Trina Solar snaps up China's Hubei
Trina Solar has struck its second deal in three months to acquire a lower-tier Chinese PV company, underscoring both the consolidation pressure gripping China’s solar industry and the newfound urgency among profitable players to expand production.
The deal will see Trina buying a 51% stake in Hubei Hongyuan PV Science and Technology Co., a PV cell maker, with current owner Shenzhen S.C. New Energy Technology Corporation – a maker of PV production equipment – holding onto the remaining 49%.
Hubei Hongyuan will change its name to Hubei Trina Solar, and will beef up its cell capacity to 420MW by mid-2014.
The deal follows Trina’s announcement in November that it would acquire a module factory in Changzhou from a different lower-tier player that will be ramped up to 500MW.
Last month JinkoSolar bought a bankrupt lower-tier Chinese PV manufacturer with capacities of 500MW for wafers and cells, and another 100MW for modules.
It is unclear to what extent China’s solar champions are being pressured to buy such companies, and to what extent they simply see an opportunity to expand their production capacities cheaply.
Neither Hubei Hongyuan nor parent company Shenzhen S.C. made the list of 109 PV companies that remain eligible for ongoing domestic support measures – including favourable treatment by banks – published last month by Beijing.
Trina chief executive Jifan Gao says the company remains “deeply committed to supporting the healthy, long-term growth of China’s solar industry”.
Trina – which is China’s second largest PV group after Yingli Solar, and returned to profitability last year – says the acquisitions will better position it to “benefit from growing global demand”.
“We continue to focus on executing our growth strategy of building an asset-light company and delivering increased returns on investment capital,” says Gao.