Conergy to discontinue production of solar cells, wafers

(SeeNews) – Sep 9, 2011 – German solar firm Conergy AG (ETR:CGY) will suspend the production of solar cells and wafers at its factory in Frankfurt on Oder due to the heavy price pressure and the build-up in overcapacity, the company said yesterday.

Overcapacity, especially from Asian producers, has lowered the prices of solar cells by 30% and of modules by 20% in the first half of 2011, CFO Sebastian Biedenkopf said.

Currently the company has a complete cycle - from wafers and cells to finished solar modules. In the future it will retain only the modules production and buy cells from external suppliers it has already worked. Due to the reorganisation Conergy will have to lay-off 100 of its permanent employees and transfer another 100 to the module production. The company plans to immediately start talks with the work council.

Alexander Gorski, member of the executive board, said the reorganisation of the factory in Frankfurt on Oder will significantly decrease Conergy's fixed costs, making it less vulnerable to the market and currency fluctuations and will guarantee the jobs of the remaining 350 employees.

Conergy will not permanently discontinue its production of solar cells and wafers. It will monitor the market and if manufacturing of cells and wafers proves to be cost-effective at some time in the future, the company will resume its production.

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