 Hanwha Chemical researchers work at a solar cell plant in Ulsan, 414 kilometers southeast of Seoul, in this file photo. The company spent $350 million to acquire a 49.99 percent stake in China’s Solarfun Power last year in an effort to expand its solar energy business worldwide. / Courtesy of Hanwha Group |
Hanwha enters solar energy market through active investments
By Jung Sung-ki From an explosives manufacturer to a large multi-profile business conglomerate in Korea, Hanwha Group has undergone remarkable development and growth through business diversification over the past half a century.
Hanwha led by Chairman Kim Seung-young, who took the group’s helm 30 years ago, is currently engaged in manufacturing and construction, finance, and the services and leisure industry.
Yet the group is preparing another leap forward to put its name on the global map with a focus on solar energy. The conglomerate has aggressively invested in the industry, which it calls a new growth engine for the future.
“The economic situation is not so good globally, but we may be able to turn crisis into opportunity,” the chairman said during a meeting with Minnesota Governor Mark Dayton in Seoul on Sep. 29 in talks over bilateral cooperation and potential investment regarding renewable energy, biosimilars and agricultural projects.
‘All in one’
The group’s bid to lead the global solar energy business accelerated in April when it announced plans to enter the solar energy business with the launch of venture firm Hanwha Solar Energy.
It is a core part of the group’s new direction.
Hanwha Chemical, a key affiliate of the group, plans to build a production facility in Yeosu, South Jeolla Province, early next year. The plant is expected to produce 10,000 tons of polysilicon annually after completion in 2013.
The group will invest 1 trillion won to build the facility and anticipates it will reap 500 billion won every year in revenue from the polysilicon production business from 2014.
The group aims to secure a business size of 1 gigawatt and power generation projects of 100 megawatts a year by 2015.
“By advancing to produce polysilicon, Hanwha Group could achieve a complete, vertical integration of solar-related businesses, from polysilicon to ingots, wafers, solar cells and modules,” a spokesman said. “This will allow the group to attain strong global competitiveness in the field.”
“Polysilicon is a key material in producing solar cells,” he said. “The ability to self-provide our demand for polysilicon will give us a key advantage in stability and cost competitiveness and make us less vulnerable to market cycles.”
Investment and acquisitions
In August last year, Hanwha Chemical acquired a 49.9 percent-stake in Shanghai-based solar products maker Solarfun Power Holdings. The name was subsequently changed to Hanwha SolarOne in December.
Hanwha SolarOne is responsible for manufacturing silicon ingots, wafers and photovoltaic cells and modules in China.
The company currently has a production capacity of 500 megawatts of solar cells and 900 megawatts of modules. It plans to expand its capacity to 1.3 gigawatts of cells and 1.5 gigawatts of modules by the end of this year.
It signed an investment memorandum of understanding (MOU) for a new 2 gigawatt solar cell production facility to be constructed in China’s Nantong Economic and Technological Development Zone in Jiangsu Province.
Last month, the firm announced it had secured $100 million to fund further expansion.
“We are pleased to expand our collaboration with Standard Chartered Bank and Korea Development Bank,” Jay Seo, chief financial officer of Hanwha SolarOne, said. “The new loan facility provides us with the capital resources to fund our continued business expansion, and we view it as a critical component of our financial plan.”
In an effort to further enhance the company’s technological competitiveness, Hanwha Chemical purchased 10 million shares (6.3 percent) of 1366 Technologies, a U.S. firm specializing in photovoltaic technology, for $5 million in October last year.
Headquartered in Boston, the American company develops direct wafer technology, which would eliminate the ingot process and allow the manufacturing of wafers directly from method polysilicon.
Hanwha’s investment and acquisition bids in the United States have continued, as the group’s American branch Hanwha International acquired shares in One Roof Energy, a provider of lease programs for photovoltaic systems in households, for $8 million. Earlier in the month, Hanwha Chemical also bought a stake in Crystal Solar, a photovoltaic venture, for $15 million.
Expansion of global networks
In an effort to strengthen its research and development (R&D) capacity and global networks, the group established Hanwha Solar America as a U.S. subsidiary last March. The subsidiary will set up an advanced photovoltaic (PV) technology R&D center in Silicon Valley.
Industry veteran Chris Eberspacher was named head of the R&D center to spearhead various solar businesses for Hanwha. Eberspacher has more than 25 years of experience in the solar industry.
“Hanwha is strategically well-positioned to be one of the leaders in the global PV industry," he said. "The PV industry is evolving quickly, and Hanwha intends to be a key leader in that evolution. Hanwha is moving aggressively to build a global network of world-class technology and product teams.
“We’re looking for the best and brightest; folks who can define a path for the continuing transformation of solar to large-volume, grid-parity impact as a key part of a diversified sustainable energy technology portfolio," he said.
Hanwha recently completed construction of a solar power plant in Italy. The facility is a 6 megawatt power plant in a solar power complex in the northern part of the country.
