Global manufacturing, Scandinavian quality and new technologies: An interview with REC Solar Vice President of Sales and Marketing Åsmund Fodstad

Åsmund Fodstad
Åsmund Fodstad

by Solar Server International Correspondent Christian Roselund

 

Åsmund Fodstad is the Vice President of Sales and Marketing for REC Solar, a division of the Renewable Energy Corporation Group (REC, Sandvika, Norway). REC is the world's largest silicon and wafer producer and a fast growing cell and module manufacturer. Prior to REC Group, Mr. Fodstad has more than a decade of executive management experience at leading CRM and Telecom companies such as SuperOffice and TANDBERG. Mr. Fodstad holds a Bachelor degree in International Business Management from The Norwegian School of Management.

 

Solar Server: First off, congratulations on the completion of your Singapore facility. Can you talk a little about the process of developing the new facility and why this was important for REC?

Åsmund Fodstad: Thank you for recognizing such a milestone. For REC it is an important milestone. Being a leading company within the solar industry, being the leading producer of silicon and one of the leaders in the wafer industry, it has been a long-term goal for us to also get a key position in cells and modules. And then of course with the new Singapore facility being a fully integrated facility we also stepped into the big league in cells and modules. I believe we are coming from approximately the top 25 and moving into the top 10 level also with cells and modules which is also important for us being a fully integrated company.

We did check in Singapore in July 2008. After doing due diligence for more than 25 locations, Singapore came out in our perspective as the best place for a facility. There were several circumstances to that, but maybe the most important was the access of people with knowledge and competence which Singapore can offer. And then of course the Singapore authorities have been also very very good and beneficial for us as a company.


Solar Server: That is interesting; you are talking here about vertical integration. I have noticed that a lot of the Chinese producers are very focused on vertical integration. Why is this such an important goal for REC?

Åsmund Fodstad: Let me as well say that vertical integration has been a buzzword in this industry for a long time. I see REC as one of the two or three being fully integrated, or being a big player in silicon, a big wafer player, and also a big player in cells, modules and systems. We have been there for a long time, and we do see that competition is striving to get to that place as well. For us that means: number one technology advantages, it means the ability when it comes not only with supply, but the ability and predictability of quality. And then to be able to take the advantages of that throughout the value chain.

We are not dependent upon a third party delivering silicon wafers to us to deliver a final product to market. Then we just started seeing advantages of that. One thing is that we are now introducing a new FBR silicon factory, being our technology on the silicon side. We do hold now the world record on the wafer side. And we have won an industry solar award for the modules produced on the Singapore side. It proves from the market perspective that we are already getting good traction on this vertical integration.

A second point that I would like to put forward is not on the technology side, but the cost perspective. For us, we do know the cost of silicon. We do know the cost perspective on wafers, and we are able to optimize this through the value chain. So that is important not only for us to have a competitive position, but I think that we have a huge obligation in the whole solar industry to ensure that we drive down the cost of solar. And then of course having the full vertical integration enables that in a better extent than if we were just a wafer player or just a module player.


Solar Server: Thank you. So to talk about Singapore: I noted that REC is closing its module plant in Sweden. Can you talk about the relative advantages and disadvantages of operating PV manufacturing in Europe versus North America and Asia, and is an increasing migration of PV manufacturing to Asia inevitable for the industry?

Åsmund Fodstad: Number one I think this is a very relevant question. I want to underline that we do have big manufacturing facilities in the U.S., we do have big manufacturing plants in Scandinavia for wafer and cell, and we now have a fully integrated site in Singapore for wafers, cells and modules. So we do have substantial assets in three big continents, however you do see not only for the solar industry, but manufacturing in general more and more companies are moving further and further East, and I do believe, and we do believe, that is a necessity.

For us, we do run a fully automated production facility, so the key component is actually getting access to knowledge. If you look at the Singapore site as a reference, there we have people with long-term experience in the semiconductor industry, which is very similar to what we are doing ourselves. We have people there from assembly backgrounds and experience, which they have good reference to solar and background from the automotive industry, and then we have combined that with PV knowledge and PV excellence. And that, together with the manufacturing excellence and the way they work in Singapore, is a very very good combination.

And then of course we have European and Scandinavian standards on quality, on safety, on long-term durability and sustainability, and that, combined with the Singapore manufacturing excellence with our standards, has been key number one to success but also key to making the decision for Singapore.


Solar Server: Since you have such an automated facility, labor costs aren't such a big part of the question. Are there specific cost advantages other than labor that are significant for Asian manufacturing and can you talk about those?

Åsmund Fodstad: So being fully automated, personnel cost is not the same. I do believe that I also read from one of the financial banks, which took part in our grand opening in Singapore, they went to a few competitors in China the week after and I think their reference is that in a facility where we would have 1600 people, they would easily have 5, 6, 7, 8,000 people. So it is a totally different approach on making a product.

For us, it all starts with quality. We are a quality producer. It is important for us, and we feel that we are able to take up a premium on this today, and looking forward, but for us we will never compromise on the quality level. And of course being fully automated means that as long as you have good stability in your factory, it is much much easier to keep consistency, and to keep increasing efficiencies on cell levels as opposed to a manual process.


Solar Server: So if we can jump over to your polysilicon operations, I noted that you are using a fluidized bed reactor polysilicon technology. can you tell us a little about this technology, say compared to the Siemens process?

Åsmund Fodstad: If you look at the silicon facilities we have today, they are based at two locations, one is in Butte, Montana and another is Moses Lake in Washington, and they are basically four different silicon factories. Two hold the Siemens technology, they've been there for quite some years, and the two latest ones are connected to the fluidized bed reactor technology (FBR).

For us the key advantage of the fluidized bed is: number one, it uses 80-90% less energy than the Siemens technology. And energy is the biggest cost component in making pure silicon for PV. So that is itself is a huge step forward. The second advantage on the fluidized bed is the continuous production of silicon. I think maybe the best way to describe this is that with the Siemens technology, it is like baking a cake. You put in one cake and it needs to be in the oven until it is finished, and then you make a new cake. So you need to re-start the whole process.

In FBR you have a continuous process, it keeps on producing silicon without going on and off, on and off, and that gives us an advantage. The other part is that it is much easier to handle, it comes out granular instead of being the big blobs we see from the Siemens. And we do already see that the efficiency levels at the FBR is at the level of the Siemens technology, and that for us is very important.


Solar Server: Do you believe that FBR can replace the Siemens process?

Åsmund Fodstad: We believe that the best potential absolutely is so, but you see that we have a strategy right now to run both technologies in parallel.


Solar Server: That sounds clever. So to talk a little about markets - many analysts have expressed concern about the global PV market in 2011, particularly the impact of the cuts in Germany's feed-in tariff. What is REC's strategy for 2011 and beyond?

Åsmund Fodstad: We are today in all key markets, and for us the European market is still the biggest market. However we do see very good traction for us in Asia, and we do also have a solid position in the U.S. market. We have a guidance officially on this. We do see a strong quarter four, we do see momentum coming in the first half of 2011, and all in all we do believe that the market could potential grow in 2011. However, not to the extent that it did in 2010.

We believe that it will be a challenging year, but we do see a good setup with the FBR and the setup with Singapore that we have a very competitive position and we should be ready to tackle this throughout 2011. We feel very optimistic about the market.


Solar Server: I was noting in the last quarter's financial statement that REC showed strong revenues and a strong gross margin but that there were some large financial costs that occurred in the last quarter. Do you care to comment any on how that looks going forward and on that phenomenon?

Åsmund Fodstad: There is a good reason behind that observation, if you do look at the silicon side, we invested close to $2 billion US dollars in silicon factories in the U.S., and we disclosed the same amount, about $2 billion dollars. So coming into the year 2010 we had a lot of our assets either under construction or under ramp-up. Of course that has a huge impact.


Solar Server: So, is there anything we haven't discussed that you would like to share with our readers?

Åsmund Fodstad: I think we covered it. Of course, we are very proud about the manufacturing facility, but I think all in all we most happy about finally becoming a leading player within cells and modules. We are getting good traction on the REC brand and a good market position, which is ultimately more important than discussing exactly what kind of production facilities you have or capacity, which has been a trend.