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Suntech takeover opens door to Japan

By Yin Ping (China Daily)
Updated: 2006-08-04 11:05

SHANGHAI: In a bid to penetrate Japan, the world's largest solar power market, Suntech Solar Holdings is to spend up to US$300 million buying Tokyo-based manufacturer MSK.

New York-listed Suntech, China's leading solar energy producer, is to acquire a 67 per cent stake in MSK for US$107 million by the end of the third quarter, it announced yesterday.

All remaining MSK stocks will be bought by the end of next year for a total of between US$53 million and US$193 million.

The takeover, analysts say, is a sign of Suntech's strategy to expand abroad to increase its supply of solar wafers, key materials that are in short supply and vital in the manufacturing of solar cells and panels.

MSK is the largest solar panel producer in Japan and has 20 years experience in the design and application of solar panels mounted on buildings to generate electricity.

Cui Rongqiang, director of the Solar Energy Research Institute of Shanghai Jiaotong University, told China Daily that the takeover would help Suntech explore the Japanese market.

"Suntech's core competence lies in making solar cells while MSK is good at integrating the cells into panels," he said.

The buyout will not only strengthen Suntech's solar panel production, but is also likely to spark growth in the export of its cells to the Japanese market.

"Japan is the world's biggest and the most mature solar market. Its solar industry is entirely market-oriented. There are no government subsidies," Cui said.

According to one report, Japan's annual production of solar cells and panels accounts for over half of the world's yearly total.

Last year, its solar cell and panel output grew 48 per cent year-on-year.

The country also tops the world league when it comes to putting solar panels on buildings, outfitting 70,000 with the panels last year alone, Cui said.