In July, Q-Cells reported a 36.8% drop in solar product sales to €366.2 million and a negative EBIT of €47.6m for the first half of the year.
“The business performance shows how quickly and dramatically the markets have changed for us. In order to take rapid and comprehensive countermeasures, we have developed Q-Cells Reloaded, a three-tier set of measures with which we will adapt Q-Cells to market conditions which have structurally changed. The aim is to grow profitably at a sustainable rate again in the medium term,” says Anton Milner, CEO of Q-Cells.
“Of course we feel the pressure on prices that comes from overcapacities and the financing of major projects which remains sluggish because of the financial crisis.”
The measures include adjusting capacity and lowering costs; strengthening the technology position; and securing medium-term liquidity reserves.
Q-Cells also says it will engage more in systems integration and by building on the project business of Q-Cells International in the future.
Cutting jobs and costs
As part of the cost-cutting measures, Q-Cells plans to cut 500 jobs at the older generation production lines at Thalheim, where the cost structure lies around 30% of that usually accepted in international competition. Q-Cells predicts this will cut 25% of production costs.
Q-Cells will also from 2010 revisit silicon wafer supply agreements, which at the moment are set at much higher rates than the market price due to the oversupply of silicon wafers. The solar cell manufacturer says the agreements reached for 2009 now sets the company at a competitive disadvantage of €50m.
Based on a recent achievement of 18.3% efficiency for monocrystalline solar cells, Q-Cells says it expects to achieve 20% efficiency in its R&D lines by the end of 2011. Q-Cells will also concentrate on the thin-film companies Solibro (CIGS) and Calyx0 (CdTe).
In order to secure medium-term liquidity reserves, Q-Cells will reinforce its in-house financing. “All investment projects, especially those for 2010, will be reviewed again and the capital commitment in projects and stocks reduced,” the company says. The aim is to reduce outlay of up to €300m.
Milner says: “To steer Q-Cells safely through the crisis and give the company a long-term perspective at the Thalheim location, these measures, including a cut in personnel, are unavoidable.”