The German manufacturer says the move, which was attributed to the "substantial" price pressure and Asian competition, will allow it to focus on "more profitable" photovoltaic module production, where it works with "sufficiently high margins".
"The build up of over-capacity, especially amongst Asian manufacturers, is currently having a damaging effect on the industry," explains Sebastian Biedenkopf of the Conergy management board. He goes on to say that this over capacity has resulted in a 30 percent price decrease for cells and over 20 percent for modules in the first half of this year. "To remain competitive in this difficult market environment it is necessary for the industry as a whole to take action – including Conergy."
Operations will not be shut down immediately, Antje Stephan, senior manager public relations for Conergy tells pv magazine, as it still has both wafer and cell orders to fulfill. Furthermore, it must first enter into talks with the workers council on how to proceed with the job losses and transferals.
In a statement released, Conergy says that it is no longer able to cover the costs of the wafer and cell manufacturing. However, it adds that due to the photovoltaic market "volatility", it may want to "take advantage of the flexibility of manufacturing its own wafers and cells in the future." As such, the two production areas will not be permanently shut down.
It says, "Should changes to the market mean that it would once again be cost-effective to operate one or both of these areas, this model would give the company the possibility of resuming operations quickly. The machinery will continue to be maintained with this possibility in mind."
Stephan further explains that in two weeks, cell manufacturing could be back up and running. Wafer operations, on the other hand, would be "much quicker".
She adds that in recent years, there have been many changes: 2008 was a boom year, then 2009 brought the financial crisis. 2010, meanwhile saw another boom, and 2011 is being characterized by high price pressure.
As of December, Conergy says it will source the cells for its photovoltaic modules from "well-known" third parties, which it has already worked with. While Stephan would not disclose who they were, she did say that most of them are Asian. "The cells are very efficient and a lot cheaper," she said. She added that Conergy already has quality checks in place in Asia.
Stephan goes on to say that it takes just one day to fly in solar cells from Asia and then one day to build the photovoltaic module. This is in comparison to the six weeks it takes for an entire module to be shipped. In that time, she explained, prices can fall by 15 percent and there are also a lot of currency changes which occur.
Due to Conergys decision, and the planned restructuring of the factory, around 100 permanent jobs will be lost. Meanwhile, a further 100 staff from the affected areas will be transferred to the module production section. Another 100 temporary staff on the module production side will also be laid off. In total, Conergys permanent workforce will be reduced from 450 workers to 350.
It is not clear when the redundancies and transferals will be made. However, they are expected to be implemented by the end of the year.