Although China’s market for lighting products is 50 times that of Mexico, U.S. companies should consider forming partnerships with Chinese firms rather than wholly owning facilities as is common in Mexico, said John Morgan.

Mr. Morgan, president and chief development officer of Acuity Brands Inc., spoke at Kennesaw State University’s Coles College of Business Tetley Distinguished Leader Lecture Series last week about his company’s international expansion.

Conyers-based Acuity Brands Lighting, a division of Acuity, is proceeding very cautiously in expanding its lighting products distribution into China because of fear of financial collapse there in the next several years, Mr. Morgan said.

“State-owned entities in China might be in big trouble, and some experts are predicting financial crisis there in next two to three years,” he said. “Financial stability is a big concern for us, so we have cautious optimism.”

Also, freight costs are high in China compared to Mexico, and corruption is always a factor, he added.

To mitigate these risks, Acuity is avoiding new greenfield investment and forming in-country exclusive partnerships with already-established supply chains in China to source component parts there rather than whole products, Mr. Morgan said.

“But there is a very friendly environment for North American products in China as long as we’re willing to make those investments ourselves. It’s almost a quid pro quo situation,” he said, noting that the company is considering a $300 million investment in manufacturing emergency lighting products in Taiwan.

“But we’re in the wait and see mode,” he said, noting that China’s membership in the World Trade Organization will be beneficial to Acuity’s operations there.

“Mexico demonstrates a pattern of what to eventually expect for China,” he added, referring to Acuity’s own production facilities in Mexico City and Monterrey.

China’s gross domestic product growth is two to three times that of Mexico, Mr. Morgan noted. But unlike Mexico, property rights are not protected in China, and social issues are a concern, he added.

“We’re cautious about intellectual property rights in China, so we’re not going to lead in that area. Other companies may be more bold,” he said.

Mr. Morgan added that significant opportunities will arise further west from China’s coast once better infrastructure develops. Acuity is testing the possibility of manufacturing “add-on” products that it has not sold previously but that are readily available for manufacture in China, he said.

Acuity’s lighting division sells Lithonia Lighting products and others, lighting 85 percent of the billboards in the United States, among other projects.

Acuity’s specialty products and chemicals division includes Zep Manufacturing Inc. and Selig Industries Inc., among others.

The company employs 11,000 total in Asia, Europe and North America, performing 52 percent of its manufacturing in the U.S., 35 percent in Mexico and 13 percent in other regions.

Visit for more information. Contact Mr. Morgan at (404) 853-1491 or