Suntech, Solarworld to Survive Solar Shakeout, Bank Sarasin Says

Suntech Power Holdings Co., First Solar Inc. and Solarworld AG (SWV) are among global solar-panel makers best positioned to survive consolidation in the industry, according to Bank Sarasin & Cie AG.

Companies that are internationally diversified and cover several stages of panel production have a “very good chance of emerging stronger,” the bank said in a report on its website, citing its study on the industry. “Small and uncompetitive companies which are inadequately financed will not survive.”

China’s Trina Solar Ltd. (TSL) and Yingli Green Energy Holding Co. also are well placed to weather a potential wave of mergers among solar manufacturers, the Basel, Switzerland-based bank said. Germany’s Conergy AG, Q-Cells SE (QCE) and Solar-Fabrik AG (SFX) are among those companies most under threat, it said.

Solar manufacturers are reeling from a surge in global competition as demand ebbs in Europe. Chinese producers have boosted output capacity amid an international price slump, which has tipped three U.S. solar companies including Solyndra LLC into bankruptcy this year.

Solar-Fabrik, a Freiburg-based maker of solar modules, shouldn’t be placed on the list of endangered companies, Chief Executive Officer Guenter Weinberger said today by telephone.

Raw-Material Costs

The producer is “small but healthy,” benefiting from a positive net cash position and generating earnings from its “core” business in the third quarter amid a “difficult market,” he said. Weinberger disagreed with Sarasin’s view that companies covering multiple production stages are best placed, saying recent declines in polysilicon, wafer and cell prices can aid those that make only modules, the end product.

Q-Cells, based in Thalheim, and Hamburg-based Conergy couldn’t immediately be reached for comment.

Sarasin said the “inevitable” consolidation will have a positive effect by improving growth prospects in the long run. The bank expects global demand to increase by an average of 18 percent a year through 2015 as sales climb in the U.S., China and Japan.

While the price decline is squeezing profit margins, it also means companies will “become competitive more quickly,” enabling them to “open new markets,” Q-Cells Chief Executive Officer Nedim Cen said Nov. 14.

To contact the reporter on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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