Market and product

MUNICH (ICIS)--Wacker Chemie expects its polysilicon business to have a “challenging” 2012, due to the turbulent global photovoltaic market, the German chemical firm’s CEO said on Wednesday.

Speaking at Wacker’s press conference for 2011 CEO Rudolf Staudigl said strong growth and excessive subsidisationprompted many new competitors to enter the market at all points along the supply chain, resulting in too much production capacity.

“Even a market with average growth rates of over 50%, in some cases, could not fully absorb all this additional capacity,” he added.

“The situation quickly led to fierce price competition among producers of solar wafers, cells and modules. Today, a solar module costs half of what it did just five years ago,” he said.

He added that although the number of photovoltaic systems installed was again higher in 2011, supply exceeded demand.

As a result of this, Wacker’s customers built up high inventories during the year, he said.

“Reduction of these inventories then caused a decline in polysilicon prices and demand. Our fourth-quarter figures reflect the impact of the downturn,” he said.

Wacker reported a net loss of €79.5m ($104.6m) in the fourth quarter of 2011, down from a net income of €99.9m in the same period of 2010.

Total sales in the fourth quarter fell by 16.4% to €1bn, compared with the same quarter in 2010.

Earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 62.1% to €110.8m in the fourth quarter compared with the same period the previous year.

Earlier on Wednesday, Wacker said it aims to increase its sales by 1.8% year on year to €5bn in the fiscal year of 2012, but is targeting lower levels in its EBITDA compared with 2011.

($1 = €0.76)