chinese solar panel maker flames out
Just a few years ago, the business of Suntech, the maker of solar components, and its chief executive, Shi Zhengrong, began to boom.
In 2007, Time magazine called him one of the environmental heroes.
CNN called it \"sunshine boy in China\" on 2008 \".
Fortune magazine named him \"the new king of solar energy in China\" in 2009 \".
That year, Thomas Friedman, a New York Times columnist, also listed Shi Yong and Shang De as a model for China\'s green leap.
What he called \"artificial satellites of our time\" is a spur to the United States. S.
Clean energy policy.
Now, however, the Chinese satellite has crashed on Earth and the Sun King has been overthrown.
Under the impact of fierce global competition, in the face of global manufacturing surplus and heavy debt, Suntech\'s director expelled Shi MOU in March 4 and defaulted on the value of $0. 541 billion after 10 days.
The following week, a Chinese court declared the company bankrupt after eight Chinese banks filed an application.
On Wednesday, the company announced that 2012 of its revenue fell 48% from the previous year. Suntech —
2011 is the world\'s largest seller of silicon.
Photovoltaic Module based
Valued at $13 billion on the New York Stock Exchange;
Today\'s value is less than 1%.
Warren Buffett may be looking at Suntech\'s full or partial stake, a news that the stock price has risen more than 80% in a week, but the acquisition of Suntech may be an adventure.
In February, Pavel Molchanov, an analyst at investment firm Raymond James, called Suntech \"a well-known \'bot\' company.
\"Suntech\'s bankruptcy is more significant than the damage caused by the company\'s shareholders and creditors;
It breaks the myth about the strength of China\'s solar industry.
Rely on the government\'s ability to support it at a critical juncture.
So far, Chinese policy makers have created a world with subsidies.
Leading the \"green technology\" industry and pushing the country to the top of the economic value chain.
But green technology does not guarantee the vigorous development of enterprises.
The world\'s manufacturing capacity has grown to 60 gigawatts, most of them in China, in the race for global solar supremacy.
This exceeds the demand for solar energy, which is expected to reach 35 gigawatts this year, enough to power about 26 million households.
As a result, the price of photovoltaic panels has plummeted, and overcapacity will take three to five years to shrink, said Bill Wiseman, managing partner at McKinsey\'s Taipei office, a consulting firm.
But the Chinese government is not in a hurry.
Last month, LDK, another Chinese solar panel maker, defaulted on loans for cash problems.
Chen Yuan, the outgoing president of China\'s national development bank, announced on Wednesday that China\'s National Development Bank should cut solar loans.
At the same time, the manufacturing of silicon-
Solar components have become a commodity business that produces large profits for products that are almost difficult for consumers to distinguish, at best only a small profit margin.
Innovation is back in the expansion line, especially in China.
\"People are going all out for the last penny of their profits,\" Molchanov said in a recent interview . \".
The factory that produces clothes or toys is doing better.
The rise of Suntech is a rag. to-
The wealth story of its founder.
Shi gave up the adoption of poor parents in the agricultural area, he performed well in school and received a master\'s degree, and then moved to Australia on the exchange program in 1989.
He received a scholarship to do solar cell research at the University of New South Wales and soon received a doctorate and became a development next-
According to an article written by his patron and Professor Martin Green for Time magazine, power generation solar technology.
In 2001, Shi returned to China and founded Suntech with a seed fund of $6 million from Wuxi\'s local government.
At that time, with the support of the central government, Wuxi was turning itself into a technology center as part of a broader effort to climb the manufacturing ladder nationwide.
In addition to cash, it offers land and tax benefits and cheap electricity to Suntech.
Like other solar component manufacturers, Suntech uses generous subsidies from German and other governments to boost sales.
In December 2005, Suntech became the first Chinese private company to be listed on the New York Stock Exchange.
Within four years, he became a billionaire.
Suntech, which sold $3 billion in 2011, is the world\'s largest maker of solar panels.
It has set up an assembly facility in Arizona.
A business consultant recalled that the charismatic Mr. Shi appeared at a meeting in Bentley.
Stone said he didn\'t want to show off so he left the roster
According to the account, Royce is at home.
But it is not only Shi who is involved in the solar industry;
It became a classic bubble.
There are hundreds of manufacturers in China alone. Most are low-cost and low-
But there are powerful giants like Yingli and Trina Solar.
There are about two in China.
Third in the world\'s solar panel manufacturing capabilities.
In theory, China can meet all the solar demand in the world, and there is no room for the United States. S.
Companies in Germany, Japan or Taiwan.
Suntech is trying to distinguish itself with its Pluto technology, a manufacturing process that allows cells to turn sunlight into energy more effectively.
But other companies are setting a new record for efficiency.
\"Ten years ago, Suntech was indeed a pioneer in building China\'s solar industry.
\"Shi at that time was a visionary,\" Molchanov said . \".
\"He helped create this low.
Cost manufacturing in China.
\"In a period of time, Suntech was successful from the 2009 slowdown.
As Suntech became the world\'s largest maker of solar panels, Europe\'s debt crisis followed.
Profit margins plummeted and customers piled up unpaid bills.
On June 2012, a confused Citigroup analyst pointed out in a report that with major countries such as Germany and Italy drastically cutting subsidies, Chinese manufacturers led by Suntech increased production capacity by 30%, \"This will only aggravate the situation of oversupply.
\"In the foreseeable future, the price of modules may be lower than Suntech\'s production costs,\" the report said . \"
He resigned as Chief Executive Officer but remained the executive chairman.
Still, he is optimistic.
\"Don\'t despair,\" he wrote on his blog.
This is a necessary ceremony for our mature industry.
He dismissed Suntech\'s criticism of its rapid expansion, saying, \"The world cannot wait a hundred years to resolve the energy and environmental crisis on our planet.
He was ousted nine months later.
In a statement at the time, he called the move \"wrong and illegal \".
Board members, he said, \"did not pay attention to the most important issue at hand and did not act in the best interests of the company . \".
Suntech is not unique.
Most Chinese solar panel manufacturers have been losing money.
Some manufacturers in the United States and Germany have also gone bankrupt.
But Suntech is carrying a lot of debt in the process of rapid expansion.
When 0. 56 billion euros ($734 million)
Bonds with majority pledge as collateral for loans
It turns out that the affiliates owned do not exist.
The subsidiary promotes the use of Suntech products in Spain and Italy.
Regulators in the United States and Europe are conducting fraud investigations.
\"Everyone in this industry is facing the same challenge,\" Molchanov said . \".
\"But the reason for killing Suntech has nothing to do with technology, and it has nothing to do with the problem of solar energy in Europe.
This is the balance sheet.
Suntech borrowed more than $2 billion from Bank of China, China Development Bank and even international finance companies.
Suntech only needs to borrow money to pay interest.
Meanwhile, at the end of 2011, a group of AmericansS.
Solar panel manufacturers submitted a counter
And won tariffs on Chinese companies. U. S.
Statistics show that imports from China have fallen sharply, although some Chinese
Third countries may make panels.
Ben Santarris, spokesman for rival SolarWorld USA, said: \"We believe that Suntech has suffered the same unsustainable, distorted industry factors that everyone faces: dumping pricing in China and a large German subsidiary
Headquartered in SolarWorld.
\"Chinese companies can only sell at below-cost prices until they close down or the Chinese government supports them, which expands the-
For years, investors have thought the Chinese government would bail out Chinese solar companies, and Suntech and its battered shareholders and bondholders are still hoping for help.
A large portion of default bonds are currently sold for about 30 cents, held by the United States. S.
Private equity firms may buy bonds at large discounts.
But the Chinese government may not be helping.
In fact, the Chinese government\'s support for solar energy has become tepid, although in the next decade the Chinese government has an ambitious goal of adding about six gigawatts a year.
The National Development and Reform Commission approved
Solar electricity price-
Fees paid to developers
15 cents per kilowatt hour, but no one is willing to pay for it.
The State Power Corporation\'s State Grid is not allowed to raise household electricity prices.
But the central government has not included subsidies in the budget.
Also, it is not easy to connect to the grid.
For lack of market relief, Suntech investors are hoping that the Wuxi municipal government, where Suntech is located, will help the company. Many of Suntech\'s more than 10,000 workers are employed in Wuxi.
According to Chinese news, less than 3,000 of workers are still working. (
Suntech declined to comment on the report. )
For the Wuxi municipal government, rescue will require a lot of money without the support of the central government, which at least wants industry integration in principle.
China\'s national development bank has stepped in to help solar companies.
Jinke Solar, which lost $0. 248 billion last year, said that the Guangdong branch of the China Development Bank agreed to lend $1 billion in five years in December.
On April, the bank gave Jinke solar energy company 15-
Annual loans of nearly $60 million.
In January, the bank provided a lifeline of $71 million to another Chinese solar company, Solar LDK.
Suntech is believed to owe $0. 4 billion to China\'s national development bank.
But banks that have never had low interest rates are not moving forward, and LDK is scrambling to find investors.
The plight of Suntech is mutually reinforcing.
Demand for solar energy in new markets such as the Middle East, Thailand and Australia and the United States is strong.
But when the survival of a company is uncertain, it hurts the business.
Solar panels usually carry 20-
Annual warranty, it will not be worth it if the company goes out of business.
According to its Securities and Exchange Commission, this may be one of the reasons Suntech\'s third-quarter sales fell 18% from the same period last year, while sales at most other companies are rising.
David King, a replacement for Stone, is a financial expert with extensive experience at price water houseck, beckertel and Walt Disney fantasy Engineering, who is trying
The company will meet with creditors in Wuxi on May 22 and meet separately in Europe.
However, there has been no restructuring plan so far, and the future of the company is still bleak.