Subscribe free to our newsletters via your
. Solar Energy News .

China solar giant Suntech falls back to Earth
by Staff Writers
Shanghai (AFP) March 20, 2013

China's Suntech reached its zenith as the world's largest solar panel producer, but has plunged to the nadir of financial distress in just a year, highlighting the woes of the industry it shaped.

The New York-listed company on Wednesday said its main subsidiary was facing bankruptcy and would be reorganised if the court accepted a petition by Chinese banks.

Oversupply as Chinese producers flooded the global market and trade disputes over alleged Chinese dumping caused a sudden and spectacular reversal of fortunes for Suntech, which last week defaulted on repayments for a $541 million bond issue.

The board ousted the company's renowned founder just days ago, after 12 years in which he led it from nothing to world market domination and then to the edge of ruin, leaving it scrambling to secure new funding and hold creditors at bay.

The global solar industry has been burned by the economic slowdown in Europe and the United States, together with weak prices blamed on Chinese companies which sought to build market share by undercutting competitors.

The European Union and United States last year targeted Suntech and other Chinese solar panel and cell makers, accusing them of selling their products at below cost and receiving "unfair" government subsidies.

Suntech, a private sector company, denied the allegations but made no secret of its aim to keep prices at rock bottom, which it said made solar energy available to more people.

Analysts said Suntech's business model, deliberately pushing down prices to capture larger market share despite narrower profit margins, contained the seeds of its own destruction.

"What (Suntech) has done is increase supply to the market so much, that they really almost can't sell anything at a profit now," said Ben Cavender, associate principal of China Market Research Group (CMR) in Shanghai.

Suntech, headquartered in China's eastern city of Wuxi, recorded a net loss of $1.0 billion in 2011, from a profit of $237 million in 2010, according to company filings. The firm has yet to report financial results for 2012.

Once an investors' darling, its New York-listed shares have plunged from a high of $90.00 in early 2008. They closed down 7.81 percent at $0.59 in New York on Tuesday.

"It is going to be difficult for them going forward," Cavender added. "You might end up seeing a very different company down the road."

Suntech said earlier this month it would shut a manufacturing plant in the United States in a bid to "rationalise" production capacity.

Analysts said Suntech faced a problem common to Chinese private firms, growing rapidly in the country's economic boom but becoming unwieldy and unmanageable as it turned into a vast corporation.

"Suntech, as a private firm, went too fast in its expansion," said Liu Wenping, a partner in Shanghai-based solar investment consulting firm Sapphire Capital.

"The founder, with the role of scientist-entrepreneur, didn't have the experience to manage such a big company with tens of thousands of workers."

Suntech's founder Shi Zhengrong -- listed as one of China's richest people by the independent Hurun Report last year, worth $476 million -- was ousted as chairman earlier this month. He called the move "misconceived and unlawful" in a statement, vowing further action.

The debt default and bankruptcy could cause foreign investors to sour further on China, after a string of accounting scandals involving Chinese firms listed in the United States and other overseas markets, analysts said.

US equipment giant Caterpillar recently revealed that it had found fake accounts at a Chinese firm it acquired for more than $650 million last year, in another cautionary tale for foreign investors in the hugely promising market.

"Looking at a Chinese company as a potential investment, you really have to be a little more cautious... and decide whether the investment looks as good as it does on paper," said Cavender of CMR.


Related Links
All About Solar Energy at

Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks DiggDigg RedditReddit GoogleGoogle

Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News

PermaCity First to Join Program Aiming to Accelerate Solar PV Projects
Secaucus NJ (SPX) Mar 20, 2013
Panasonic Eco Solutions North America (Panasonic) and Coronal Management, LLC (Coronal) have announced that PermaCity Solar, located in Los Angeles, is the first charter member to join a new solar power project Alliance Program launched by the two companies. PermaCity is a full-service solar energy company that works with customers to provide customized solutions from development and desig ... read more

Microalgae could be a profitable source of biodiesel

Researchers building stronger, greener concrete with biofuel byproducts

Biobatteries catch breath

Biodiesel algae: Starvation diets damage health

Digital 'talking head' speaks for computer

Google buys machine learning startup

Videoconference robot Beam walks the walk at SXSW

An Internet for robots

Davey lauds, warns Scotland on renewables

Uruguay deal boosts S. America wind power

Huge wind farm turbine snaps in Japan

Court ruling halts British wind farm

Man creates car that runs on liquid air

Greener cars could slash US pollution by 2050: study

Volkswagen eyes Chinese growth after record profits

Russian dashcams digital guardian angels for drivers

Transportation Study Reveals Deep Cuts to Petroleum Use and Carbon Emissions

Oil prices mixed in Asia, China manufacturing picks up

Alloy developed at Sandia has potential for electronics in wells

PetroChina says 2012 net profit falls 13%

Cooling systems restored at Fukushima reactors: TEPCO

Rat linked to outage at Fukushima atomic plant

Uranium mine workers in Niger stage 'indefinite' strike

India a market for nuclear power suppliers

India is fourth largest energy consumer

'Earth Hour' evolves into springboard for wider action

The household carbon emission per capita in Northwestern China is only 2.05 tons CO2 per year

Court battle looms over Chile power plant

Disney invests in Peru to prevent deforestation

Logging debris gives newly planted Douglas-fir forests a leg-up

Logging debris gives newly planted Douglas-fir forests a leg-up

Are tropical forests resilient to global warming?

The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement