News Article
Conergy Slows Down In Industry Response
Company to halt cell production and focus on module profits
The global solar market in 2011 is suffering from substantial pressure on prices as well as over-capacity. Conergy is reacting to the current difficult market situation by planning to focus on more profitable module production at its plant in Frankfurt (Oder). As it is currently not possible to cover the costs of wafer and cell manufacturing, these will be discontinued for the time being. These planned changes will allow Conergy to continue to operate competitively and profitably at its plant in Frankfurt (Oder), even in the current difficult market environment.
"The build up of over-capacity, especially amongst Asian manufacturers, is currently having a damaging effect on the industry" says Dr Sebastian Biedenkopf of the Conergy Management Board. "This has resulted in a 30% drop in prices for cells and over 20% for modules in the first six months of 2011 alone. To remain competitive in this difficult market environment it is necessary for the industry as a whole to take action "“ including Conergy."
The planned focus on module production in Frankfurt (Oder) will allow Conergy to overcome the cost problems that are also affecting other European manufacturers, for it is in this particular part of the value chain that Conergy works with sufficiently high margins, even in today's difficult market environment. As part of the planned restructuring of the factory the company expects to lay off about 100 permanent employees. Around 100 staff from the affected wafer and cell areas shall be transferred to the strengthened module production area, where they will be offered new jobs. The company will then discontinue the employment of temporary staff in production areas.
Conergy Management Board member Alexander Gorski: "The planned restructuring is a difficult step but unfortunately also a very necessary one. Focusing on module production will reduce our fixed costs substantially and make us less prey to market and currency fluctuations. By taking this step Conergy can not only make its Frankfurt (Oder) plant profitable but can also safeguard the remaining 350 jobs in the long-term."
From December 2011 Conergy will source the cells for its modules from well-known external suppliers that the company has already worked with. In selecting the cells for use Conergy will apply the same quality standards that it does to module production. In this way Conergy will continue to have control over product design and can produce its PowerPlus modules in Frankfurt (Oder) with even higher levels of efficiency and performance classes in the future.
Because of the volatility of the photovoltaic market Conergy may want to take advantage of the flexibility of manufacturing its own wafers and cells in the future.For this reason these two areas shall not be shut down permanently. Conergy will continue to process existing orders as usual and will also regularly assess the cost-effectiveness of both areas as the market develops. Should changes to the market mean that it would once again be cost-effective to operate one or both of these areas, this model would give the company the possibility of resuming operations quickly.The machinery will continue to be maintained with this possibility in mind.
For the realization of the planned measures the company will now immediately enter into talks with the workers' council.
