"We Need a New Strategy for Asia"
By Florian Wessendorf, VDMA
The German PV
suppliers are internationally getting back into business again. However, China
as well is increasingly entering high-tech sectors of the PV equipment
industry, says Florian Wessendorf, Managing Director of the working group
Photovoltaic Equipment within the German Engineering Federation VDMA.
Neue Energie: The PV equipment market worldwide is growing, PV fabs’ capacity utilization is improving again. Are we facing a new boom in demand for German PV production equipment?
Florian Wessendorf: The market for production solutions and
manufacturing technologies has been very dynamic during the first half of the
current year. The turnover of manufacturers of components, machinery and
equipment for PV in Germany has grown by almost 39 % in the first half of 2014
compared with the same period of the previous year. We expect the gap between
supply (production capacity) and demand (wafer, cell, module) to be filled by
the end of 2014 due to rapidly developing PV installation markets and the
positive capacity utilization of the leading PV manufacturers. That means:
investment in equipment and technology will increase by the end of 2014 /
beginning of 2015. However, trade conflicts of the US with China and Taiwan
could negatively interfere here.
Neue Energie: Except for Solarworld no major German PV manufacturer has survived the price war with China. Doesn’t that reduce your optimism?
Florian Wessendorf: It was not only Solarworld who survived, that’s a wrong impression. Other manufacturers as well have survived the crisis. Some of these companies are now under international management and are partners for the PV equipment industry as well. The perspectives for solar production in Germany are more positive than it might look like at the moment. When pushing the right buttons production in Germany will remain competitive to Chinese competitors. Therefore strong partners are needed. Besides manufacturers and suppliers this refers to excellent German research institutes.
Neue Energie: You name it: PV as the driver of innovation is based on the co-operation of researchers, manufacturers and engineers. Doesn’t the power of innovation suffer from the insolvency of the manufacturers?
Florian Wessendorf: Definitely not! Many equipment manufacturers and technology suppliers are integrated in research projects. New machine concepts, automisation, integration solutions, energy and resource efficiency - PV equipment manufacturers constantly develop new solutions to successfully cope with cost pressure.
Neue Energie: The lead in technology of German equipment manufacturers is about to diminish. Asian players quickly increase their know-how in production technology. How do you want to keep ahead of the competition?
Florian Wessendorf: The benchmark position of German PV manufacturers compared to their international competitors is excellent. Even in 2013 German equipment manufacturers dominated the world-market with a share of more than 50 %. This is, of course, no law of nature. At the moment Chinese companies try hard to move from low-tech to high-tech in order to enter segments of the German machinery industry. They get State aid for that. It is the declared aim of the Chinese government to stimulate the mid-tech market and technology segment so that local mid-tech manufacturers can enter high-tech segments in technology development. With additional consolidation guidelines with harsh implementation requirements e. g. high research and development budgets or environment and quality benchmarks the Government intends to increase the competitiveness of selected local suppliers compared to foreign competitors. The idea is to establish “National Champions”. It is one of the requirements that by the end of the five-year plan 80 percent of photovoltaic equipment installed in China has to be of Chinese origin, even though the performance of the Chinese installations is worse. This is the background for a new Asia-strategy of the German machinery industry. At the same time it has to strengthen its position in markets outside China.
Neue Energie: How could a strategy for Asia look like?
Florian Wessendorf: Only those companies will survive who can offer the best solutions at competitive prices. Therefore, German equipment manufacturers have to strongly push innovation. At the same time, closeness to the customer becomes increasingly important. Expanding the aftersales and service business for example offers great chances for integrated, innovative solutions and optimized service network strategies. Another means to cope with the challenges of the Chinese market could be production in China and joint technology development with Chinese customers. With regard to markets China remains the leading location of production and offers the most important growth potential for German companies. Good opportunities are available as well in the classic production locations as Taiwan, Malaysia, the US and Japan and in countries like Saudi Arabia, Mexico, India and South Korea. Countries like Turkey, Singapore, Thailand and Germany offer production potential and sales opportunities for the machinery industry as well.
Image Source: Claudio Zacc—Fotolia
December 11, 2014