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In a move to bring down production costs and gear up for economies of scale, Energy Conversion Devices (ECD) has bought out Canon Inc.’s interest in their ten-year-old joint venture, United Solar Systems Corporation, a manufacturer of thin-film amorphous PV. It subsequently approached Belgium-based Bekaert N.V., the world’s largest steel-wire maker, for an $84 million USD infusion to build a new module production plant. As part of a deal signed on April 11, Bekaert acquired a 19 percent stake in United Solar from ECD and put up an initial $42 million which will be used to construct a new facility on an undetermined site near United Solar’s plant in Troy, Michigan. The additional facility will be the core of a new joint venture, with Bekaert controlling 60 percent and the remainder belonging to United Solar. The end effect means both ECD and Bekaert will have a 50 percent share of the joint venture, to be known as Bekaert ECD Solar Systems LLC. More intriguingly, the plant will not only include a new 25-MW production line for assembling modules, but also another 25 MW line for producing United Solar’s trademark aluminum-backed roll-to-roll thin film cells, which will then be sold to Bekaert ECD for module assembly. United Solar’s 5 MW line at its current facility will probably be used for manufacturing cells for specialty and space products. In the deal, Bekaert is obligated to invest another $30 million in Bekaert ECD toward construction of the plant and marketing over the next three years, with a final $12 million injection to be made by the end of 2004. At that point, Bekaert can decide to remain as a 60 percent owner of the joint venture, or it can opt to merge Bekaert ECD with United Solar by exchanging its 19 percent interest in United Solar for a controlling 55 percent share of that company. Before negotiations started, Bekaert had made it clear that it didn’t want to be part of a three-way deal that included Canon. According to Nancy Bacon, senior vice president of ECD, Canon was prepared to have its share bought out, wanting to focus on its core business rather than be diversified in PV. »Canon was happy with the investments it had,« says Bacon. »But they weren’t in a position to make the additional investments necessary to build a large volume plant.« As a result, ECD issued 700,000 of its shares to Canon for the Japanese giant’s 49.9 percent ownership of United Solar. Combined with Canon’s previous holdings in ECD, Canon is now ECD’s largest shareholder with about 10 percent of the company. According to Willy Snaet, Bekaert’s vice president for corporate communications, its stake in United Solar, combined with its investment in the Bekaert ECD joint venture, is a move based on analysts’ predictions of the growing PV market. The technology that United Solar uses for sputtering and deposition on flexible aluminum sheets, says Snaet, fits well with Bekaert’s deposition know-how due to its expertise in wire coating. »We produce an anti-dust film, for example, which is nothing else than sputtering a type of magnetic coating on a plastic film. This is very close to what United Solar is doing.« Bekaert, which has facilities in 25 countries, plans to market the modules worldwide. In addition to the cell manufacturing plant in Michigan, United Solar also has a plant in Tijuana, Mexico, where solar modules are assembled under the trade name Unisolar. »If the market for solar expands like we expect,« says Snaet, »we may have to build another plant by 2005.« United Solar Willy Snaet William
P. Hirshman
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