Leading German engineering firm Robert Bosch GmbH postponed its €520 million (RM2.05 billion) Penang solar panel plant’s construction, which would have been the company’s largest, due to cost pressures.
Solar energy division chief Siegfried Dais told the Frankfurter Allgemeine Zeitung yesterday that the company will need to “reorient” itself technically as it wanted to be among those making a profit from the industry.
“If you invest too early, you run the risk of possibly settling for a less advantageous technology path,” the German national daily quoted him as saying in an advance interview excerpt.
Construction of the plant in Batu Kawan, Penang, which has a capacity of 640MW per year, was scheduled to begin at the end of last year, with production to start in 2013.
Bosch’s decision to hold off on the fully-integrated manufacturing plant, which would have served its ASEAN operations, comes after the firm missed profitability targets last year as special charges ate into earnings.
This was despite an 8.8 per cent rise in full-year revenue to €51.4 billion (RM 202.63 billion).
Franz Fehrenbach, chief executive of the Stuttgart-based company, said last month Bosch booked an earnings charge of around €1 billion (RM3.94 billion) in 2011 due to up-front costs for its push into the fields of electric mobility and renewable energy, as well as currency fluctuations.
He also said that Bosch will streamline its cost base and lower its break-even point enough to offset any potential slump in revenue in the face of lingering global economic uncertainty.
Photovoltaic manufacturers such as Q-Cells, First Solar and Solarworld have been moving production to Asia for cost efficiency and to tap into the region’s growing market, which is expected to expand by 30 per cent annually.
However, prices for solar panels and raw materials fell last year as manufacturers in China ramped up production, leading to excess capacity after European governments cut back on subsidies.
Malaysia ranks fifth in the world in terms of solar megawatt output and the sector has been identified as a major growth area under the government’s Economic Transformation Programme (ETP).
Earmarked entry point projects (EPP) for the solar energy industry are expected to provide a gross national income (GNI) of RM13.9 billion and create 55,000 jobs.
