2012agm
At Anwell's AGM on Fri, CEO Franky Fan explained to shareholders that the company is still in its capacity growth phase and high depreciation cost was a necessary evil. Photos by Sim Kih

 

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Venue: Wilkie Edge, Wilkie Road
Time & date: 2 pm, April 27

 


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'If we had not grown our optical disc business, we would no longer be around today. It is the same for solar,' said Franky Fan.
ANWELL TECHNOLOGIES CEO Franky Fan said that the company's decision to expand capacity when solar panel prices crashed was the right one when he addressed concerns raised by shareholders at the company’s AGM on Friday.


Anwell started mass-producing thin film solar panels in 2010 with an annual production capacity of 40 megawatts (MW).  By 2011, its capacity had more than tripled to 150 MW.

However, the past two years have been highly challenging for the solar panel industry. 

Average prices for photovoltaic modules slumped by about 50% last year and fell by another 10% this year-to-date to about 85 US cents per watt.

Mr Fan maintained that manufacturers of commodity products like solar panels and optical disks need economies of scale to do well, and his vision is for Anwell to become one of the top 5 manufacturers globally.

Aside from solar panels, Anwell is in the business of developing equipment for manufacturing optical media (such as DVD-Rs and Blu-Ray). It also manufactures optical media.

Below is a summary of questions raised by shareholders at the AGM and the replies given by Mr Fan and executive director-cum-CFO Ken Wu.

Q: How is your solar panel business progressing?

Our capacity for solar panel manufacturing is growing.  Other than just manufacturing, we are also beginning to provide engineering, procurement and commissioning (EPC) as well as build-transfer (BT) solutions to protect our margins.

Q: Many solar panel manufacturers are exiting the business because of the price slump. How does Anwell control cost?

I believe we have a competitive edge in the solar industry.  According to industry reports, the solar panel market will eventually be dominated by thin film.

Firstly, we are producing thin film solar panels and not the conventional crystalline types.  As a thin film solar panel manufacturer, we enjoy cost-efficiency.  Our cost of production is only 30% of that of producers of crystalline solar panels.

Secondly, among the thin film manufacturers, we produce the largest Gen-5.5-sized panels.

Thirdly, being located in China gives us the advantage of being a low-cost producer.

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'The Group's gross margins have improved since we started our solar business,' said Ken Wu.

Q: The problem with most solar panel manufacturers right now is the capacity is much greater than demand.  What is the utilization rate for your 150 MW capacity?

Unlike crystalline solar panel manufacturers, we do not only rely on retail business.  We also have projects.  There are months when utilization is greater than 100% of production and there are months when we have excess inventory.

I believe we can achieve full-year sales exceeding our planned capacity.

That is why we are planning capital expenditure to increase capacity at Dongguan.  The Dongguan project will occupy over 1,000 mu (about 67 hectares) and will be the world’s largest fab.

As the price of solar panels declines, there is growing demand for thin film, especially in tropical countries as thin film is able to withstand the high temperatures in the region.


 
Related story: ANWELL TECHNOLOGIES: "Industry Consolidation Will Stabilise Solar Panel Prices In 2012, Benefit Us"

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