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Philips Lighting, GBU Fluorescent 2011 Price increases due to phosphor increases.

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Presentation on theme: "Philips Lighting, GBU Fluorescent 2011 Price increases due to phosphor increases."— Presentation transcript:

1 Philips Lighting, GBU Fluorescent 2011 Price increases due to phosphor increases

2 Confidential Philips Lighting, GBU Fluorescent, Irene Klein, Gerbrand Swart, What is Rare Earth? How is related to the lighting industry? Resources: DOI, US, Geological Survey, Circular 930-N; USA Congressional Research Service, Sep 2010, Wikipedia There are 17 rare earth elements (REEs). They have names like lanthanum, europium and yttrium. And they're critical to a variety of high-tech products and manufacturing processes, including catalytic converters, petroleum refining, color TV and flat panel displays, permanent magnets, batteries for hybrid and electric vehicles, medical devices, and phosphor powders used in fluorescent lamps.

3 Confidential Philips Lighting, GBU Fluorescent, Irene Klein, Gerbrand Swart, The issue of raising costs: demand of Rare Earth is rapidly increasing while supply is controlled by China According to Goldman Sachs: "We envisage that the market for rare earths will remain in severe deficit in 2011 and 2012, and that prices will trend higher over the next 18 months.

4 Confidential Philips Lighting, GBU Fluorescent, Irene Klein, Gerbrand Swart, 2011 Rare Earth (REO) price determines Phosphor cost Global Rare Earth raw material price is fully transparent -> 4 Yttrium (Y) Europium (Eu) Cerium (Ce) Lanthanum (La) Terbium (Tb) Gadolinium (Gd) Europium (Eu) REO material 78% of costprice REO material100% of cost price REO material 3% of costprice Avg impact REO costprice is 70%!

5 Confidential Philips Lighting, GBU Fluorescent, Irene Klein, Gerbrand Swart, 2011 China dominates world supply market Source: US Geological Survey

6 Confidential Philips Lighting, GBU Fluorescent, Irene Klein, Gerbrand Swart, Rare Earth Price Trend in the past 3 years indicates massive increase since 2011

7 Confidential Philips Lighting, GBU Fluorescent, Irene Klein, Gerbrand Swart, The increase accelerates in 2011 On top of phosphor, cost increase come from labor cost (20% up), components (average 30%) and plastics (average 30%). Source: YttriumTerbium CeriumEuropium

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