German industrial giant Siemens moved Monday to end
years of losses with its solar energy business by announcing it was
pulling out of the branch to focus on wind and hydroelectric power.
"Due to the changed framework conditions, lower growth and strong
price pressure in the solar markets, the company's expectations for
its solar energy activities have not been met," Munich-based Siemens
said in a statement.
The group said it was holding talks with unnamed groups for the
sale of the solar operations.
Faced with a lacklustre global economic outlook, Siemens' chief
Peter Loescher recently announced a two-year corporate savings
programme, which included a review of all the group's unprofitable
businesses.
In addition to government moves to cut subsidies for solar energy,
Germany's once burgeoning solar business sector has faced increasing
global competition, notably from China.
This has triggered a string of solar companies in Germany being
forced into insolvency.
Siemens launched a drive to develop its solar business in 2009
after buying Israel's Solel Solar for 284 million euros (371.2
million dollars) and investing in other acquisitions including
Italy's Archimede Solar Energy.
But the Siemens solar business, which has about 620 employees
worldwide, has generated less than 300 million euros in revenue each
year.
At the same time, however, Siemens' wind energy operations has
emerged as a global market leader with orders amounting to more than
10 billion euros and employing about 9,000 workers. Siemens' joint
venture Voith Hydro business has also turned in a profit.
