SMA to close Denver factory, lay off 280

SMA Factory Denver

Today SMA Solar Technology AG dropped a bomb in its quarterly results, reporting that it will close inverter production facilities in Denver, which employed 280 full-time workers, as well as a factory in Cape Town, South Africa.

SMA blamed price pressures for the move, and says that it plans to mover production to Germany and China. “The closure of our production locations in Denver and Cape Town was extremely difficult for us,” noted SMA CEO Pierre-Pascal Urbon. “However, this step is unavoidable if we are to lastingly counteract the persistent price pressure and to achieve better production capacity utilization in China and Germany in the future.”

SMA says that the move will avoid additional capital expenditure in production and test equipment, citing the flexbility its production plants. “Because we do not intend to produce the new Sunny Central product generation in Denver anymore, we can save the planned investments,” Susanne Henkel of SMA’s corporate press department told pv magazine.

“Annual production capacity after the closures will be 10 GW, and we can adjust our production capacity up and down very quickly as we have an extremely flexible production concept including temporary workers.”

SMA has struggled in recent years to adapt to rapidly shifting global markets, while trying to maintain market share amid the rise of Chinese inverter makers Sungrow and Huawei, as well as Israel’s SolarEdge.

However, the company showed a positive operating result of $44 million for the first six months of 2016, as opposed to a loss during H1 2015, and additionally grew revenues. And while the company notes that price pressures in the industry have been “unexpectedly strong” in recent weeks, it also expressed optimism about the future.

“The solar industry’s medium-term prospects are good for those companies emerging successfully from the consolidation phase,” Urbon said in reference to SMA’s recent restructuring efforts. “The cost of solar power generated by PV systems will at last be at a similar level to that of onshore wind turbines before the end of the decade. This will mean entirely new growth prospects for highly flexible companies such as SMA.”

 

An earlier version of this article focusing on SMA’s results was featured on the pv magazine global site.