Having already risen from 10 percent in 2009, to 15 percent in 2010, market share for your photovoltaic panels is expected to touch 25 percent in the current year for the wider Asia Pacific, Middle East and Africa (APMEA) regions. Where do you see this figure heading in 2013 and 2014?
Our share in the APMEA regions is rising continuously, and is witnessing a very healthy growth rate. We are very optimistic about the future growth of the solar industry in this region, as well as our share of solar panels. It is difficult to give the numbers, as solar demand and indirectly panel demand depends on a lot of variables, including government measures and private players. But we are confident that our share will be going north.
Your share in this region is continuously growing in Asia, whereas it is declining in Europe. Is the growth in Asia coming at the expense of Europe?
Our relative share in Europe has come down, but the volume has increased by a significant degree in the most important solar region in the world. Asian countries and the APMEA region is on an explosive growth spree and we are supplying a significant portion of this demand. This growth is not coming at the expense of Europe though, which is the most important and largest market for us at the current stage.
What is your strategy in the light of the weaker demand seen in Europe this year?
European countries, most notably Germany, have been the solar industrys most stalwart supporters and it is no surprise that in 2010 roughly 66 percent of our revenues were generated from shipments to European customers. In 2011, this concentration of demand in Europe is set to change. While Europe will continue to be the foundation of solar demand, we expect shipments to that region to represent only 53 percent of our 2011 total. In its place, were excited by the prospects and opportunities that are emerging in the Americas and the APMEA regions.
How important is the Indian photovoltaic market to Suntech?
There is no doubt that India has great potential when it comes to solar. This, coupled with the Indian governments ambitious JNNSM, which plans to install 20 GW of solar power by 2022, offers great opportunity to solar companies. For Suntech, it is one of the vital future markets and we would like to be one of the most active players in the coming years in this country. Right now, the Indian demand may be low, but a couple of years down the line volumes and project implementations will go high.
You dont have an Indian office as of date. Doesnt the market size attract your company to have a local office?
We have continued our efforts to localize our sales and marketing efforts in key markets, which has previously included building regional headquarters such as Schaffhausen (outside of Zurich) for Europe, San Francisco for the United States and Dubai for the Middle East. In India, we are working closely with our partners and that is very satisfactory at the moment. We are thinking on the lines of having an Indian office, but have not finalized anything as of yet.
What are the typical challenges you are facing in India, a country well known for its notoriously slow bureaucracy and project implementation?
It has been quite the opposite for us. We have not met any hurdles in India as of yet. We have been working through our partners and things have been running very smoothly.
Do you plan to execute more Rietech-like acquisitions either this year or next? Are there any other plans for vertical integration?
By acquisition of Rietech (Zhenjiang Rietech New Energy Science Technology Co. Ltd) we have increased our internal production capabilities for the manufacture of silicon wafers and silicon ingots, and reached an installed capacity for wafers and ingots of 500 megawatts (MW) – although our total internal capacity for cell and wafer will be 1.2 gigawatts (GW) by the end of current year.
In the past, we have acquired KSL-Kuttler (2008), a leading manufacturer of wet processing and automation systems for the printed circuit board industry base in Germany. In March 2009, we entered into a subscription agreement to acquire a majority interest in CSG Solar, a German company involved in developing, producing and marketing photovoltaic cells on the basis of crystalline silicon on glass technology. It all depends on need and synergy – if we think an acquisition or vertical integration is a win-win situation and leverages our core competency, we will definitely go for it.
How serious is the Intellectual Property Rights ( IPR) issue for Suntech?
IPR infringement is a global issue – it is only the degree which varies from country to country. We rely on patent, trademark, trade secret, copyright law and other contractual restrictions to protect our intellectual property. Nevertheless, these afford only limited protection. Policing unauthorized use of proprietary technology can be difficult and expensive. We actively pursue those who produce or sell counterfeit Suntech goods through investigations, civil action, and cooperation with criminal law enforcement agencies.
What about Suntechs share and progress in the BIPV market?
We entered into the BIPV market through our acquisition of Suntech Japan in August 2006. BIPV products generally have higher average selling prices compared to standard photovoltaic modules as they integrate solar energy generation into the design of a building or structure. Though it is high margin market, it is equally complex due to the numbers of players involved in the whole process. We are quite optimistic about the market, but the current size of total market is miniscule at this stage.
Organic or inorganic growth, or a combination of both? Which strategy is Suntech most likely to follow over the next three years?
By the end of 2011, we plan to increase our total cell capacity to 2.4 GW, of which 600 MW of cell capacity will be operated and owned by the joint venture with Wuxi Industrial Development Group and Wuxi New District E&D Group. The joint venture (JV) will own and operate a 1.2 GW photovoltaic cell production capacity at our Wuxi campus. We will own 40 percent of this venture. This JV will enable us to more effectively leverage our capital to expand capacity. Suntech will provide technology and train the management team for this facility so that we can ensure the solar cells meet our stringent quality and performance standards.
Our acquisition of 375 MW of wafer manufacturing capacity will benefit Suntech in three key areas. Firstly, it will materially reduce our silicon wafer costs and improve the earnings potential of our business. Secondly, it will lead to production and efficiency synergies through integrated research and development initiatives, enhancing our internal expertise in all aspects of ingot and wafer production. Thirdly, by expanding wafer capacity to 50 percent of our total solar module capacity, it will enable Suntech to balance our dual priorities of large scale and low cost.
By year end 2011 we expect to reach 1.2 GW of installed wafer capacity, matching approximately one-half of our target cell and module capacity of 2.4 GW.
So, for us, it would be an optimal combination of both the strategies.
pv magazine met Zhengrong Shi in New Delhi during his visit to the 5th Renewable Energy Expo.
In a brief history of ten years, few companies have performed better than Suntech Power. Shipping more than 1.57 GW of solar products in the year gone by, representing a growth of 125 percent over 2009 and elevating the company to number one position in terms of solar panels production worldwide has not been a small task.
Starting with a modest production capacity of photovoltaic cells from 10 MW in 2002, this figure reached 1.8 GW at the end of 2010. Furthermore, the company has a wafer capacity of 500 MW.
Suntech designs, develops, manufactures and markets a variety of photovoltaic cells and modules, including a range of value-added BIPV products. With leading positions in key solar markets, the company sold its 10 millionth photovoltaic module in 2010.
In order to focus on its core competency, Suntech exited thin film, and enhanced the firms business model by becoming a vertically integrated producer of silicon wafers by virtue of an acquisition.
The company also provides photovoltaic system integration services to customers in certain regions, and is expanding its support of utility scale photovoltaic systems. In October 2010, the company commenced module manufacturing operations in Goodyear, Arizona, in order to better serve the fast-growing U.S. market.