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Another Indian company plans a big manufacturing facility in Andhra Pradesh however the proof of the pudding is in the eating

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Solar Expansion plans in India

Indian companies are aggressively expanding into the solar manufacturing space, as India is all set to become the 4th largest market in the next 2 years for solar panels. While adaniexisting players are expanding their existing lines, some new companies are trying to enter the area in JV with foreign partners who can bring the requisite skills and expertise. The Adani Group had planned a massive billion dollar expansion with SunEdison, but that looks to be a dodo project with no hopes of revival. Even before the present problems being faced by SunEdison, the JV was said to be in a soup as there was no clarity on funding and valuation. Many foreign manufacturers such as JA Solar, Trina Solar, Canadian Solar etc. have announced their intention to spend millions of dollars to set up a giant factories particularly in AP, but none have seen much progress. In comparison, these companies have rapidly set up facilities in Thailand and Malaysia.

Now Essel Infrastrucure which is part of the large media conglomerate the Essel Group has announced a MOU to set up a $2 billion manufacturing plant in AP. This again seems to be built on air with no concrete details on plant phasing, investment funding sources etc. All these make good paper headlines, but have stopped being material to forecasts. In state investment jamborees, these MOUs are signed by the companies to make the state governments look good, but are not even worth the paper they are written on. For example the Adani SunEdison JV was announced during the Gujarat investment summit with much fanfare, but one year down the line not a single brick has been laid by either of these companies.

Essel Infra has almost zero experience in solar manufacturing, in fact it has almost negligible presence in manufacturing but still plans to set up a $2 billion plant. Its JV partneressel is the GCL group, which is the world’s largest manufacturer of polysilicon and wafers. Though this company has impressive credentials in the solar area, it does not have much experience in solar cell/panel production or marketing. GCL is also capital constrained and was recently prevented by shareholders from selling its crown jewels (solar wafer manufacturing) to an entity which has its CEO as an owner. This massive investment looks unlikely, given the low margins in the solar manufacturing business and the not so impressive balance sheets of these JV partners.

These 2 companies also are planning to set up a $9 billion smart green industrial park in the state. Again seems that these are merely words rather than a serious business plan.

Subhash Chandra-led Essel Infraprojects and China-based Golden Concord Holdings (GCL) Consortium today inked an MoU with Andhra Pradesh government for setting up an integrated solar equipment manufacturing facility in the state with an investment of USD 2 billion. The Consortium also signed another Memorandum of Understanding (MoU) with the government for setting up a Smart Industrial Park in the State, a statement from Essel Group said.
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PG

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in

One Response so far | Have Your Say!

  1. Radhakrishnan Mundoli

    These magnanimous declarations makes a bad name for the sector. My be the govt should ask 10% earnest money deposit (forfeit able) to be made from such parties before they make such declarations. Either the govt will make money or such declarations will stop