Breaking the industry's "inner spiral", photovoltaic companies go abroad intensively
The photovoltaic industry has entered an era of low-profit margins, and going abroad has become an important starting point for Chinese photovoltaic companies to break through the "internal turmoil". "Competition in the domestic photovoltaic market is fierce, and the Middle East is the new blue ocean of overseas photovoltaic. Against this background, Jinko Energy decided to build a factory in Saudi Arabia. In the future, Jingke Energy will build a part of the industrial chain locally. As a chain owner, Jingke hopes to go global and grow together with domestic accessory manufacturers." Qian Jing, vice president of Jinke Energy, said in a recent interview with a reporter from China Securities Journal.
Industry insiders believe that the Middle East has become one of the fastest developing regions for new energy, and there is strong demand for photovoltaic products. Our country has a complete photovoltaic industry chain, which can help the development of new energy industries in the Middle East. This provides a broad market space for my country's photovoltaic companies.
Opening a new model of globalization
On the evening of July 16, Jinko Energy announced that its wholly-owned subsidiary Jinko Middle East signed an agreement with a wholly-owned subsidiary of Saudi Public Investment Fund ("PIF") and Vision Industries Company ("VI") to establish a joint venture in Saudi Arabia to build a 10GW high-efficiency battery and module project. The total investment of the project is approximately 3.693 billion Saudi rials (approximately 985 million US dollars), equivalent to approximately 7.158 billion yuan.
"By investing in photovoltaic projects in Saudi Arabia, Jinko Energy will accelerate its transformation from 'global marketing' to 'global manufacturing'. This may be a feasible solution to crack the industry's 'internal'." Qian Jing told reporters that Jingke Energy will open a new model of globalization.
Talking about why Jinke Energy chose to build a factory in Saudi Arabia, Qian Jing said that this is part of Jinke Energy's globalization strategy. Competition in the domestic photovoltaic market is fierce, and the Middle East is the new blue ocean for the overseas photovoltaic market. On the one hand, Saudi Arabia has strong demand for photovoltaic products; on the other hand, Jinko Energy has a local foundation, accounting for 70% of the market share, and has obvious first-mover advantages. At the same time, customers in the Middle East have higher requirements for technical solutions and products, and tend to choose leading photovoltaic companies with experience and global marketing networks. "We share the same goal with PIF and VI to integrate Jinko's advanced technology, manufacturing capabilities, and management system with PIF's funds to meet the needs of local and surrounding markets." Qian Jing said.
In Qian Jing's view, the previous version 1.0 of the sea was to "sell" photovoltaic products, but the current version 2.0 is to "build", just as the company's chairman Li Xiande proposed from "global marketing" to "global manufacturing".
Talking about the supply chain issues of Saudi factories, Qian Jing said that at the beginning, they need to purchase from China, and Jinke Energy plans to build part of the local industrial chain in the future. As a chain owner, Jinke Energy hopes to go global with domestic accessory manufacturers and grow together in overseas markets.
Targeting the Middle East market
As power generation costs fall, the global competitiveness of Chinese photovoltaic companies continues to improve. In recent years, the demand in the overseas photovoltaic market has grown rapidly, and Chinese companies have welcomed opportunities when going abroad.
On the evening of July 25, Junda announced that it planned to invest and build a 5GW high-efficiency battery production base in the Suhar Free Trade Zone of the Sultanate of Oman. The project is expected to have a total investment of US$280 million (approximately RMB 2 billion) and is expected to be completed and put into operation in 2025.
"Currently, some overseas regions are embarking on building local photovoltaic industry chains. Due to factors such as high-tech barriers to photovoltaic cells and high requirements for talents and research and development, overseas photovoltaic cell production capacity is relatively scarce." Relevant persons from Junda Co., Ltd. told reporters that based on comprehensive considerations of various factors, the company plans to invest in building an Oman battery production base and continue to build an overseas customer system.
Since 2023, Junda has targeted overseas markets and continued to develop customers in Asia, Europe and other regions. According to the announcement, since 2023, the proportion of overseas sales of Junda shares has climbed from 0.29% to 4.69%. In the first quarter of 2024, the company achieved overseas sales of 431 million yuan, and the proportion of overseas sales increased significantly to 11.62%.
On the evening of July 25, Power Construction China announced that the company's Abu Dhabi branch and the company's subsidiary Huadong Academy Middle East Co., Ltd. formed a consortium to sign an EPC contract with Ajiban Photovoltaic Project Holdings Co., Ltd. The contract amount is approximately US$755 million, equivalent to approximately RMB 5.384 billion. Power Construction China said that Middle Eastern countries are committed to promoting diversified energy production and reducing carbon emissions while promoting economic development.
On July 16, TCL Zhonghuan, Sunshine Power and other companies announced that they had won large orders in Saudi Arabia or jointly invested in optical storage-related projects.
Ping An Securities believes that the Middle East region has unique lighting resources, with an average annual solar radiation of more than 2000 kilowatt-hours/square meter. It is one of the regions with the best photovoltaic resources in the world. At the same time, major countries in the Middle East have a strong awareness of energy transformation, a good economic foundation, and strong policy support. They have introduced plans such as "Saudi Vision 2030" and "2050 United Arab Emirates Energy Strategy." To this end, the agency judged that the photovoltaic market in the Middle East has huge development potential and is expected to become a battleground for domestic photovoltaic manufacturing leaders.
According to statistics from Infolink Consulting, photovoltaic demand in the Middle East in 2023 will be approximately 20.5GW to 23.6GW, and photovoltaic demand continues to grow.
achieve multi-win
At the recently held seminar on the development review of the photovoltaic industry in the first half of 2024 and the situation outlook for the second half of 2024, the chairmen of many leading photovoltaic companies reached a consensus on the issue of going abroad: in the context of increased trade protection, photovoltaic companies will disperse overseas in the future. Build factories or become the optimal solution.
Chen Gang, chairman of Aixu Co., Ltd., introduced that Aixu Co., Ltd. has established a research institute in Europe and maintained exchanges with local European companies. It hopes to achieve win-win results with its European counterparts while developing China's photovoltaic industry.
"Jinko Energy is building a factory in Saudi Arabia and opening a new round of global innovation cooperation model. In the future, Jinko Energy will copy this cooperation model to other parts of the world." Qian Jing said.
"Overseas markets are developing rapidly, especially emerging markets such as the Middle East. Overseas production capacity is rapidly increasing, and the photovoltaic industry is still moving forward steadily." Wang Bohua, honorary chairman of the China Photovoltaic Industry Association, said at this seminar that in order to promote long-term high-quality development of the industry, photovoltaic companies should cooperate to go to sea, and at the same time selectively decentralize their layout, and carry out diversification through joint ventures, technology and brand licensing. investment.
