On February 24, LG Electronics China Customer Department confirmed to reporters that the Cecep Solar Energy Co.Ltd(000591) battery panel business is expected to be closed before June 30.
LG Electronics will withdraw from the global Cecep Solar Energy Co.Ltd(000591) battery panel business based on a comprehensive assessment of the impact of rising material and logistics costs and severe supply restrictions on the Cecep Solar Energy Co.Ltd(000591) business, according to a statement released by LG Electronics.
LG Electronics began to operate the Cecep Solar Energy Co.Ltd(000591) battery panel business in 2010. Recently, the sales volume of low-cost products has increased, the market competition has become increasingly fierce, and the price of polysilicon and other raw materials has increased, resulting in the continuous reduction of its sales and operating profit. Data show that LG Electronics has less than 2% of the global Cecep Solar Energy Co.Ltd(000591) battery panel Market in recent years.
In April last year, LG Electronics, once the world’s third-largest mobile phone manufacturer, announced that it would completely stop the production and sales of the mobile (MC) business unit and completely withdraw from the global mobile phone market. In the previous six years, LG Electronics had a total loss of $4.5 billion.
In just one year, LG Electronics shut down two key businesses continuously, which attracted people’s attention.
Once an important supplier of photovoltaic modules in the world, why did LG Electronics finally choose to “abandon its son”?
China has the world’s largest Cecep Solar Energy Co.Ltd(000591) power generation industry chain cluster, and has also become the world’s largest Cecep Solar Energy Co.Ltd(000591) battery exporter. Data show that Chinese manufacturers control 70% of the global Cecep Solar Energy Co.Ltd(000591) panel market share.
In the industrial chain, in addition to the emergence of enterprises mainly producing Cecep Solar Energy Co.Ltd(000591) panels such as Longxing Chemical Stock Co.Ltd(002442) and Anhui Shenjian New Materials Co.Ltd(002361) , a number of comprehensive listed companies upstream and downstream of the photovoltaic industrial chain have developed rapidly, such as Longi Green Energy Technology Co.Ltd(601012) , Tongwei Co.Ltd(600438) , Jiangsu Zhongli Group Co.Ltd(002309) , Ja Solar Technology Co.Ltd(002459) , Trina Solar Co.Ltd(688599) .
In the field of Cecep Solar Energy Co.Ltd(000591) battery panels, Chinese suppliers increased the scale of production capacity, reduced costs and increased efficiency through plant construction and expansion, seized market share and squeezed the profits of Japanese and Korean manufacturers. Toshihiko Hirano, director of Mitsuko Koizumi, once said that “it is impossible to catch up with the expansion of Chinese manufacturers” (in the Cecep Solar Energy Co.Ltd(000591) battery panel Market).
Due to the growing strength of global competitors, LG Electronics has also gradually lost in key markets such as China. At the same time, the new energy vehicle market is in the ascendant. LG Electronics Cecep Solar Energy Co.Ltd(000591) battery panel business has no strong competitiveness in technology and price, so it can only shrink the business and focus on the business with more development potential.
According to the Puritan church, the Secretary General of the Beijing Centergate Technologies (Holding) Co.Ltd(000931) new battery technology innovation alliance and the director general of the battery hundred people’s Association, LG Electronics’s withdrawal from the Cecep Solar Energy Co.Ltd(000591) battery also lies in the consideration of resource integration by the major shareholder LG Group. “LG new energy, which is strongly supported by LG Group in recent years, has expanded rapidly in the fields of battery, photovoltaic and so on. It will compete with LG Electronics and needs to be further integrated. At the same time, LG has frequent accidents in the field of power and energy storage, leaving a bad impression on the outside world, resulting in the overall decline of its energy business.”
“In addition to the rising prices of raw materials, the impact of the epidemic and other factors, LG Electronics’ lack of competitiveness is also the main reason for its survival of the fittest in the Cecep Solar Energy Co.Ltd(000591) battery panel market. The shrinkage of some businesses of LG Electronics will objectively sell some markets, and Chinese enterprises can fill the position soon.” Major general Ding, founder of nail technology, said in an interview with Securities Daily.
