Swiss Solar Maker Slumps on Risk of German Plant Shutdown
(Bloomberg) — Swiss solar-panel maker Meyer Burger Technology AG fell the most on record in Zurich trading after saying it may shut one of Europe’s largest production sites and switch focus to the US.
Meyer Burger sank as much as 47%, the most since starting to trade in 2006, after flagging a loss for last year, and said it’ll make a decision on closing the unit in Freiberg, Germany, next month. It’s among European companies to suffer from plunging prices in the region after Chinese products flooded the market.
The “dumping” of imports means there’s “no fair market,” Chief Executive Officer Gunter Erfurt said Wednesday on a conference call.
Trade restrictions imposed by India and a US ban on Chinese panels suspected of being made with forced labor have led to the redirection of modules to Europe.
Meyer Burger said it’ll require financing of about CHF450 million ($522 million) until it’s cash-flow positive in 2025. The company forecast a 2023 loss before interest, taxes, depreciation and amortization of at least CHF126 million. It’s studying a rights offering, private placements and other equity-based funding.
The stock traded down 31% as of 4:06 p.m. local time.
“Meyer Burger shares are a high-risk investment, where a total loss cannot be ruled out,” Bernd Laux, an analyst at Zuercher Kantonalbank, said in a note.
Arizona Factory
The Freiberg plant, which opened less than three years ago and employs about 500 people, may close as early as April. The company is now looking to the US, where it has already secured 5.4 gigawatts of offtake agreements. It expects to ramp up a solar-module factory in Goodyear, Arizona, in the second quarter.
President Joe Biden’s Inflation Reduction Act has made America the “most attractive market,” Meyer Burger said.
“They make sure that companies can set up quickly,” Erfurt said on the call. “We are encouraged to grow very quickly. The customers of these products are also supported.”
The European Union has said it wants to prioritize home-grown clean tech, but less than 2% of demand for solar there is met by products from the region, with about 90% of components coming from China. The industry is waiting for policymakers to decide on support similar to the EU’s package for the struggling wind sector.
Despite current hurdles, Meyer Burger could expand its sales 10-fold from 2022 to 2026 if it’s helped by US and EU government incentives and by more offtake agreements, Bloomberg Intelligence said in a note.
The company is in discussions with the German Economy Ministry to receive export financing support for its US investment. The government is set to decide on steps to bolster the industry on Feb. 21.
“We’re in talks with Meyer Burger and we are aware of the difficult situation of this company and the German solar industry as a whole,” the ministry said, declining to provide more details. “We want to support the solar industry in Germany and Europe.”
Last week, the European Commission approved a €902 million ($980 million) aid package from the German government to Swedish electric-vehicle battery producer Northvolt AB to build a plant in the nation.
–With assistance from Allegra Catelli, Paula Doenecke, Blaise Robinson and Arne Delfs.
(Updates with further analyst comment in 12th paragraph.)
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