LDK-owned Sunways aims to be top-three inverter player

Germany’s Sunways has laid out a plan to return to profitability by 2014 under its heavily-indebted new owner LDK Solar – including a hugely-ambitious plan to become one of the world’s top three PV inverter suppliers within five years.

China’s LDK acquired loss-making Sunways earlier this year on the cheap, securing new distribution channels and a well-regarded brand in the world’s largest PV market.

Sunways chief executive Michael Wilhelm says the company’s long-term prospects “are much better [as part of LDK] than they would be under a standalone strategy”, and insists that the company will report a positive operating result in 2014.

Sunways is to retain its own identity and be left to operate more or less independently, although Bing Zhu, LDK’s chief strategy officer, has been appointed to the Konstanz-based company’s three-member supervisory board.

Wilhelm’s mid-term bullishness, however, masks deeper concerns about Sunways’ performance this year and next. Profitable in 2010, the company swallowed a net loss of €62.1m ($77.9m) last year.

After delaying its 2012 financial reporting due to the takeover, Sunways recently pulled back the curtain on a ghastly first quarter, in which its sales more than halved – including 90% drops in both Spain and Italy, the two countries outside of Germany where it has sales offices.

But Wilhelm is looking further along the horizon, and says that by co-operating closely with its Chinese owner, both Sunways and LDK are in a strong position to benefit from many of the changes reshaping the global PV market.

In addition to opening up the Chinese market to an extent Sunways could otherwise only have dreamed of, LDK will benefit from a front-row seat to the evolving market for “holistic energy generation, storage and management systems” in Germany.

For now at least, the two companies will continue selling modules under their own brand names as they “serve different customer segments”.

But on cells, LDK intends to leverage Sunways as a fount of technological development, including leveraging its established relationships with Germany research institutions.

Most spectacular of all, however, are their joint ambitions for the PV inverter market, which is expected to exceed $7bn this year, according to IMS Research.

Last year the top three global suppliers of solar inverters were SMA Solar, Power-One and Kaco. Sunways did not make the top 10 list, even in the European market.

Despite its vast size, LDK is among the most financially troubled of all the top-tier Chinese players, with a reported $2.13bn in current assets against $5.96bn in liabilities. LDK has lost nearly 80% of its market capitalisation in the past year.