Reduction of standard solar cell production capacities and increased focus on specialist solar cells (BIPV, automotive)
Adjustment of business model in the area of solar modules and inverters
Consistent utilization of synergies with LDK Solar
The market environment for the German solar manufacturing industry changed drastically in the past few years. Market prices for photovoltaic components decline continuously. Against this background and in view of Sunways AG’s (SWW:GR, SWWG.DE, ISIN DE0007332207) difficult economic situation, the Management Board, with the consent of the Supervisory Board, passed a resolution on the Group’s extensive restructuring and realignment. The business model with respect to solar modules and inverters will be adapted. Standard solar cell production capacities at Sunways Production GmbH will be reduced, simultaneously activities will concentrate on specialist solar cells for the automotive sector and building-integrated photovoltaics (BIPV). The utilization of synergies with the LDK Solar Group, the company’s majority shareholder, will be consistently expanded. The envisaged changes will inevitably involve staff reductions across all functional areas and locations of the Group. The resulting total cost reductions will have a positive effect on the earnings development of Sunways and thus support the company’s funding efforts.
„The business model of Sunways will be supplemented by ‘increased services – reduced production activities’ and ‘intensified application development – reduced basic research’. Thus the Sunways brand will continue to stand for leading technology and innovation and our position as a provider of innovative products and customer-oriented solutions will be secured“, says Michael Wilhelm, Chairman of the Management Board of photovoltaics specialist Sunways, in view of the company’s announced realignment and restructuring. „We will continue to strengthen our distribution activities and intensify our international sales efforts. The initiated close consultation with LDK will enable us to push forward the necessary market entries for the Sunways brand. In addition, the expanded business model will give us the chance to develop new customer segments and cooperation opportunities“.
Numerous manufacturers worldwide are currently subject to economic strains and do not generate profits. The market prices for solar products and thus the net earnings margins generated by companies declined drastically in the past two years – e.g. the prices for solar modules dropped by more than 50 percent, the prices for solar cells by up to 60 percent. On the market side, this was mainly due to global excess capacities but also to uncertain political framework conditions with respect to renewable energies that are changing at ever decreasing intervals in many countries.
The Sunways Group’s economic situation increasingly deteriorated in the past quarters. Due to continuous losses, the reported equity capital was reduced drastically. In view of continuously declining prices, which cannot be offset on the cost of materials side, the current situation is not expected to improve in the short term. „We need to make money again“, Michael Wilhelm summarizes the situation. „Our employees are aware of this and everybody knows that there is a long and hard road ahead of us. But I also know that our management, employees and works councils are convinced that we will jointly lead Sunways back to the road to success.“
In the context of a capital increase, the LDK Solar Group acquired a stake in Sunways AG as a strategic investor at the end of last year. „We have a majority shareholder that clearly supports Sunways and has proved this again and again over the past months”, emphasizes Michael Wilhelm. This important commitment as well as the active cooperation in the distribution area and assistance with respect to the initiation of potential other strategic partnerships are of fundamental importance to the successful restructuring of Sunways.
The Management Board’s resolution on an extensive realignment of the Sunways Group comprises the following elements:
Until further notice, no solar cells for standard modules are to be produced at Sunways Production GmbH in Arnstadt; production activities will be limited to solar cells for specialist applications, such as e.g. building-integrated photovoltaics. The corresponding reduction of production capacities will involve an adjustment of the number of staff, also in supporting functions. At the same time, Sunways Production GmbH is to take on the function of production and service center for Sunways solar inverters and of service provider for solar modules. The Arnstadt workforce of currently 120 is expected to be reduced by about 50 percent.
In the inverter production segment, Sunways will in the future focus on market and customer specific product adaptations („customizing); the in-house development and production of devices will become less important while the development of holistic solutions (energy storage, energy management) will continue. Furthermore, the cooperation of the Sunways Group’s corporate and distribution divisions with its partner LDK Solar is to be intensified in the future, thus creating additional synergies for both sides. In this context and to accommodate the current environment, the Management Board decided to also reduce the number of staff at Sunways AG.
From today’s point of view, the total number of jobs within the Sunways Group of 265 may be reduced by about 40 percent. In view of the envisaged measures, the Management Board will immediately enter into talks with the works councils at the Konstanz and Arnstadt plants.