2013-11-11
Ms. Zhuo Yujiao, Executive Vice President of Tongwei Group, recently received an exclusive interview, and expressed her views on solar PV market and Tongwei’s strategic position in the PV sector.
Prospect for the industry
With energy demand continually increasing, along with the need for new and clean energy sources, solar energy will definitely be an important part of the future energy mix. PV solar is poised to soon become an important mainstream source of energy. We believe that PV solar will rapidly become a vital source of energy, particularly for meeting peak demand and energy security needs. Additionally, authorities are working to boost the domestic photovoltaic industry by launching a variety of supportive policies. The general goal of the policies is to expand domestic demand, promote company mergers and encourage industrial innovation. In the first half of 2013, over 30% of China’s PV products are consumed domestically. According to the policies, in 2015, China’s annual installed capacity increase will reach 10GW, and the total installed capacity will exceed 35 GW.
In spite of the current downturn with slumping demand and declining prices, the future of the industry is still sunny. Solar energy will make up 1 percent of word’s total electricity generation in 2020, and it will account for 20 percent of the total in 2040. Accordingly, the CAGR of global PV products in 10 years will be 25%-30%. Currently, China’s solar cell and module production accounts for 2/3 of the world’s total.
PV business alignment and optimization
Tongwei continues to invest in order to prepare the company for the future by aligning and optimizing its PV business. Yongxiang produces polysilicon with the lowest carbon footprint, utilizing the lowest amount of energy to do so – the Yongxiang method - within a closed loop process that contains and recycles the chemicals used in the process. Additionally, on 11 September 2013, Tongwei Group won a tender for 100% stake in the former subsidiary of LDK Solar based in Hefei. As one of the largest acquisitions in the history of solar PV manufacturing, the acquisition is significant because it enables Tongwei to grow into solar-cell and module manufacturing, allowing the company to make solar cells utilizing its own polysilicon. It also provides Tongwei a cost advantage over rivals. The official completion and commissioning of TW Solar (Hefei) put Tongwei in a position of strength with an integrated chain of operations that stretch from silicon, wafer, solar cell, module to PV power generation. The operation of Tongwei Solar (Hefei) would unlock a new era of growth and performance. Currently at the downstream, the company is constructing a 20 MW power plant in Qiemo, Xinjiang.
Strategic positioning
While we are expanding our core businesses of agriculture and new energy, we seek to leverage the market insights that we gain through our operations by actively managing our physical and financial positions. We attach great importance to risk management. Engaging in the hedging of risk exposures and anticipating market developments are critical to protect and enhance our return. Instead of simply going after speed, we keep our business at appropriate scale.
Clean energy has become the inevitable choice for human civilization development. Solar PV generation is and will become the must choice of mainstream clean energy, as well as the crucial support and guarantee of China and the world’s economic and social sustainable development. Today, Tongwei is in a position of strength. With its network of efficient facilities, integrated chain of operations, diversified product portfolio, excellent risk management, talented team and strong entrepreneurial culture, Tongwei is expanding in key geographies. Moving forward, our ongoing PV business will serve as a stronger, more appropriately scaled complement to our core agribusiness operation.