17.11.2009
By PHILIP HOPKINS
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CUTTER Electronics has caught the crest of a wave that doesn't look like subsiding. Just when the world was looking for lighting that lasts longer, uses less power and generates fewer greenhouse emissions, Cutter was there to supply it.
The product is LED technology - light-emitting diodes - and it has the potential to turn the lighting world upside down because of its energy efficiency.
Selling the LED products has tripled the sales of Cutter, a company based at Vermont, in Melbourne, in two years. Its net worth has more than quadrupled and profits have risen accordingly - results that won Cutter The Age-D&B New Company business award.
The awards, which began in 1993, are given in seven categories - manufacturing, rural, building and allied trades, retail, IT, exports and new company. They promote, acknowledge and reward outstanding business achievement.
Cutter has developed its new business since 2003, but managing director Mark Riley has been in the components business for 25 to 30 years. "Traditionally I was a distributor of integrated circuits - silicon chips, basically. We serviced the original equipment market. Anyone who made a TV, for example, would be a potential customer," he said.
Mr Riley has long had an interest in LED technology. However, lie said, in recent years, technology had marched on, and LED technology now competed with incandescent lighting.
"So as our business has developed over five or six years. We have become more and more become involved in power LED lighting products. Now we export to the world LED light engines," and it was now possible to achieve with 5 watts what was once achieved with 60 watts, he said.
"LEDs have gone from being indicators to true illuminators in terms of their place in the light food chain."
Mr Riley was confident LEDs would make redundant the Federal Government's plan to eliminate light bulbs by 2012 by using cold fluorescent bulbs.
"Efficiency gains in power LEDS will mean that most people will be using LED bulbs well before 2012 comes around," he said.
Cutter's focus has moved from generic component distribution to energy-efficient lighting. "The upside indicates that extremely long life - a life bulb that lasts 50,000 hours or 20 years if it was on all the time - is an attractive scenario for a lot of customers," he said. These include big users of light such as casinos and commercial buildings, whose air-conditioning bills would fall because LEDs also operated with less heat.
"Power LEDs are probably the only technology evolving on an almost monthly basis with efficiency gains. Most other light technologies are stagnant. There is only so much you can do with a carbon-based filament in a glass tube in terms of improving its output and efficiency in terms of power utilisation," he said.
Cutter imports the component - the raw lead - from the US, then adds its own expertise, such as an optic, to bend the light to the angle the customers want.
"Because it's new technology, we spend a lot of time advising customers and teaching them how to use it," Mr Riley said. Cutter now exports about 30 per cent of its products.
LEDs already compared well with fluorescent lights, which were acceptable and quite cheap, he said. "But they don't last, they tend to flick, they become annoying to use, and they are full of mercury and cadmium and other nasties, which LEDs are not.
"LEDS have none of these problems. They are a silicon device, so are made effectively from sand. So there is a revolution coming, and we've grown our business on the back of that level of interest."
Mr Riley noted: "Long life, low power, a lack of nasty minerals - convert the world to LED lighting, and you could shut half the world's power
stations!"
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