ReneSola banks on 'trade frictions'
China’s ReneSola is plowing ahead with its strategy of manufacturing PV modules in countries around the world, betting that protectionist measures like local-content requirements will continue to spread, and give it an advantage over larger rivals.
A number of major Chinese manufacturers have contemplated opening factories overseas, and several have actually done so, including JA Solar, which has a new factory in South Africa, and CSun, which is making modules in Turkey.
But none have taken the strategy to the same extreme as Zheijiang-based ReneSola, which claims to have 11 factories in operation around the world. In many countries, like Poland, ReneSola operates through contract manufacturers.
In announcing ReneSola’s quarterly results on Thursday, chief executive Xianshou Li said the company is aiming to take advantage of the solar “trade frictions” that are on the rise around the world – from the US to Europe to India to Australia.
“We continue to be well positioned compared to our peers with our OEM facilities ... and will look for opportunities to gain market share from resulting market changes,” says Li.
ReneSola also signaled that it is undertaking a major pivot towards the rooftop market, which it believes offers “more sustainable” growth in many markets, not to mention higher average selling prices. The company’s geographic diversity allows it to play an active role in retail markets in a growing number of countries.
By the end of 2014, retail market sales will account for “nearly half” of ReneSola’s revenues, the company says.
Having returned to a meagre profit in the final quarter of 2013, ReneSola stumbled back into unprofitability in the latest quarter– a poor performance which it blames on having taken its sole remaining polysilicon factory offline for maintenance.
That plant has since been returned to full – and profitable – production, according to ReneSola, which believes the plant will be an asset going forward, given the stabilizing price of polysilicon globally.
To date, ReneSola’s venture into polysilicon production has been disastrous, and last year it swallowed a massive impairment charge after announcing it would shutter a second, uncompetitive plant in Sichuan province.
ReneSola chalked up a net loss of $14.6m on revenues of $415m in the first quarter of 2014. The company shipped 521MW of modules during the quarter – a 60% gain on last year.
ReneSola – China’s fifth largest module supplier – expects to ship 480MW-500MW of modules in the second quarter, and 2.3GW-2.5GW in the whole of 2014.
ReneSola's New York-listed shares were down 3% at mid-day on Thursday, on a day when most of its peers were seeing strong gains in the markets.