China's Renesola back in the black

Renesola has become the latest China-based PV manufacturer to report a fourth-quarter return to profitability, in a vindication of sorts for its strategy to employ contract manufacturers in foreign markets for much of its module production.

Renesola, a wafer specialist until branching out into modules and polysilicon a few years ago, reported a slim profit of $800,000 in the fourth quarter, joining compatriots such as Trina, JA, Jinko and Canadian Solar in returning to profitability.

The New York-listed company lost $260m for the whole of 2013 on revenues of $1.5bn – its first time cracking the $1bn mark.

Renesola shipped 1.73GW of modules last year, making it one of the fastest growing suppliers in the world.

The company expects to ship 2.3GW-2.5GW of modules this year.

Chief executive Xianshou Li says the company now has about 1GW of module capacity under contract overseas, in places like Poland, South Africa, India, Malaysia, Turkey and – as Rechargerecently reported – Japan.

The capacity is, in many cases, outsourced to contract manufacturers.

While the economics of producing outside China remain dubious, Renesola’s strategy shields it from trade tariffs and may ingratiate it to governments in key emerging markets around the world.

“Our OEM strategy enables us to grow our business with minimum capital expenditure, and also provides us great flexibility in terms of capacity expansion as dictated by actual market conditions,” says Li.

Other Chinese players have followed suit, with JA recently announcing plans for a module-assembly plant in South Africa.

The geographic spread of Renesola’s production has left it far less dependent on the growing Chinese – and indeed Asian – market than many of its peers. Renesola notched up more than 40% of its sales last year in Europe and another 20% in the US.

Renesola produced 2,875 tonnes of polysilicon last year – far below its internal capacity – but says it will benefit in the year ahead as polysilicon prices stabilise.