Q-Cells on Track With Cost Cuts
Reporting a sequential rise in solar cell sales volumes of 87% in Q3, solar cell manufacturer Q-Cells detailed its progress on Q-Cells Reloaded, its program designed to cut manufacturing costs by ~25%. During the latest quarter, the company reached an agreement to cut 500 jobs beginning next month.
Aaron Hand, Editor-in-Chief -- PV Society, 11/12/2009
Q-Cells SE (Bitterfeld-Wolfen, Germany) is calling its reorganization efforts a success, implementing various cost-cutting measures throughout the latest quarter. The solar cell manufacturer released a report on its Q-Cells Reloaded program, along with Q3 revenue results, pointing to an 87% sequential rise in solar cell sales.
Q-Cells Reloaded is a program that the company announced in August — a comprehensive set of measures designed to cut costs and improve the company's performance, adjusting the organization to new market conditions and reducing the cost of cell production by ~25%. As an important first step for the plan, Q-Cells has reached an agreement to reduce the workforce by up to 500 production and administration employees beginning in December.
The reduced head count comes in part as a result of closing less profitable manufacturing lines. Q-Cells plans to shut down first-generation lines in Thalheim, which cost ~30% more to run than new lines in Malaysia. The cell manufacturer has already curbed the ramp-up of production in Malaysia to adjust to lower solar cell demand.
 |
|
Anton Milner, Q-Cells CEO |
"We are still producing solar cells on the new lines V and VI in Thalheim with a combined capacity of around 500 MWp," said CEO Anton Milner in the company's latest report. "Based on this model, approximately 300 MWp of new capacity will now be installed in Malaysia by the end of 2009." Q-Cells will be able to quickly ramp up further production in Malaysia as demand grows, he added.
The changes thus far have involved significant increased costs in the short term, but the company expects to see improved profits by early 2010 as a result of its changes. Meanwhile, the company saw increased demand for its solar cells in Q3, with sales volumes rising by 87% to 103 MWp for the quarter. An additional 21 MWp was delivered to the company's Q-Cells International project business.
Combined sales for the quarter were €184.1 million ($273.25M), a 30% increased over Q2 sales of €141.4 million ($209.87M). For the first nine months of 2009, sales totaled €550.3 million ($816.78), a drop of ~41% from the same period in 2008, credited primarily to "the drastic fall in prices on the international market for solar cells," the company said. Solar cell prices fell 20% in Q3 over the previous quarter.
Although demand began to recover seriously in mid-Q3, and Q4 is expected to see even more robust demand, Q-Cells does not expect to see an easing of cell pricing pressures. In fact, further pricing pressures are expected in 2010.
 |
|
A strong increase in solar cell shipments helped significantly to boost Q-Cells' Q3 sales by €42.7 million ($63.38) over the previous quarter. (Source: Q-Cells) |
Part of the cost considerations that Q-Cells has been tackling with is the reevaluation of agreements for wafer supply. In a statement released yesterday, multicrystalline solar wafer supplier LDK Solar Co. Ltd. (Xinyu City, China) said a Jiangxi court had issued a civil order freezing payments from guaranteeing banks, to keep them from returning $244.5M that Q-Cells had pre-paid almost two years ago, when wafer prices were considerably higher than they are now. Q-Cells, however, said that it expects to recover the full bank guarantee, and has begun the draw-down process.
Q-Cells Looks to Transform Its Business
03/11/2010Q-Cells Falls Prey to Weak Solar Market
07/14/2009Q-Cells to Cut Staff, Curtail Investments
08/13/2009
