Korea’s Hanwha to rescue Q-Cells from insolvency

Korea’s Hanwha Group will take over Germany’s ailing Q-Cells, which entered into insolvency proceedings last April. Hanwha will retain most of the workforce at Q-Cells Thalheim research and production site in Germany, as well as all of the company’s Malaysian subsidiary. The official announcement came in a press release from Q-Cell released on 26 August, but rumours had been circulating about the buyout from a week prior.

Q-Cells, like a number of other European, North American, Australian and even Chinese solar panel manufacturers, began to struggle financially in the wake of a huge increase in the number of cheaper solar panels being manufactured in China. Although the company’s name itself expresses its dedication to producing high-end products (the “Q” stands for “quality”) and its brand is widely recognised in the solar photovoltaics (PV) industry, emphasis on quality and a strong brand name were not sufficient to stave off insolvency in an increasingly competitive market. An oversupply of solar panel stock is anticipated to continue for 3 more years unless China’s response–upping its solar system installation target to 21GW–manages to absorb some of the surplus.

Although no doubt upsetting to employees facing possible redundancy, the news of Q-Cells’ purchase by Hanwha will come as a relief both to installers who deal in their products as well as those whose solar systems are fitted out with Q-Cells solar panels and are still under warranty. The Hanwha Group is a global conglomerate with involvement in a wide range of industries, including manufacturing, construction, and finance. This diversification of business activities could theoretically allow Hanwha to ride out tough times in one industry whilst still performing well in others. Bosch and LG are two examples of other global companies that produce solar panels but which also have a diverse portfolio of activities.

It is widely thought that the next 3 years will be a period of consolidation for the relatively nascent global solar panel manufacturing industry, and that those who survive will come out stronger on the other side. Even Chinese solar giants such as Suntech and LDK have been suffering, posting large losses in the turmoil. Some are even concerned that Suntech–the world’s largest manufacturer of solar panels–may go under in the wake or a recent scandal in which it was revealed that they may have been defrauded to the tune of over 500 million Euros.

© 2012 Solar Choice Pty Ltd

James Martin II