Solar company to ratchet up manufacturing, acquire companies

After Spanish company Solaria Energia y Medio Ambiente lost 42 percent of its market value in 2010, the solar company will this year focus on acquiring a raw materials supplier as it endeavors to shift toward more profitable businesses.

The company is currently on the market for a manufacturer of solar cells used in panels, the company's director of investor relations, Pedro Echeguren, told Bloomberg; the move is strategic as cell makers earn profit before interest, tax, depreciation and amortization of 30 percent of sales - a jump from the 9 percent at Solaria in the first three quarters of 2010.

Echeguren affirmed in an interview that the industry will "sooner or later" experience a "consolidation" of companies. "When that happens, we are going to be hunters." Many European solar equipment manufacturers are looking to keep their margins high as they face stiff competition from Chinese firms - propped up by the Chinese government - that are augmenting their own manufacturing capacity and slashing prices.

To compete with increasing competition from abroad, Solaria plans to expand its output of solar cells by four-fold to 100 megawatts annually; global demand for solar panels is forecast to climb by 15 percent this year.