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Two weeks after Conergy was busy putting out fires surrounding the rumors that it was planning to close its manufacturing plant in Frankfurt, the company has advised that it will be halting production of its wafer and cell manufacturing lines at the German facility. The company advised that its PV module production at the Oder plant would continue, but that the over-capacity, price pressures and the inability to cover the costs of wafer and cell manufacturing had forced it to discontinue the productions for the time being.
The company joins a growing list of companies who have shuttered their manufacturing including REC’s continued shutdown of its Norwegian facilities and SolarWorld’s decision to stop its legacy production lines at its US and Germany sites. However, Conergy stressed that it would continue to reassess the cost-effectiveness of the wafer and cell manufacturing divisions and therefore does not currently plan to shut down the units permanently.
“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.”
Financial details surrounding the shutdown were not released, but Conergy expects to let nearly 100 permanent employees go during its restructuring with around 100 staff members from the wafer and cell division transferred, with new job offers, to its module production unit. Starting in December, the company will source the cells for its modules from external suppliers that it has previously worked with.
Conergy Management Board member Alexander Gorski commented, “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.”
The company plans to process existing orders as usual and advised that with the possibility to bring one, or both, of the manufacturing lines back online in the future, it would continue maintenance of the machinery so that if it chooses to start operations again, the company can do so quickly.