Cnooc Ltd. (883)’s battery unit invested $300 million in a venture with Spanish solar power company Isofoton SA to develop photovoltaic plants across Asia.
Cnooc, China’s biggest offshore energy explorer, will take a 51 percent stake in the Tianjin, China-based joint venture company through its Tianjin Lishen Battery Co. The entity will set up a 150-megawatt manufacturing plant and build power plants, said Isofoton Chief Executive Officer Angel Luis Serrano. Isofoton will own 49 percent and supply the technology.
Isofoton, which furnished solar panels for the Spanish prime minister’s official residence in 2007, is building a business developing plants and shifting its manufacturing to China after government subsidy cuts in 2009 gutted sales of its panel unit in Spain. Photovoltaic equipment makers are pinning their hopes on orders from China as Germany, the biggest market, reins in support for the industry.
“We need to be in China not as a way to cut costs as the market is understood now but because there will be a real market,” Serrano said at the company’s Madrid office Jan. 31. “It’s the right moment to be there.”
Solar power equipment makers have seen their margins crushed over the past year as falling costs cut panel prices in half. That depressed margins across the industry and prompted 15 of the 17 members of Bloomberg Large Solar Index to post quarterly losses in their most recent earnings statements. The index lost as much as 76 percent last year.
Sales Slump
Isofoton’s sales in 2011 were little changed from the 123 million euros the company reported in 2010, Serrano said. Profit likely will be less than 5 million euros, compared with 10 million euros in the previous year.
The deal provides “financing for our pipeline of 1,000 megawatts in projects,” Serrano said. “The technology will be supplied from either our plant in Malaga or the one we are planning in the U.S.”
Isofoton was founded in 1981 as a spin-off from Madrid University and has developed projects in more than 60 countries. It’s working on a 100 megawatt panel plant in Ohio.
Its sales slumped 83 percent and losses almost tripled to 226 million euros in 2009. It was taken over by Affirma Energy Engineering & Technology SL in 2010 with Samsung (005930) Group.
Serrano said China may install 15 gigawatts of panels over the next three years, and Isofoton may build its own solar panel factory in the world’s second-biggest economy next year.
Suntech Power Holdings (STP) Co. CEO Zhengrong Shi last week estimated China may add 4 gigawatts or more of panels in 2012, and Trina Solar Ltd. (TSL) CEO Jifan Gao expects 5 gigawatts. That compares with about 2.2 gigawatts installed there in 2011.
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