What led to the current insolvency proceedings? Did you misjudge market developments, in particular for thin film?
Peter Fath: We made the decision for thin film in a boom phase, when everyone talked about the golden era of thin film technology. Furthermore, we decided to offer turnkey solutions for the thin film segment. And we received the first order for this relatively quickly, which in turn promptly revealed the challenges of this new technology. This then resulted in delays and increased costs. Therefore, in March, we decided to supply only individual machines for thin film production and no complete production lines anymore.
What role did the fall in silicon prices play?
Fath: That had a strong impact on us. Our customers tried to prolong project processes during the phase of the sharp decline in prices for silicon. So for us this meant invoices were either not paid, or not paid within the prescribed period.
What has to happen now in order to put Centrotherm back on course?
Tobias Hoefer: The first and most important step consists in the preparation of a reorganization assessment that we prepare ourselves within the scope of the insolvency protection proceedings in cooperation with a very experienced management consulting firm. This will be submitted to the court within three months and then discussed with our creditors.
Will your business operations continue completely unaltered?
Hoefer: Yes, current business operations are secured, we have sufficient cash resources to this end. This means that we participate in invitations to tender and we have been able to win new orders. Centrotherm is solvent and responsible for the continuation and reorganization of the company otherwise, it would not even be possible for us to initiate reorganization under insolvency protection proceedings. In addition, in the middle of August we received debtor-in-possession financing from a bank consortium in the amount of 50 million in order to support the current insolvency protection proceedings. Thus our liquidity has increased to more than 90 million.
In the middle of July Centrotherms share price collapsed by up to 86& and fell to 0.58. Has it recovered in the meantime?
Hoefer: Our share price has recovered once again after the price sharply declined for a brief period after announcement of the insolvency protection proceedings.
How important is a lean corporate structure?
Hoefer: Many companies simply grow in the course of time without this always making sense. We are now concerned with ramping down a few activities, in order to strengthen the company as a whole. As a first step, we already integrated our management services company into the corporation with its staff of 120 who, among other things, were responsible for financial controlling. The cells and modules division will also be reintegrated into Centrotherm AG. In addition, we are presently reorganizing the project business at Centrotherm Sitec as well as our engineering services. All in all, we aim to further develop our core divisions and offer peripheral business in partnerships with other companies. In concrete terms, this means that we want to strengthen and develop our business in the area of crystalline cells and modules and high-purity silicon.
Fath: The central challenge is to prepare machine construction for the period after the crisis. In the future, close cooperation between leading companies in the industry, manufacturers and original equipment manufacturers, will be imperative for survival whether in Europe or anywhere else in the world.
Are you planning to develop any other business divisions apart from photovoltaic technologies?
Fath: Yes, we are aiming at reasonable diversification. Centrotherm also has good semiconductor facilities, as well as good coating equipment for applications outside of photovoltaics. In my opinion, a sensible mix would be two-thirds photovoltaics and one third other applications. At present PV accounts for more than 90% of our sales share.
In the spring you indicated that in order to get back on track Centrotherm will have to save 22 million by the end of 2013. Is this still your target?
Hoefer: Yes, this target is part of our reorganization plan, our structures have to be adjusted to developments on the market.
In other words, further layoffs?
Hoefer: Structural adjustment may also include further cuts in personnel. On the other hand, we will also strengthen several divisions.
Do you plan to step up relocation of production abroad, particularly in the direction of China?
Fath: There is a number of markets that very much appreciate technology "Made in Germany" and which we will continue to serve from Germany. Our main plant in Blaubeuren is very well positioned, and we will continue to operate from here. But if this undelightful EU trade dispute with China really continues and equipment manufacturing is affected as a result, then we will have to react and manufacture on location.
Apropos "undelightful": So you do not think a great deal of the EUs planned anti-dumping proceedings against Chinese PV imports?
Fath: Anything that slows down global PV growth is bad. I am a big advocate of free trade. Trade restrictions are justified only if it can be proven that unfair subsidies are involved. But that is a question that is completely open at the moment.
Read the full interview with Fath and Hoefer in September's pv magazine.
Edited by Becky Beetz.
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