SOLAR POWER INDUSTRY RISING AGAIN … DOMESTIC BUSINESSES WITHDRAWING

The solar power industry, which has undergone a three-year slump, is showing a sign of resurrection. Europe, the biggest market of solar power in the world, is slowly growing away from a financial crisis, and China, America and Japan are also showing signs of rapidly increasing demand for solar power.

Nevertheless, Korean businesses are withdrawing from the solar power industry one after another. In 2010, when the solar power industry was entering into a global slump, many businesses started investing competitively; but at the point of time when the solar power market is actually reviving, they are crumbling without being able to endure this difficult period. On the other hand, Chinese businesses are making rapid strides after reorganizing the solar power industry through restructuring.

- Domestic businesses withdrawing from the solar power industry

Samsung Fine Chemicals suddenly announced on the 20thofthismonththatitwouldsella35%stakeofSMP,apolysiliconjointventure,toSunEdison. And recently SK Innovation also decided to sell Helio Bolt Company, an American solar cell manufacturer. LG Chemicals also put off new investment into the polysilicon business last November, and is considering a drastic cut or a complete withdrawal of future investments. Posco Energy is also considering a scheme of suspending a solar power generation project that it was implementing in Nevada, U. S. A. Besides, Hyundai Heavy Industries and KCC have withdrawn from the polysilicon business, and Woongjin Holdings has put its Sangju factory of Woongjin Polysilicon up for sale. 

- China is running … OCI and Hanwha are lonely fighters

Unlike the Korean situation, the global market is clearly showing a sign of improvement. Declaring “a war against smog”, China is instituting policies to promote the solar power industry. The environmentally friendly policies of U. S. President Barack Obama and a Japanese preference for giving up nuclear power generation are adding a great force to a global business recovery. Deutsche Bank, a German investment bank, made a forecast in a recent report called “A Second Gold Rush” that “China, America and Japan will lead the world solar power industry and it will make a big growth.” In reality, the price of polysilicon, the main material of solar cells, has made a sharp rally by more than 40% for a year and half, recovering to 20 dollars per kg in the recent 16 months.

The leaders of the global solar power industry are Chinese businesses including GCL, Yingli and JA Solar. As Korean businesses, just OCI, ranking third in polysilicon production, and the Hanwha Group, ranking third in cell production, are competitive. Especially OCI is assessed to have its own technology to withstand the attack from low-priced competitors of China. 

(From Chosun Ilbo dated March 27th, 2014)