Conergy
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Conergy AG was founded in 1998 by the former chairman of the board Hans-Martin Rüter. With a turnover of 706 Million euros in 2007, and employing more than 2000 staff currently, Conergy is one of the leading solar energy companies in Europe. It also has a company calle Conery Americas.
As a manufacturer of solar-thermic, photovoltaic and wind components, Conergy supplies exclusively via commercial partners.
Since March 2005 Conergy AG has been registered at the Frankfurt Stock Exchange with the abbreviation “CGY“ and the ISIN DE 00060 40025. Three months after its IPO, the company is now listed on the TecDAX.
Conergy has been increasingly building a presence in foreign markets. Conergy now operates subsidiaries in 25 countries on five continents. As well as expansion into the most promising solar markets worldwide, Conergy plans a diversification of its product range. Via three brands, which are clearly delimited relative to each other, the Conergy group serves solar wholesalers, installers, industrial or private roof-owners and investors in solar power as required. In this way the respective customer wishes can be tackled and implemented by specialist sales teams – a key factor for the success of the Conergy Group. Potential for growth is additionally created by extension of the solar portfolio based on needs, for instance with large solar-thermic plants and solar cooling systems.
Currently, Conergy AG is building its fully automated, state-of-the-art wafer-, cell- and module plant in Frankfurt (Oder). By the end of 2007 up to 50 MW of modules will be produced on site. From 2008 on, the wafer, cell and module production lines will reach their full capacity of up to 250 MW of modules annually, about 1.25 Mio. modules respectively. The modules will be used for Conergy’s international sales channels.
In the medium term, Conergy will create 1000 jobs on site thus contributing significantly to the solar industries in Germany.
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[edit] Early successes and its peculiarity
Since its foundation some 12 years ago, the company had been operating at a large rate of growth, in terms of revenue and human resources. It started as a one man show, Hans-Martin Rüter and it became a large company having presence in most German cities as well as in Spain. Conergy had a few peculiarities and has always been regarded as its success formula. One of the most interesting peculiarities is that it has 4 daughter companies that operate in the same field as the holding company. They are SunTechnics (founded in 1996), Conergy, AET and Voltwerk (later Epuron).
It is said that with 4 sister companies working in the same field, but in different position of the value chain, the company could capture more market share than having only one name. The daughter company of the same name, functions as the production, procurement and distribution of products. SunTechnics, being the engineering arm provides revenue via project management. AET, an acquired entity functions more or less similar to Conergy, with the slight difference of target market. Conergy was catering for individual customers while AET was supposed to take care of distributors. In the end, the effectiveness of such a strategy is highly questionable.
Despite what might have been confusion for its customers, the formula was able to bring in the early success. It was able to generate a revenue of over 1 Billion Euros in sales in 2005.
Another differing aspect of the company is that it is more or less without hierarchy, that practices open door policy. In other words, it is one of the first German companies that work without a strong traditional hierarchy, and that the managers also do not close their doors (this is viewed as to reduce the anxiety of the employees when meeting their respective superiors).
[edit] Strategy 50/50/08
In 2006, emboldened by its more than 1 Billion Euro revenue, the company decided to expand into different technologies, all of which are renewable energies. The intention was made into a strategy named 50/50/08 which is supposed to diversify the company's attention into all renewable energy fields, fields such as Bioenergy (which includes Biomass and Biogas but not biofuels), wind energy, solar thermal (namely hot water).
The first 50 in the strategy was supposed to mean that 50% of the revenue the company makes should be from fields unrelated to Solar Photovoltaic (Despite this, off-grid solar Photovoltaic projects fall outside of the category of Solar PV), and the second 50 denotes that 50% of all revenues should be from outside Germany. The final 2 digits, 08, denotes that both this targets should be achieved by 2008.
[edit] The downfall
To achieve such ambitious targets, the company employed multiple tactics. First, to grow organically, and the latter, to grow via acquisition.
Prior to 2006, the company boasts a total employment of around 1,500 employees. By the end of 2006 (some 6 months after initiation of 50/50/08), the company is already around 2,300 strong. By mid of 2007, the number reached close to 3,000. A large portion of the employees at this point are either new from acquired companies.
By the third quarter of 2007, signs of trouble are already looming. Cash flow became a problem due mainly to the fact that there are simply too many employees and at the same time, the acquired companies were still in transition period, hence revenues were not coming in. By the time for the stockholders meeting, the company has been showing that none of the target of 50/50/08 strategy was even close to achievement, and worse off, the company was unable to procure products for projects that are supposed to be bringing in the revenue.
Liquidity shortfall at the end of 2007 forced the company to increase the amount of shares released to public by around 2,000,000 shares, this raised around 70 million Euros and a further 30 million Euros was acquired in the form of new credit lines from banks. [1]
As a desperate measure to the inefficiency of the company at this point, it was decided that the company would now focus on its original core-competencies. Almost all of the previously acquired companies were either sold off, or shut down. Furthermore, an estimated 1,000 employees were laid off.
[edit] The aftermath of 50/50/08
2008 was in essence a year of consolidation for the company. The weeding out of inefficiencies and re-structuring. The restructuring of the company effectively began at the end of 2007, but the effort did not end, and till recently, the after effects of the failed strategy are still being felt.
Ironically, the strategy did achieve its numerical meaning. The company shrank 50% in 2007 and shrank almost another 50% in 2008.
[edit] LG
LG Electronics Inc. took its first dive into the solar-panel manufacturing pool, as it announced a preliminary deal to form a joint venture with Conergy. Under the deal, set to be completed by year's end, LG would acquire a 75 percent stake in Conergy's Frankfurt solar-panel plant [2].
Due to the worldwide financial crisis and changes in strategic direction, the Korean company LG Electronics has informed Hamburg-based Conergy AG that it currently does not wish to proceed with the acquisition of a majority stake in Conergy’s solar module production in Frankfurt (Oder) through a joint venture. [3]
[edit] See also
- First Solar
- Q-Cells
- Solarworld
- South San Joaquin Irrigation District (SSJID)
- Sunpower
- Vestas
- Renewable energy companies on the stock exchange
[edit] References
- ^ http://www.conergy.de/en/DesktopDefault.aspx/tabid-242/310_read-8475/
- ^ http://www.greentechmedia.com/articles/lg-plots-solar-partnership-with-conergy-1395.html
- ^ http://www.conergy.de/en/desktopdefault.aspx/tabid-237/271_read-9596/
[edit] External links
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