August 29, 2011 / 12:15 PM / in 6 years

Yingli unlikely to add capacity in Europe

BERLIN (Reuters) - Chinese solar module maker Yingli is unlikely to add production capacity in Europe, the head of its European operations told Reuters, pointing to slowing growth in the region after cuts in subsidies.

“It would be difficult to look at capacity expansion in Europe,” Stuart Brannigan, also a member of Yingli’s management board, said on Monday on the sidelines of the Handelsblatt conference for renewable energy, adding acquiring European solar companies was “probably not on our agenda.”

Cutbacks in government support in Germany and Italy, the world’s two top markets for solar modules, have hit earnings in the sector, above all those in Europe, where Brannigan sees annual growth slowing to 5-10 percent.

Asian solar companies, however, have been less affected due to lower labor costs and better financing conditions.

Earlier this month, Yingli managed to beat Wall Street forecasts with its second-quarter earnings as it shipments jumped nearly 37 percent from the first quarter, and it stuck with its forecast that it would sell more than 1,700 megawatts (MW) of solar panels this year.

Sector analysts have pointed to Chinese solar companies as a driving force in the sector’s consolidation.

“The issue is: not everybody is a cost leader,” Brannigan said. He also said the current shake-out -- which earlier this month claimed Evergreen Solar, one of its most prominent victims -- could lead to insolvencies of second-tier and third-tier players in Asia.

Along with other Asian players trying to expand their market share in Europe, Yingli has been working hard to promote its brand on the continent, becoming an official sponsor of German football club Bayern Munich this year.

Reporting by Christoph Steitz

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