InterviewSolutia seeks to be one-stop shop in China solar market

10 August 2010 22:07  [Source: ICIS news]

By Brian Ford

HOUSTON (ICIS)--Solutia is working to become a one-stop supplier of a crucial part of the solar energy market in China, an official with the US-based specialty chemicals producer said on Tuesday.

Solutia makes solar module encapsulants, which are used to protect electronics in photovoltaic (PV) modules.

With its plant in Suzhou, China, the company can provide materials to some of the world’s fastest growing photovoltaic (PV) markets, said Chris Reed, business management director of advanced interlayer photovoltaics.

Solutia is in a unique position because the Suzhou facility makes both polyvinyl butryl (PVB) and ethylene vinyl acetate (EVA), the two major solar encapsulants.

“We see the Chinese PV market as growing the most,” he said.

The Suzhou facility offers the advantages of being closer to customers as well as having lower shipping and raw material costs, Reed said.

Solutia announced this year two planned expansions at its Suzhou facility.

In April, the company said it planned to expand its Saflex PVB capacity at Suzhou with a new production line to serve the photovoltaic, architectural and automotive markets in China and the broader Asia Pacific regions. The new line would be completed by the end of 2011.

In July, the company said it planned to expand its operations in China to include the production of its Vistasolar EVA encapsulant at Suzhou, with a production line scheduled to be completed by June 2011.

The July announcement was made after Solutia purchased Germany-based EVA encapsulant producer Etimex Solar for $325m (€247m).

The ability to produce both EVA and PVB at Suzhou would position Solutia as the only one-stop source for solar encapsulants in the greater Asia Pacific region, the company said.

Reed said EVA makes up 80-90% of the solar encapsulant market, while PVB makes up most of the rest.

EVA and PVB are the only encapsulants with “a legacy of durability data,” he said.

The market for encapsulants is “very conservative,” Reed said.

The encapsulant “makes up 3-10% of total costs [of the solar module] but it is a very important component,” as solar modules are built to last 20-25 years.

“We are seeing customers who want a significant benefit in costs and performance before they will even consider a change,” Reed said.

“To an extent, China is leading the way [in solar power development] with its need for power," he added.

China currently exports all but a small percentage of its solar panels, but is set to become a large consumer of solar power, with a goal to raise the share of renewable energy mix to 6% from the current 1.5%.

China’s Ministry of Finance last year launched a round of subsidies for large-scale solar projects as part of its “Golden Sun” initiative to boost solar power.

Solutia cited an industry report as saying China demand for EVA encapsulants was projected to almost triple by 2015 from its 2009 levels.

Solar encapsulants are a part of Solutia’s growing advanced interlayer businesses, which saw $208m in net sales during the second quarter, up by 30% from the same quarter in 2009. Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by $5m to $44m compared with the prior-year second quarter.

($1 = €0.76)

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By: Brian Ford
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