Centrotherm Photovoltaics is a German provider of technology and equipment for the photovoltaics industry. For example, the company is a developer and seller of “…turnkey production lines for the manufacture of crystalline solar cells, including the full range of engineering and technological process services.” Centrotherm’s business spans the entire photovoltaic supply chain from raw material to designing silicon factories to final production. Centrotherm covers polysilicon and thin film modules. Centrotherm earned 509M euros in 2009, and during the first 6 months of this year, the company earned 278M euros in revenue (about $370 U.S. today).
Enablers such as Centrotherm lower the barriers of market entry for well-funded and organized solar companies and make it possible for existing companies to speed improvements in manufacturing. I have followed the company for some time, but it recently caught my closer attention with two announcements regarding successful ventures in China. These ventures were a reminder of how competition in the industry will continue to increase over the coming months and years with China applying a lot of the market pressure thanks to government-sponsored enterprises.
September 22: “Centrotherm Photovoltaics completes first production line for Chinese state company”
Centrotherm commissioned a 60MW solar cell turnkey factory with plans to expand to 1GW of capacity for Chinese state company Lu’an Group Corp. A Centrotherm subsidiary is also helping Lu’an Group develop the capacity to produce up over 3000 metric tons (tonnes) of polysilicon.
It is interesting to note that Lu’an Group is a mining company that specializes in the extraction of coal and the generation of various coal-related products. The importance of this company to China is clear from its recent award as “…one of The Top 10 Most Influential Enterprises in China by China Enterprise Association and China Enterprisers Association.” Its strategic goals are grand indeed. The company states:
- Coal output will reach around 70 million tons
- The staff number is below 60 thousand while annual average income of each member will reach over RMB 60 thousand
- The annual sales income of the Group will reach RMB 50 billion
- Priority to the development of circular economy, and constructing four large ecological industrial parks of Tunliu Coal-To-Liquids Eco-Industrial Park, Gaohe Coal-Power Eco-Industrial Park, Lucheng Coke-Chemical Eco-Industrial Park and Donggu Power-Chemical Eco-Industrial Park
- Elongating the three main industrial chains of coal-power-chemical, coal-coke-chemical, and coal-oil-chemical
- Constructing two state-level bases (the first state-level Coal-To-Liquids base and Chinese injection coal production base)
- Constructing “China Lu’an” energy and chemical group and setting a banner of new-style coal circular economy in China coal industry.
The circular economy is also called the recycle economy. It defines a process where the waste of one industrial process becomes the fuel for another and is promoted as a method of sustainable development. Lu’uan has a subsidiary that is dedicated to developing the “circular and green economy.” While solar does not receive specific mention, Centrotherm’s announcement implies that this coal company is making a serious commitment to the sector that brings the full backing of the Chinese government. Can you imagine a coal company in the United States investing in solar energy? What an intriguing contrast…
September 23: “Centrotherm Photovoltaics signs agreement for multi-crystalline ingot furnaces at Chinese state company STSIC”
In this deal, Centrotherm beat out several competitors to secure a contract valued in the “single digit million euros” to deliver multi-crystalline ingot furnaces to Shaanxi Tianhong Silicon Industrial Corporation (STSIC). STSIC recently won numerous awards from the nonferrous metal committee of China. So Centrotherm’s success here likely has very promising implications for their future business and growing success in China.
STSIC is a major conglomerate combining state-owned and private enterprise (see here). The involvement of such a company in the production of silicon demonstrates again China’s firm commitment to success in the solar industry. Those solar companies able to secure pieces of the business in China should also continue to do well in a global environment that is sure to get ever more competitive, ever faster.
Be careful out there!
Full disclosure: no positions