Tariffs force Chinese panel makers to change tack

Yingli Green Energy Holding Co Ltd's stand at the Intersolar Europe trade show in Munich, Germany, on June 19. [Photo/China Daily]

Following the imposition of punitive tariffs by the EU on Chinese solar panel companies, many of them are retreating from the European market and turning their eyes to emerging markets.

Nevertheless, in Munich more than 200 Chinese companies have been attending Intersolar Europe, the world's largest exhibition and conference for the solar-power and allied industries, the second-largest exhibitor after Germany, said an organizer.

But according to a manager of Sunda Renewable Energy GmbH, based in China, three years ago the industry was at its apogee, and more than 600 Chinese companies attended the show then.

This year's five-day show and conference ended on June 21 and next year's show is due to be held in Beijing.

While big Chinese solar panel companies were in Munich for this year's event, many smaller ones failed to turn up.

Since the EU began its investigation of dumping by Chinese solar panel companies on June 6, just 13 days before the trade show, many of the small and medium-sized ones say they have encountered increasing difficulties doing business in Europe.

"If the EU imposes anti-dumping duties on Chinese companies, most of our export companies will not be able to sell a single product there," said Wang Donghong, publicity officer at Jingwei Electronic Material.

Her firm is one of the companies that has been absent in Munich. The company has made strenuous efforts to cut production costs and apply new and high technology to squeeze benefits from its factory since 2011, when the industry began to face challenges from destination countries such as the United States.

Because of adequate orders in the first half of the year, the company's factory ran at full capacity, but in the second half, production is likely to run at 70 percent of capacity at best, she said.

Rudy Wang, sales and marketing director of the Chinese PV cell and module manufacturer Econess Energy Co Ltd, said that while his company has not had a stand at the Munich show, he attended in an effort to solicit orders.

Econess Energy had already suffered from the EU action, he said. However, with 11.8 percent tariffs coming in, orders had risen suddenly, he said.

"Our European customers are afraid of tariffs of 47.6 percent, so they are buying extra before the higher tariff is imposed."

The bigger Chinese companies have begun to focus on other markets including Japan, South Africa and the domestic market.

The world's largest solar panel maker, Yingli Green Energy Holding Co Ltd, has reduced its sales target in Europe from last year's 60 percent of global revenue to 40 percent this year.

Another big company, JA Solar, said it, too, will reduce its sales target in Europe and place greater emphasis on Japan.

Dany Qian, the global branding director of JinKo Solar Co Ltd of Shanghai, said Europe accounted for about 40 percent of its revenue last year, but because of the EU tariffs it has halved that for 2013. The company will now concentrate on South Africa, she said.

Shanghai Aerospace Automobile Electromechanical Co Ltd is a State-owned solar panel company that was ranked in the top 10 in China last year, and started producing solar panels in 2000 as one of the first group PV producers in China.

Before the investigation, the company had around six employees in Germany, however now it has been cut down to two.

Organizers of Inter Solar Europe say China is expected to become the largest country in terms of solar panel installation this year, surpassing the US and Germany.