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Osram’s CEO, Siemens clash over new LED scheme

18/02/2016

By BizLED Bureau

http://bizled.co.in/osrams-ceo-siemens-clash-over-new-led-scheme/

 

Osram’s Chief Executive Officer has taken the decision to expand general LED lighting market by investing in a new LED (light-emitting diode) semiconductor plant in Malaysia. The move is not going well with company’s biggest shareholder Siemens over the controversial strategy of expansion.

Osram’s CEO, Siemens clash over new LED scheme

Investors in Osram have expressed concern over the announcement of US$ 1.1 billion, which will be levied for smooth operation of the Malaysia-based plant. The current shares of Osram have taken a plunge of 30 percent.


Analysts see this move as a risky affair as this will expose Osram unnecessarily to commoditised market, where Chinese manufacturers are already giving tough competition in street lighting and general lighting for homes.

However, the CEO stood his ground for company’s move and clarified to shareholders at the company’s annual general meeting that close consultations on strategy with the supervisory board was taken. The meeting was held in Munich as the move was taken in accordance with rapid technological change.

The top executive at Osram was convinced that major shareholders may or may not give a positive feedback for the new strategically designed move but Siemens, who own 18 percent of Osram, is highly critical of the move. A representative at Siemens stated that the shift in strategy will increase the risk profile of Osram and hence Siemens wouldn’t approve the strategy, formally.


This might go against the professional image of Osram’s CEO but other funds and shareholder groups said they were prepared to approve CEO’s decision despite the steep share price fall which is down by 30 percent.

Osram is the only global company focused solely on lighting. Investors feel that the company might concentrate on its profitable niches in the automotive and specialty lighting markets after selling the traditional lamps unit.

The current trend predict challenging days ahead for Osram as longer-life and more economical LED bulbs are gaining popularity.

Netherland-based Philips has also put up for sale its lighting arm as it attempts to focus on its core businesses of medical scanners and healthcare technology.