- Category: Business
25 Mar 2013
- Published on Monday, 25 March 2013 09:41
- Hits (3310)
Germany’s Bosch has decided to abandon its solar energy business for good.
The engineering and electronics company confirmed its plan on Friday, stressing that there is no possible way to make the business last amid prevailing overcapacity and enormous price pressure in the market.
The move came just days after China’s Suntech Power, one of the world’s largest producers of solar panels, confirmed bankruptcy after missing a $541 million payment to bondholders.
It also emerged subsequent to German industrial multinational Siemens announcing in October 2012 that it will discontinue its venture in the solar business, according to an Associated Press report.
By the start of 2014, Bosch will stop manufacturing solar cells, wafers and modules. It will also sell its plant in Venissieux, France and is discarding its plan to develop a new plant in Malaysia.
“The decision was very difficult for us. First, because we've recorded heavy losses. Then there are the prospects for photovoltaics, and the important role solar energy will play in the future. But when all is said and done, we simply cannot accept such heavy, long-term losses in all good conscience,” said Franz Fehrenbach, chairman of the Supervisory Board of Robert Bosch GmbH.
“And last but not least there is the responsibility for our many associates and their families. Our workforce has shown incredible commitment and made significant progress in reducing manufacturing costs,” said Mr. Fehrenbach.
The solar energy division, which has around 3,000 employees, lost roughly 1 billion euros ($1.3 billion) last year.
The company said in spite of its efforts to significantly trim down manufacturing costs in 2012, it was not enough to compensate the declining costs of up to 40 percent.
“We considered the latest technological advances, additional ways of reducing costs, as well as possible partnerships. However, none of these possibilities offered a solution that would be economically viable over the long term,” said Dr. Volkmar Denner, chairman of the Board of Management Robert Bosch GmbH.
The global solar power industry has been struggling against overcapacity coupled with declining subsidies, lower sales and growing tight price competition.
According to a recent report from GTM Research, overcapacity in the industry will leave at least 180 panel manufacturers with two most like scenarios by 2015 – termination or acquisition.
GTM Research projected that global solar equipment will surpass demand by 35 gigawatts per year over the next two years with the largest casualties to be felt in high-cost manufacturing markets like the United States, Europe, and Canada. - C. Dominguez