Korean Chaebol “Hanwha” Will Invest about USD 6bil in Solar Business to Become a Global Leading Solar Company
Reported by Japan Nihon Keizai Shimbun - September 7, 2010
Hanwha Group, Korean Chaebol, announced that it will increase its annual production capacity of PV cells up to 4GW by 2020. The total investment will be around $6 billion USD, and Hanwha might emerge as one of the biggest solar companies in the world, even after considering other solar companies’ expansion plans. Other major Korean companies, such as Samsung and Hyundai Heavy Industry, are also going to invest big money in the solar business. It won’t be long before Korea becomes a core power in the global solar business.
K.J. Hong, CEO of Hanwha Chemical, said in an interview with Nihon Keizai Shimbun that Hanwha Chemical started commercial production of PV cells at the beginning of this year with a 30MW annual production capacity in Ulsan, Korea and is supplying all of its products to domestic module makers. Studying the possibility of capacity expansion in Ulsan, Hanwha also acquired a 49.99% stake in Solarfun Power Holdings Co., Ltd, a vertically integrated Chinese solar company for $370million USD. By acquiring this share, Hanwha became a major solar company in the world and secured overseas markets such as Europe. Hanwha is planning to achieve vertical integration from up-stream, such as PV cells and module production, to down-stream, such as the construction of solar power plants. K.J. Hong said that Hanwha has usually been successful in the domestic market, but entering the solar business will be its initial advance into overseas markets.
The annual production capacities of major solar companies such as Suntech in China, First Solar in the U.S., and Sharp in Japan are around 1GW. Even if existing manufacturers are going to expand their production capacity on a large scale, Hanwha might be one of the top solar product manufacturers after it completes its expansion to 4GW by 2020. Many Korean companies are recently entering the solar business, which produces eco-friendly energy and has a high-growth potential in the future. Hyundai Heavy Industry is currently operating a 370MW PV cell line, LG is operating a 120MW PV cell line, and Samsung is testing a pilot line to participate in the solar business soon. Hyundai Heavy Industry is planning to expand its PV cell and module production capacity up to 600MW by the beginning of 2011, and plans another increase to 1GW by 2012. LG, which entered the solar business at the beginning of this year, will invest a total of $1 billion USD in the solar business by 2015, and is planning to establish a 1GW PV cell line by 2013. Samsung announced that the solar business was included in its 5 future main businesses, it will invest around $6 billion in this sector and expects to make $10 billion USD in sales from the solar business.
The solar business can typically improve a company’s profitability by increasing its production. Korean companies are newcomers in the solar business, but they are expected to be successful with aggressive investment. Furthermore, they expect a synergistic effect between their own competencies in other business such as semi-conductors, LCD, and chemical.
* Hanwha Group
Hanwha Group is Korea’s 16th largest conglomerate, having 50 affiliates. Originally established as an industrial explosives manufacturer in 1952, Hanwha Group has actively expanded its business through both organic growth and acquisitions. Hanwha is currently engaged in three core business areas: it is involved in manufacturing & construction, finance, and services & leisure. It is trying to become a global leading company, adapting its own business structure to expand into overseas markets.
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