Meyer Burger seeks to break free in the USA
Published: Wednesday, Jan 17th 2024, 17:01
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The ailing Swiss solar company Meyer Burger continues to make negative headlines. Now the production of solar modules in Europe is to be discontinued. The company sees its future in the USA.
Due to "serious losses" in solar module production in Europe, Meyer Burger is already planning to close its plant in Freiberg in eastern Germany, which is only three years old, the company announced on Wednesday. Due to Chinese dumping imports, the prices for solar modules have plummeted and the plant can therefore no longer be operated profitably.
Meyer Burger also complains that the EU is not sufficiently protecting the solar industry against highly subsidized Chinese competitors. With this unequal playing field, "fair competition" is no longer possible and withdrawal is the logical consequence.
The difficulties were also reflected in the operating result for the past financial year 2023. The operating loss before depreciation and amortization (EBITDA) is expected to be at least CHF 126 million, with sales of just CHF 135 million.
Decision in the second half of February
The lights are due to go out in Freiberg as early as the beginning of April. However, there is still a glimmer of hope for the approximately 500 employees and the solar location in Europe. Meyer Burger does not intend to make a final decision on the closure until the second half of February. If there are substantial improvements in the general conditions by then, the decision could still be reversed.
Two important political decisions in Germany will also be made during this period. In addition to the federal budget, the "solar package" for the expansion of solar energy is also to be passed in the German Bundestag.
A spokesman for the German Minister for Economic Affairs, Robert Habeck, explained that the German government was in talks with Meyer Burger in light of the impending plant closure. The ministry is very aware of the difficult situation of this company and the solar industry in Germany, he said. However, he could not provide any details about the talks. In general, the federal government wants to support the solar industry in Germany and Europe.
However, Meyer Burger boss Gunter Erfurt did not want to take part in speculation about the possible outcome of the political discussions. Under the current circumstances, the closure was unavoidable, he emphasized.
Lifeline USA
As the general conditions in Europe are clearly not right for Meyer Burger, the company wants to put all its eggs in the USA basket in future. Here, the industry is much better protected against dumping from China. There is also more support from the state.
Meyer Burger initiated its investments in the USA several years ago. Production at the new plant in Goodyear, Arizona, is set to start as planned in the second quarter of 2024. Production at the solar cell plant in Colorado Springs is also scheduled to start at the end of 2024.
The growth prospects in the USA are still intact or have even brightened further, CEO Erfurt emphasized. The company's books are well filled and some of the orders extend into 2030.
Shares slump
Despite the glimmer of hope in the USA, the news was not well received on the stock markets. Shares, which had already been hit hard recently, plummeted after the announcement. Analysts were even talking about the possibility of a total collapse.
The company also needs more money to expand its activities. The management currently estimates the capital requirement at around 450 million Swiss francs. In addition to loans, a capital increase is also on the cards, which will put additional pressure on the shares.
Three quarters of an hour before the close of trading, the shares are down around 30 percent at just over 9 centimes. This means that they have more than halved since the beginning of the year. Six months ago, the shares were still trading at more than 60 centimes.
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