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Yingli fostering Lightway's green dreams

By Zhang Qi (China Daily)
Updated: 2009-02-28 08:14

Solar cell producer Yingli Group finally has a reason to smile. The company has now emerged as the one bright spot in a solar cell industry that has been mostly plagued by darkness.

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The rosy fourth quarter earnings numbers have indeed cheered Yingli Chairman Miao Liansheng. But his cup of joy truly overflowed when the long sowed seeds of a friendship transformed itself into a new venture.

Miao has recently teamed up with real estate developer Longjitaihe Industry Group to set up Lightway Green Energy Corporation for manufacture of photovoltaic solar systems.

While the Baoding-based realtor will invest 4.2 billion yuan ($614.05 million) in the project, Miao's company Yingli will provide the technical and management support.

What makes the friendship unique is that Longjitaihe decided to invest at a time when the real estate industry does not even figure in the recent stimulus packages.

Miao told China Daily that the new manufacturing facility, spread over 165 acres, will have a production capacity of 600 MW by 2010.

The first phase of 300MW is expected to be completed by September this year and would contribute around $110 million of revenue, said Wei Shaojun, chairman, Lightway.

Coming back to the earnings numbers, Yingli's NYSE-listed subsidiary Yingli Green Energy, revenue in the fourth quarter rose to $258.1 million, up 21 percent year-on-year, while net income fell to $14.7 million from $19 million.

The fall in net income can be largely attributed to the weaker euro, said company officials who declined to be named.

Yingli's rivals Suntech posted a loss of $65.9 million for the fourth quarter, while LDK Solar said it expects to report a net loss of $135 million to $145 million.

"It is the whole processing system that matters. We kept a tight leash on costs for the whole manufacturing process," said Miao.

Yingli is a vertically integrated solar company that makes polysilicon from casting ingots to slicing wafers. These wafers are then placed into solar cells, which are then installed in solar modules.

According to Miao, Yingli is lowest cost solar cell manufacturer in the world as it uses four processing procedures.

Most of the other solar cell producers like Suntech only make solar cells and modules, buying products of the first two procedures.

Lightway will copy the whole manufacturing process from Yingli, said Miao.