Vishanth Venkatesh

R&D, Planning – Vikram Solar

Vishanth.venkatesh@vikramsolar.com

TAKING MANUFACTURING FURTHER :

MOVING INTO VERTICAL
INTEGRATION
www.vikramsolar.c om
Vertical Integration

It is the merging of two business which are at different stages of

the product Value Chain

The PV Value Chain

Poly-Silicon Silicon Wafers PV Cell Module

Power
EPC IPP
Generation

2
Vertical Integration -The Solar Perspective

The solar power industry is challenging. Increasingly competitive

international solar power market, vertical integration can provide
a critical competitive advantage

Intentions are to
 Speed up Production
 Control the overall Quality of Production and Pricing
 Achieve Success in this Competitive Industry

3
PV Solar Growth : Worldwide

Report: Solar Buzz

4
PV Solar Growth : Contributors

Source:- Earth Policy Institute (EPI)

5
The JN National Solar Mission

Launched in Jan 2010 with an objective to make India a global leader

in Solar power by creating policy condition for its diffusion.

Application Phase I Phase II Phase III

2012-13 2013-17 2017-22
Solar Collectors 7 million sq meters 15 million sq meters 20 million sq meters

Off Grid 200MW 1000MW 2000MW

Utility grid power including 1000-2000 Mw 4000-10000Mw 20000Mw

Roof top

• Soft finance facility available through IREDA, Government of India

• SEZ Policies – zero import duty, exempt from excise duty

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Vertical Integration – Aspects

 Address a better margin at every stage

 Better to build than to buy
 Less dependency on third-party suppliers
 Enables company to realize better technology and
cost synergies

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Vertical Integration - Benefits
 More streamlined manufacturing process with shorter
production cycles than other non-integrated companies
 No repetition of tasks

1.2
1
0.8
Logistics
0.6
Overheads
0.4 Production Cost
0.2
0
Integrated Stand Alone

8
Vertical Integration - Opportunities
 National and State Policies
 Increasing Local Demand
 Better Cost Competitiveness

Vertical Integration - Threats

 Well established International competitors
 Changing Policies
 ROI/ Payback
 New Technologies (Thin Film, for example)
 Cost of Ownership

9
Vertical Integration – Requirements

 Priority Funding
 Trained R & D Personnel
 Ability to keep up with Rapid Change

Point to Note : Weakening Rupee against the US Dollar

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The Present State

• Fluctuating FOREX
• Pricing Complexity
• Inadequate control (for planning, execution,
and analysis)
• Customer price variation
• Price change frequency
• Negotiation frequency
• Low operating margins

Demand interdependencies across multiple product sets

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Strengths Weakness

• Control of Price, Quality • Lack of Trained Resources

• Process & Production Streamlining • Lack of R & D
• Speed up Process • Inability to match the pace
• Cost Competitiveness • Funding

Opportunities Threats

• National and State Policies • Changing Policies

• Increase in local demand • Changing Technologies
• Capturing Larger Market Share • ROI/ Payback
• Well Established International Competitors

Thanks For Your Attention!