Suntech Power Holdings Co. Ltd. in collaboration with Bangchak recently brought South East Asia's largest silicon photovoltaic 44 megawatt (“MW”) power plant online. The project, known as Sunny Bangchak, is located in Bang Pa-In, Ayutthaya, which is forty kilometers away from Bangkok, Thailand.
Bangchak Public Petroleum Co. Ltd (“BCP”) is the owner of the PV project. The project was constructed by engineering, procurement and construction partner Solartron Public Co., Ltd. It utilizes Suntech’s high performance solar panels. Suntech’s high-efficiency solar panels are best suitable for Thailand's hot and humid climate.
Besides minimizing the need to import about 40,000 tons of coal, the plant will offset 32,000 tons of CO2 emissions, which is almost equal to removing 9,000 cars from the roads or planting of 3,000,000 trees. The project will help Thailand to meet 20% of its total energy consumption with renewable sources by 2022.
The Thai oil company BCP runs the business of refining crude oil from the Middle East, the Far East as well as from domestic sources. Bangchak is dedicated to the growth of renewable energy technologies.
Suntech Power Holdings produces industry-leading solar products for residential, commercial, industrial, and utility applications. The company aims to provide reliable access to nature's cleanest and most abundant energy source to everyone. Recently, Suntech Power entered into a contract with Solarstrom AG. As per the terms of the contract, the former will deliver approximately 26 MW of monocrystalline and polycrystalline solar panels to the latter.
Suntech Power is one of the largest producers of PV solar modules in the world. Its consistent focus on tapping new markets has led to lower dependancy on its prime markets of Germany, Greece, the Czech Republic, the Benelux Region and Italy. As a result, although absolute megawatts shipped to those markets rose, the proportion of total sales gradually spread across new markets like Israel, Thailand and Australia. Moreover, its predominantly China-focused manufacturing base gives it a distinct cost advantage compared to its U.S. and European peers.
Besides, helping the companies in providing clean energy, the company is focusing on reducing its production cost and operating expenses. A few days back, the company had closed a portion of its solar cell production capacity in Wuxi, China for the time being. Excluding non-recurring items, the company intends to reduce its operating expenses by 20% year over year. Also, the company targets to create a sustainable business model as well as return to positive operating cash flow in 2013 with the help of these attempts.
Other positive factors include ongoing expansion programs, higher conversion efficiency through its Pluto technology-enabled modules, China’s subsidy program and improving operating efficiencies. However, we remain on the sidelines due to tepid module demand in Europe, rising competition, volatile euro and the financial stability of its customers. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.
The company mainly competes with First Solar Inc. (FSLR - Analyst Report) and ReneSola Ltd. (SOL - Analyst Report).