Meyer Burger looks to close German solar module plant
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Meyer Burger is blaming the global trade war for a plan to close its solar module plant in Germany after major losses in its first year.
Meyer Burger in Switzerland plans to focus on its factory in the US where there is support from the US government, and plans to close its module factory in Freiburg in April. The cell plant in Thalheim (Bitterfeld-Wolfen) will continue.
“Meyer Burger presented a plan with which we want to overcome the serious effects of market distortions in Europe,” said Gunter Erfurt, CEO of Meyer Burger.
This follows a loss of CHF 126m ($146m, €134m) on sales of CHF 135m ($156m,€144m) leaving the company just CHF 150m in cash for the 2023 financial year. It is looking to raise CHF450m.
This was the result of a sharp increase in Chinese production excess capacity, as well as trade restrictions imposed by India and the US, led to significant oversupply and unprecedented distortion in the European solar market in 2023 he said.
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The company had changed direction to be use its PV manufacturing equipment to make its own cells and sell its own panels, and had been building up a network of installers in Europe.
The company is in advanced talks with the German Federal Ministry for Economic Affairs and Climate Protection regarding export financing backed by Euler Hermes and continues to pursue additional financing options, including 45X and US Department of Energy loans. It is also considering raising equity capital, primarily to finance the construction of cell and module plants in the USA and strategic partnerships to accelerate the commercialization of the technology.
“As Meyer Burger advances the growth of its US business, supported by leading research and development at its European sites and manufacturing equipment manufactured there, the company is preparing to close module production in Germany. In the event of a lack of political measures to create fair competitive conditions, the current, unsustainable losses should be eliminated in this way. Cell production in Germany will continue to support the ramp-up of module production in the USA,” he said.
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Meyer Burger is the only western provider of highly efficient heterojunction technology, with purchase contracts for 5.4GW in the US. However other European solar panel assembly plants are coming online, notably in Italy. SolarWatt in Dresden has installed 10m of its panels across Europe.
The closure of the Freiburg plant would affect around 500 employees. A final decision would have to be made by the second half of February 2024. In the event of a closure, essential employees in engineering, technology, supply chain management and certain other critical functions at the Freiberg production site would be given the opportunity to transfer their contracts to other Meyer Burger companies.
This is “unless sufficient measures are taken to create fair competitive conditions in Europe, such as through resilience measures,” said the company, in a clear message to the EU and German funding authorities.
Mechanical engineering and the R&D locations in Switzerland and Germany would not be affected.
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“In the USA – due to the industrial policy there – we can fully exploit our leading technology position, which leads to considerable interest from potential partners. With an order backlog of 5.4 gigawatts under offtake agreements and the possibility of achieving EBITDA of around CHF 250 million in 2026, we are positioned to build a profitable business and therefore provide our shareholders with a positive outlook. The expansion of the US business is currently progressing as planned and the commissioning of our module production in Goodyear is expected to start in the second quarter of 2024,” said Erfurt.
Meyer Burger restructuring
- Plasma maker Muegge sold
- Dutch industrial inkjet business sold
- Swiss wafer business sold
- Solar Systems business sold
Based on current forecasts, Meyer Burger requires financing of approximately CHF 450 million until the company achieves positive cash flow. This date is expected to be in 2025, assuming the ramp-up of US activities goes according to plan. Meyer Burger expects the potential restructuring costs to be financed through the sale of its own inventory of 350MW of modules at the plant.