You have reached your limit of free articles this month.

Enjoy unlimited access to myAJC.com

Starting at just 99¢ for 8 weeks.

GREAT REASONS TO SUBSCRIBE TODAY!

  • IN-DEPTH REPORTING
  • INTERACTIVE STORYTELLING
  • NEW TOPICS & COVERAGE
  • ePAPER
X

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and bonus content- exclusively for subscribers. Starting at just 99¢ for 8 weeks

X

Welcome to myAJC.com

This subscriber-only site gives you exclusive access to breaking news, in-depth coverage, exclusive interactives and bonus content.

You can read free articles of your choice a month that are only available on myAJC.com.

High-tech lights give metro firms a jolt


The rising use of LED lights to light the nation’s streets, offices and homes is not only helping cut power bills, but also electrifying growth at some metro Atlanta employers.

In the last few years, Atlanta-based Acuity Brands has become the nation’s largest manufacturer of lighting products ranging from household lamps to street lights that use light-emitting diodes, or LEDs.

The high-tech lights now account for over half of Acuity’s sales, which totaled $2.7 billion last year. Its stock is up five-fold over the past five years, and last month it joined the S&P 500 index of the nation’s 500 largest companies by market value.

Acuity’s workforce has grown by 2,000 employees, to about 9,000, in the past three years through a combination of acquisitions and internal growth. About 1,300 work in metro Atlanta.

Acuity also re-tooled an old factory near Lithonia that re-opened late last year as a sleek research and development center, where about 250 workers come up with future LED products.

Ryan Merkel, an investment analyst with William Blair & Co., expects strong sales of LED products to continue fueling Acuity’s revenue and profit growth.

“LED adoption is gaining momentum,” Merkel said in a recent report, noting that the recent 40 percent jump in Acuity’s LED sales is allowing it to grow at a “materially higher” rate than the overall lighting industry.

Meanwhile, in Peachtree City, Eaton Corp.’s lighting division also has been betting heavily on the growth of LED lighting. About 65 percent of the unit’s sales, which totaled $2 billion last year, now come from LED products, spokeswoman Karin Martin said.

That’s up from the “low single digits” in 2009, she said, when the lighting division opened a new R&D center at its Peachtree City headquarters to develop LED products.

Eaton’s lighting division has about 1,000 employees in Georgia, including 700 employees at its headquarters campus.

Applied technology

Driving the growth is the biggest new thing to hit the lighting industry in generations.

LEDs have been in use since the early 1960s. But it’s only in the last five years or so that manufacturers have come up with designs cheap and reliable enough to beat out traditional light bulbs.

These days, LED lights are rapidly multiplying on store shelves, in office buildings and on city streets, say industry experts, because they can last more than a decade and cut electricity use by 50 percent or more. So-called ‘smart’ versions can save even more energy, or do other things like change color and brightness or communicate via wireless signals.

“As you move to LEDs, you’re going to the digital world,” said Mark Verheyden, senior vice president at Acuity Brands. “That allows that light to do so many more things.”

In one example, involving a big box retailer Acuity declined to identify, smart LED lights were installed in dozens of stores that can communicate with customers’ or employees’ cell phones, allowing them to precisely navigate to the merchandise they’re looking for.

The specially designed LED lights emit signals at slightly different frequencies. An app on the customer’s phone uses the differing signals to determine his or her location in the store and to give directions. Acuity says the system is accurate to within several inches.

Such high-tech lights are a big jump from Acuity’s first foray into LED lights. The company got its start in LEDs when it decided about 20 years ago to start offering exit signs for offices and other customers that were lit by LEDs rather than traditional bulbs.

“Five to seven years ago, LED was so small” that it usually didn’t even come up in the company’s quarterly earnings calls with industry analysts, said Jeff Quinlan, an Acuity vice president and technology evangelist. Now, “it’s everywhere,” he said.

Acuity’s LED operation has grown from less than a $200 million business in 2011 to more than $1.2 billion last year. So far this year, revenue from its LED business has grown by 40 percent, to over half of all sales, far outstripping Acuity’s traditional lighting business.

Acuity is now the leading manufacturer of LED lighting in the U.S., with about 20 percent of the market, said Mike Hornung, a lighting market analyst with IHS Technology, a business information firm.

Competition coming

In the global arena, Hornung said bigger companies like Dutch firm Philips and German firm Osram Licht, which owns the Sylvania brand, have more market share than Acuity. Both sell more LED lights to consumers, the largest market for LED products, while Acuity concentrates more on office, industrial and street light customers.

Meanwhile, competition from both small and large companies in increasing, said Hornung, which is driving down both prices and profit margins on LED lighting, to the point where some companies have lost their glow in investors’ eyes.

IHS projects that the global market for LED lighting will only grow to about $80 billion by 2023, from $72 billion now, partly because of falling prices rather than any slowdown in product sales.

But Hornung expects Acuity to keep ahead of the price squeeze by continuing to roll out more “smart” LED lighting that it either develops internally or buys through acquiring smaller companies.

“They need to stay on top of things,” he said, but “they are one of the faster companies.”

Merkel, the analyst with William Blair, agreed.

“Given ongoing investments in talent and new product development, we expect Acuity to continue to outgrow the market,” Merkel said in a recent report.

Quinlan, during a recent tour showing off Acuity’s R&D center, said he doesn’t expect to see a slowdown in Acuity’s LED business any time soon.

“We have converted 4 percent of the lights in the United States,” he said. “There are literally so many more lights to go.”



Reader Comments ...


Next Up in Business

Woodward Academy: Q&A with visual arts teacher Andy Cunningham

Andy Cunningham finds it strange to say out loud that he’s worked for Woodward Academy for 32 years. When he joined the city’s oldest private college preparatory school in 1985, he had no plan to be a high school teacher. Cunningham, who holds a bachelor’s degree and MFA from Georgia State University, was the first black male on faculty...
Executives believe in collaboration, balance

The leaders of the top small, midsize and large workplaces shared what makes them proud and advice for companies trying to improve their corporate culture. Answers have been edited for brevity and clarity. Q: What are key components of the company’s culture? Pat Flood, regional operating partner, Supreme Lending’s Southeast region: Our...
Woodward Academy: Top Large Workplace

Students and faculty whiz around President Stuart Gulley in the foyer of the light-filled renovated Thalia N. Carlos Science Center, which re-opened in 2016 at Woodward Academy in College Park. During a change in classes, Gulley stops a student dressed in a blue blazer and khakis, Woodward’s school uniform, and brags about his success in a recent...
What AutomationDirect.com employees say

AutomationDirect.com ADC provides a spectacularly positive work environment and provides a frequent and detailed vision for the company! ADC is, hands-down, the best place I have ever worked! I am given complete freedom in deciding how to execute my work and the company provides the best resources to get the job done. The company culture is most inclusive...
AutomationDirect.com: Q&A with Leisa Cudworth in product management

Leisa Cudworth often uses her lunch hour to exercise. It’s easy for her to work up a sweat since AutomationDirect.com has onsite exercise programs and facilities. “You get to do it at lunch or different times (of the day), so when evening comes, you get to go home to your family,” she said. Cudworth, who has worked her way from inside...
More Stories