How South Korean Solar Panel Producers are taking the fight to the Chinese with Pricing, Brand and Distribution Power
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January 4, 2012South Korean Conglomerates LG,Samsung, Hyundai and Hanwha have made massive investments in solar energy production in the last couple of years.Encouraged by the Korean government to become a force in the Green Energy area in the future, Korean giant chaebols have invested in almost all areas of cleantech like Electric Vehicles, Wind Energy, Solar Energy, Energy Storage etc. While Western companies fall like flies in the face of the Chinese onslaught of super low pricing,Koreans are holding their own and want to take fight into the Chinese camp.
Note these South Korean companies have massive balance sheets and staying power and can outlast Chinese module companies like Suntech, Trina and Yingli despite Chinese government backing.Note only are LG and Samsung willing to match the Chinese on prices but are also using their huge global brand power and distribution strength to get a leg up. Note these companies already have a powerful distribution and marketing base in most countries. These can use this to subsidize their solar business unlike the Chinese companies which are being forced to reduce their marketing spend.
Taiwanese solar energy industry which could have challenged the Chinese are not being able to fight back because they don’t have the size or scale nor the integrated capability.T hey also lack the marketing heft of the Koreans.
South Korea brands in price war with China solar module makers
South Korea-based solar firms such as Samsung, Hyundai and LG have been eager to enter the solar market. The South Korea-based players have been quoting solar modules close to China-based peers to increase market share.
Industry sources noted that South Korea-based solar firms have been moving resources toward making own-brand solar modules while procuring solar cells from other firms.
The entry barriers for the solar module segment are relatively low compared to other segments along the supply chain. In addition, these South Korea-based firms have brand recognitions in consumer electronics, hence it is relatively easier to build own-brand solar products, said industry sources.
Korean Solar Companies
1) OCI Chemical – This Korean chemicals company has seen the most spectacular rise in the poly business and has ambitions of becoming the No.1 player in 2012 overtaking both Wacker and Hemlock.Primarily targeting the solar market,the Korean company has plans of reaching 62,000 tons of polysilicon capacity at its plant in South Korea.Formerly known as DC Chemicals it started production only 3-4 years ago in partnership with Sunpower.
2) Hyundai Heavy Industries – South Korea’s Hyundai Industries which is known more for its cars,is also making a big push into the Green Energy Space.Like its South Korean peers,Hyundai is also preferring to enter this space through Solar Energy.Hyundai has already established a 320 MW cell capacity which it plans to double to 600 MW by early 2011 which would make it the largest South Korean manufacturer.Hyundai had earlier bought solar cell equipment from Germany’s Centrotherm as far back as 2008 and had entered a long term contract with LDK Solar for buying solar wafers as raw material for its cell lines.Its sister company KCC has started a 6000 ton polysilicon plant in South Korea.It is in negotiations with the Hungarian government to set up a manufacturing base in that country to serve the European markets.It is also targeting the US market with partnerships with companies like Raser Technology and Matinee Energy.It is also planning to set up a 240 MW solar power plant in partnership with Matinee Energy and LG.
3) LG – Korean Electronics Giant has also firmed up its plan in the Solar Energy Space.It is already selling solar modules in the South Korean and European markets and plans to have a 240 MW capacity by 2010 end .This will be rapidly expanded to a Gigawatt capacity by 2012.
4) Samsung – Semiconductor and Electronics Giant Samsung is entering into production of polysilicon setting up a 10,000 ton plant in an equal JV with US Poly Producer MEMC.The plant will be set up in South Korea and will go onstream by 2013.Samsung had recently started production solar crystalline silicon solar panels which uses polysilicon as raw material.Samsung has made major plans to enter the Green Industry in a big way.It has signed a multi billion investment contract to build a huge offshore wind farm off Ontario and also plans to build solar plants.
5) POSCO – Posco,one of world’s largest steel producers has been trying to enter the solar market like its other Korean brethren.osco’s energy unit is planning to set up a massive 300 MW Solar Plant in the USA alongwith a US Developer Sustainable Energy Capital Partners (SECP),.Note LG had earlier also said that it was planning to set up a huge solar plant in the USA.
7) Nexolon – The company is based out of South Korea and is closely associated with the polysilicon giant OCI Chemcials.The company is primarily counting on the growth of South Korean companies like LG,Hanwha,Samsung for its growth.The company is involved in making solar wafers.
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