Roth & Rau, based in the German state of Saxony, is the world’s sixth largest maker of solar-manufacturing equipment since the merger of Meyer Burger and 3S, according to market researcher VLSI.

Roth & Rau says it has formed a joint venture with a Chinese firm to build factories for cadmium telluride (CdTe) modules, for which it will provide the production equipment. As a first step, the two companies will build an 80-megawatt “reference” factory in Brandenburg, Germany. Roth & Rau will provide €19.6m in capital and hold a 49% stake in the German factory.

Once the German facility is operational, the firms wil begin building a series of CdTe plants in China to tap its growing demand for solar energy. Roth & Rau will hold a 32% stake in the Chinese plants and will supply their production equipment, with orders expected to total €100m.

Meanwhile, Roth & Rau has acquired Eindhoven-based OTB Solar for €35.5m, in a move meant to strengthen its core business of making production lines for crystalline solar cells.

OTB holds valuable intellectual property in plasma-enhanced chemical vapour deposition, anti-reflective coating systems, as well as industrial ink-jet printing applications seen as holding vast potential for producing high-efficiency solar cells.

“Like cell and module manufacturers, equipment suppliers are also undergoing a far-reaching process of consolidation,” says Roth & Rau chief financial officer Carsten Bovenschen.

“At the end of the day there will only be a small number of providers with high-process expertise, a global presence and the critical mass to negotiate with customers on equal terms.”

Roth & Rau has grown rapidly in recent years, notching up sales of €272m in 2008, and swelling its workforce to more than 450 employees. But after several disappointing quarters last year, chief executive Dietmar Roth downgraded his expectations for 2009 to €200m. The company will report its full-year 2009 financial results on 31 March.

In addition to its Chinese venture, Roth & Rau founded a subsidiary in Mumbai in 2009 to take advantage of the Indian government’s recent embrace of large-scale solar generation projects.