3 February 2006PlanetarkMantik Kusjanto and Anneli Palmen
Germany's SolarWorld has bought Shell Group's loss-making silicon solar operations for an undisclosed sum, making it the biggest player in the US solar energy market, it said on Thursday.
Shares of SolarWorld, which have risen about 430 percent over the past 12 months, rose to an all-time high of 230.90 euros, before closing up 17.4 percent at 218.85 euros.
Frank Asbeck, chief executive of solar energy company SolarWorld, told Reuters it expects 2006 revenues to rise by about 40 percent after it buys Shell's silicon-based solar operations, more than doubling its production capacities to 140 megawatts from 80.
Asbeck said the company had reached its 2005 sales and earnings targets. It has forecast 2005 sales to rise by more than 50 percent to "well over" 300 million euros ($362 million) and net profit to come in at more than 40 million euros.
SolarWorld said it would take over US Shell locations in Vancouver, Washington and Camarillo, California that manufacture solar silicon crystals, wafers, cells and modules.
Others locations being taken over include solar cells operation in Gelsenkirchen, Germany, sales companies in Munich, Germany, Singapore and South Africa and the research and development team focusing on silicon technology based in Munich.
The deal excludes Shell's Solar Rural business.
President George W. Bush said on Tuesday that the United States was addicted to oil from the Middle East and must find alternative energy sources, including solar energy, causing SolarWorld's shares to leap higher.
SolarWorld said the new capacity would make it the largest producer of solar power technology in the United States.
In a separate statement, Shell said it had sold the business because it wants to focus on next generation technologies like Copper Indium di-Selinide (CIS), which is not based on silicon.
The solar industry is facing a global shortage of silicon, for which it competes with semiconductor makers.
"Shell believes non-silicon based technologies such as CIS are more likely to become competitive with retail electricity in the coming years," the firm said.
It added it would explore the CIS technology with French glass maker Saint-Gobain.
CEO Asbeck said in the SolarWorld statement: "These operations will fit well within our portfolio and further strengthen our ability to meet the world's growing demand for solar energy alternatives."
"This lucky deal represents a focused approach of expanding capacity and presence in the most expanding solar markets worldwide," he added.
SOLAR SHARES SHINE
German solar stocks have risen sharply recently as investors bet that solar firms could benefit from US plans to be less dependent on oil and California's aim to be one of the world's largest producers of power generated from the sun's rays.
Shares of SolarWorld's rivals like Conergy, Q-Cells and Ersol have also profited.
German solar firms have been flocking to the Frankfurt stock market to raise funds for expansion.
The solar market currently supplies a fraction of 1 percent of the world's energy needs and is worth an estimated $7 billion annually. The industry may increase that proportion to 8 percent by 2030, according to the European Renewable Energy Council.
Given generous subsidies from some governments - notably Japan and Germany, the world's two biggest producers of solar power - demand has soared for the panels that harness energy from the sun to provide electricity without emitting carbon.
