An insider unveiled that late on October 17, a fight between Ledman’s internal staff and porters who were hired by the company happened at Ledman’s headquarter in Shenzhen. Three employees were injured and 23-year Ms. Liu is still kept in hospital for treatment until now.
The intension moved into early morning of October 18 when dozens of Ledman’s staff protested in front of workshop building, asking for proper explanation from the company and claiming compensation for the three injurers. As of press time, a Ledman’s insider disclosed that the company’s management had reached an agreement with related employees about compensation scheme at the night of Oct 18th.
Although aforementioned trouble has come to an end, the essence of this event is labor dispute caused by the company’s plan to relocate part of production lines in packaging device department to Huizhou Base. Due to employees’ interest and personal mode, the problem still lingered. Ledman offered 0.625 time economic compensation to relocated staff, however, according to industry insiders, the law makes the compensation to be N+1 times.
“Moving to Huizhou, you have to face a new city and the payment there is not guaranteed”, said a veteran employee, who also added that starting early this year, the salary of his department was depressed by the company to a low level. Nearly 200 employees, including dozens of veteran workers who have worked for the company for over 5 years, in the packaging device department are not willing to move.
Ledman’s Huizhou LED Industry Park encompasses an area of 33,233 square meters in phase one construction and a total building area of 52,000 �O. This base has not launched production yet up to now. However, targeted at an earlier relocation, the company hired porters to move at the same night, which caused the incident as described in the opening of this article. In response to the ignorance of the company’s high-level, related staff are seeking for an explanation and compensation for the wounded.
Some employee in packaging department unveiled that this labor dispute involves a compensation of 1 million yuan only, which is not a big sum for Ledman, but the company’s high-level did not take timely measures to pacify staff.
When the reporter called Ledman’s high-level personnel, he felt it inconvenient to disclose any information at the time, and the company’s president Li Tieman is unavailable via phone.
As a matter of fact, the sluggish LED market this year overshadowed the sales of Ledman.
According to GLII report’s statistics, in the first half of this year, domestic white LEDs declined by 20% in price. The rapid price reduction of packaging device means restructuring and cost decrease for medium and large packaging enterprises, while meager profit and struggling to survive for small enterprises.
“Starting last year, the profit of packaging device for display has declined to the bottom,” Anplight’s general manager Xiao Wenyu is deeply bothered by the current stalemate of the industry chain: display makers are unable to cut cost from packaging and packaging enterprises are unable to save cost from raw material, process and management.
Among the earliest public LED enterprises and listed on GEM since 2011, Ledman has not shown outstanding result in recent two years. Despite operation revenue of up to 240 million yuan and a growth of 27.97% year-over-year in 2011, the net profit for shareholders declined by 15.03%, with gross profit margin reaching only 17.39%. In the first half of 2012, Ledman achieved 148 million yuan in operation revenue, growing 21.50% year-over-year, with gross profit margin of only 13.67%, declining 3.7% compared with the same period last year.
“For a company that specializes in LED packaging and display, a gross profit margin of 17.39% is far left behind public peers,” said some security analyst who are keeping a close track of LED public enterprises. Regarding to revenue scale, NationStar, as an example, achieved more than 3 times than Ledman in the first half of 2012.
With the intent of rapid expansion, in 2011, Ledman raised 605 million yuan to set LED Industry Park, 143 million yuan of which is used for expansion projects in terms of HB LED packaging device and high-end LED display and LED lighting product.
Aforementioned Huizhou base is among funding projects and Ledman has extended its LED industry chain from LED display packaging and LED lighting application.
However, Ledman’s expansion has not proceeded well.
“In 2008 and 2009, Ledman’s packaging technology had certain competitiveness in the market and accepted by the market despite of higher price.” Industry insiders say that the recent two years have seen increasing LED packaging enterprises nationwide, along with increasingly prominent scale effect, therefore, price war is inevitable. When it comes to product technology, Ledman has been left behind in white lighting-grade packaging technology compared with several leading packaging enterprises in China.
As of press time, a net friend with net name of langtaoshi posted online regarding Ledman’s relocation. The text goes:
Ledman will move manufacture operation to Huizhou. Employees who are not willing to go will be transferred to Lighting Division which, however, barely receives orders. The number of unwilling-to-go staff reaches as high as around 160. How will the company accommodate them?
Ledman acts this way to avoid the compensation payment of N+1 stated by law. Yesterday, the relocation day, employees who have refused to move staged a sit-in. However, the company hired some outsiders to harm these employees, some of which have been wounded. Irritated staff are calling on preparation for protest against hitters tonight.
