pv magazine: Why has Fimer decided to take over ABB’s business?
Carzaniga: Fimer decided to take over the ABB solar business because the solar market is growing globally. The product range developed in the last year by ABB is really innovative and reliable, addressing all different segments and completing Fimer’s offer to be fully complementary.
Moreover, considering Fimer’s long-time commitment in research and development, the new developments that ABB is launching – blockchain, new digital frontiers and product miniaturization – will fit perfectly with our strategic growth plan and will boost our position in the competitive arena.
Fimer announced it will acquire ABB’s solar inverter business this week but the deal will not be finalized before the beginning of next year. That is an unusually long heads-up for an announcement. What is the reason?
The timing between signing and closing is strongly affected by the complexity and the width of the business and in this type of deal this timing is quite standard. In order to grant a seamless transition for customers and people, there are many activities of a carve-out that regards different countries to be finalized before closing.
According to the announcement, Fimer will receive nearly half a billion euros over the next six years. This sounds like you are being paid to take over ABB’s inverter business? Can you tell us something about the deal?
The value of the transaction has not been disclosed. However, it includes the commitment to honor all the warranty activities that ABB has to guarantee for the full installed base of greater than 36 GW [of inverter capacity].
ABB could not find a high enough profit margin from its inverter business, how will Fimer do so?
We believe that successful businesses are carried out with competence, commitment, focus and passion.
Fimer has almost 80 years of history and it is a solid and smart growing company and the PV inverter business division has been our core business for over 30 years and it represents over 84% of our revenues. On top of this, our organization is very lean, flexible, and dynamic and these characteristics – together with strong investments in R&D and people development – help us to better compete in this fast changing market. If we look at the key trends of the market, like advanced technologies, distributed energy generation and microgrids, we strongly believe there is actually a favorable, profitable and sustainable market for Fimer out there.
What is the expected shipment volume for 2020, once the deal is wrapped up?
Expected shipments for 2020, following our industrial plan integrated with synergies, are greater than 7 GW.
Measured by sales success, your regional focus has been on Latin America. With the marketing channels of ABB in your hands this could change a bit, as ABB was particularly successful in Asia. Will Fimer boost its presence in India and Southeast Asia?
Of course our presence in Latin America will be increased, especially in different market segments where Fimer is yet not present. For sure, this integration will also boost our presence on a global scale, opening new geographical regions which are very strategic for the entire solar business, like Europe, Asia-Pacific, Japan and North America.
ABB has production and R&D sites across many countries. Will you retain those facilities or are you planning to continue production out of Italy?
Our commitment is to continue to create value and to maintain the existing facilities as well as employment levels. We are not interested in scaling back. We believe investments in research and development are of key importance and that’s why we decided to keep working with the three R&D hubs in Finland, Italy and India. We want the transition process to be as smooth as possible in order to ensure business continuity.
In terms of employees, ABB says it intends to retain all of the 800 employees currently involved in its inverter business. This decision will be yours to make. What are your plans for those employees?
As mentioned before, our focus is on value creation. And this objective can only be reached when you are fully convinced that people are one of your key assets. We are working to grant a seamless transition, maintaining the actual workforce structure. We want to avoid any business disruption, also at the management level. We are sure we can easily support and engage with them in our future path.
ABB and Fimer have some competing inverter products. I think it is fair to assume you will decide to leave just one in production where this applies. Do you already know which string inverters and which central inverters you will keep?
The product range of both companies is very complementary, going from small string inverter to big central solutions offering the widest range on the global market. Also, in central inverters, we followed different approaches, being typically the actual ABB’s inverter “outdoor” and Fimer’s indoor, in-container solution. I think that there will be different and coexisting opportunities for both the “technologies”.
Now it has a strong string inverter portfolio will Fimer change its product strategy away from the big central inverters it is known for?
The strategy will be in tune with the market requests. The significant upgrade in our offering will represent a step further to serve all customers in all market segments without limitation.
In July 2018 you told pv magazine that you are planning to get listed on the Italian stock exchange, can you give me an update on this?
We decided for the moment to hold off on an IPO due to current general market conditions.