaking, the lighting division has played an important role in the strategy of the company. In those 124 years in the market, Philips has made significant investment in innovation in this sector. The company is preparing two leadership position companies that will carry out independent activities in two sectors. The consumer goods and health products will be consolidated under the HealthTech company, and the lighting and energy efficiency solutions will fall under the remit of a new company.

One of the advantages is that the lighting division has had an enduring presence in Latin American markets, with 75 established years in Mexico, 90 in Brazil, and over 80 in Argentina. In Mexico, Philips has been involved in all the new energy legislation processes and has formed part of important initiatives from the World Bank for the energy efficiency transition. We formed part of the Sustainable Light Project, where we replaced 22.9 million incandescent lamps with CFI lights, and were involved in the second and third generations of the program under a different scheme. This was the most important replacement program in the world of its time. Now, we are participating in public lighting projects by helping municipalities across Mexico replace traditional technology with LED.

Q: What is the flagship project that Philips wishes to bring to Mexican shores and other Latin American markets?

A: The most relevant project is in Buenos Aires, Argentina, where we are replacing 99,000 points of public lighting with the most updated LED technology. This project also incorporates a control system that will enable the municipality to monitor the lighting. So far we have replaced 50,000 points and the system is a success, since it allows the municipality to offer better security, efficiency, and address the needs of the citizens. This software is called City Touch and it will eventually be integrated into Mexico, Brazil, Colombia, and other markets across Latin America. We have created a competence center that will collate success stories, projects, and best practices across all markets in Latin America. This will enable us to transfer technologies and knowledge to other countries. It will be interesting to oversee the transition of Latin American markets toward energy efficiency.

Q: What are the main trends you have identified across these Latin American markets?

A: Technology is changing and LED is becoming cheaper and more accessible. Connectivity has entered the discourse of lighting solutions and is picking up speed. An example would be our HUE concept, where LED lights are connected to an application and control system. Through devices, the end user can control the light, turn it off, change its colors, dim it, and make it interact with other applications. Replacing light bulbs is not enough, thus we must create added value in our products by including connectivity and next generation technology. The HUE started out with only an app and now it is an interconnected lighting solution. In the premium segment, the City Touch software is the ideal solution for municipalities looking to incorporate efficiency in their public lighting. Within the commercial segment we offer the Dynalite lighting control system, which integrates a series of products. There is a lot of room for innovation in the lighting industry and the company reinvests 8% of its revenues in R&D. Our projects are always people-oriented, and important monuments are lit by our solutions, such as the London Eye, Eiffel Tower, and the Empire State building.

Q: What possibilities do you see of working with municipalities and offering integrated lighting solutions?

A: We have worked closely with FIDE and CONUEE in order to include energy efficiency in public discourse and the legal framework. The authorities support Philips when it decides to bring new technologies from other markets, like Europe, to Mexico. Our work with municipalities in Mexico includes installing over 40,000 lighting points across several districts of Guadalajara. In the future, the city might also consider using our software in order to efficiently manage its public lighting. Helping municipalities entails demonstrating the benefits of a solutions provider rather than a company that only offers LED technology.