SMA Solar says price pressure reason for closures
FRANKFURT/DUESSELDORF, Aug 11 (Reuters) – SMA Solar , Germany’s top solar power equipment maker, will shut down production sites in Denver and Cape Town, citing pricing pressure from Chinese rivals that seek to dump their products outside their collapsing home market.
“The acceleration of price pressure in the solar industry has been unexpectedly strong in recent weeks,” SMA Chief Executive Pierre-Pascal Urbon said in a statement on Thursday, citing reduced expansion targets for solar in China.
Having surpassed Germany as the world’s largest market for solar panels, China has set a national target for new commercial solar power capacity of 18.1 gigawatts (GW) for this year, below initial market expectations.
“The Chinese market is collapsing,” Urbon said, adding this would lead Asian companies to sell their products cheaply elsewhere, thereby putting pricing pressure on SMA Solar, the world’s largest maker of solar inverters.
SMA, whose shares were indicated 6 percent higher in pre-market trade, said the closure in Denver would mean the loss of around 280 full-time jobs. It did not say how many jobs would be affected by the shutdown of its site in Cape Town.
The group also released second-quarter results, saying it was now more challenging to reach the upper end of its target range for earnings before interest and tax (EBIT), which it confirmed at 80-120 million euros ($89-134 million) for 2016.
(Reporting by Christoph Steitz and Anneli Palmen; Editing by Joseph Nasr and Maria Sheahan)