(In 13th paragraph, corrects spelling to Dunayskaya, from
By Georgina Prodhan
VIENNA Oct 26 Solar parks developer Activ Solar
is on the lookout for assets from German solar firms that are in
distress as a result of falling government subsidies and cheap
competition from Asia, the company's chief executive told
Vienna-based Activ Solar has built some of the world's
biggest solar farms in Ukraine and also makes polysilicon, the
basic material of solar cells, but so far has had little
interest in manufacturing panels or modules itself.
However, new legislation due to come into force in 2014 in
Ukraine, Activ Solar's core market, may force it to use more
locally sourced content, which could mean manufacturing modules
itself as there are no other large solar companies in Ukraine.
Sound German companies suffering from overexposure to
Germany and Italy could also be of interest if they have
state-of-the-art technology that could be exported abroad to
help Activ Solar establish itself in new markets, Kaveh Ertefai
"This is an opportune time to look at acquisitions and we're
certainly pushing very hard to build on our execution
capabilities. Acquisition could certainly be a fast track way of
doing this," he said in an interview this week.
"Some of these companies are in good shape but just because
Germany and Italy accounted for 60 percent of the market last
year they've been caught out by austerity programmes and subsidy
cuts," he added.
Falling government subsidies for solar power and the
emergence of strong Asian solar players has caused an oversupply
of cells and a shakeout that has already forced some of the
industry's biggest names out of the market.
Germany's Q-Cells, once the world's largest maker
of solar cells, had to file for insolvency in April and has
since been bought by South Korea's Hanwha.
According to a recent report by Greentech Media's GTM
Research, overcapacity in the solar industry is likely to cause
at least 180 panel makers to go bust or be acquired by 2015.
GTM identified Germany's Solarworld and Conergy
along with Spain's Isofoton and Solaria Energia y
Medio Ambiente as possible buyout targets.
Solar development companies that could be attractive for
their low exposure to commodified manufacturing include Phoenix
Solar, Vogt Group and S.A.G. Solarstrom.
Activ Solar is majority-owned by Christian Dries, owner of
Austrian aviation firm Diamond Aircraft Industries, with the
rest owned by Activ Solar's management.
The company uses project financing to build its
utility-scale solar plants -- it has just completed construction
of its sixth Ukrainian plant, a 43 megawatt (MW) plant in
Dunayskaya Odessa -- and sells them on to investors.
Ukraine has been a natural base for Activ Solar to build its
business following its acquisition of the Soviet-era PJSC
polysilicon production plant in Zaporozye in 2008.
In addition, CEO Ertefai has political connections through
his father-in-law, lawmaker Serhiy Klyuyev. Ukrainian incentives
for developing solar energy are generous, and the country is
keen to reduce its dependence on Russia for gas.
But financing costs are high due to Ukraine's political
risk, and uncertainty about the future implementation of energy
policy is heightened by parliamentary elections this weekend.
Activ Solar wants to diversify into new markets including
the United States, Chile, the Middle East and Morocco. Then the
company could be ready for a public listing, Ertefai said.
"We've got quite a bit to do before we can offer something
that's really a slam dunk for investors. I don't really see a
window for at least 3-5 years," he said.
(Editing by Keiron Henderson)