Germany's Bosch to quit PV game
German engineering giant Robert Bosch says it will cut its losses and walk away from the solar-energy business, affecting more than 3,000 workers, and putting an exclamation point on one of the most jarring weeks in the PV industry’s history.
Bosch’s announcement was blunt and comprehensive, leaving no room for doubt about any of its PV activities.
Among the measures it intends to take are binning a planned 640MW PV factory in Malaysia, which was postponed last year; selling its stake in loss-making German PV manufacturer aleo solar; offloading its module plant in France; and immediately scrapping all solar-related development and marketing activities.
The €50bn ($64.6bn) group, among the world's largest suppliers of automotive parts, announced the closure of thin-film PV production in Germany last autumn.
Although expected by many in the solar industry, Bosch’s solar exit still ranks among the most dramatic developments of the global PV shake-out to date, and was described by Franz Fehrenbach, chairman of the supervisory board, as “the most painful decision I’ve ever had to make in my career”.
Earlier this week China's Suntech, the world's largest module supplier until 2011, said that its core manufacturing subsidiary is headed for insolvency proceedings.
Bosch's announcement marks a stunning defeat for a global engineering bellwether, with Fehrenbach last year proclaiming Bosch's intention to stick it out in the solar game beyond the current consolidation phase.
Bosch’s 2008 buy-into to the industry, via its €1.1bn acquisition of Germany’s ersol, was hailed as further evidence that PV was moving out of the fringes and into the corridors of mainstream industry. In a parallel with the wind sector, experts have repeatedly touted the many lessons and resources the automobile industry has to offer PV.
But over the past four years Bosch has lost €2.4bn on its solar division – including €1bn last year – and the losses will continue to pile up as it winds down its PV activities.
The company hopes to sell some of its manufacturing assets, but in the absence of a sale it will pull the plug on all production by early 2014.
In a separate statement, aleo solar – in which Bosch holds a more than 90% stake – says it has been informed by its parent company that it will remain financed until March 2014.
But a number of factors have complicated the decision, including its ongoing bullishness about the prospects for solar energy and the huge amount of solar-related workers on its books.
“Over recent months, Bosch has comprehensively examined every aspect of its solar business,” says chairman of the board Volkmar Denner. “We have considered the latest technological advances, cost-reduction potential, and strategic realignment.”
Denner acknowledges that Bosch has been in talks with potential partners – rumoured to be based in Asia.
“However, none of these possibilities resulted in a solution for the solar division that would be economically viable over the long term,” Denner says.
He insists that Bosch’s decision to enter the solar game was not flawed, saying that the “drastic changes in the market, particularly the rapid increase in capacity in China, simply couldn’t be foreseen”.