Siemens AG (NYSE: SI; DAX: SIE) is firing 150 of the 200 employees of its solar energy plant (formerly Solel Solar Systems) in Beit Shemesh, after failing to find a buyer for it. Siemens acquired the company for $418 million in 2009 from founder Avi Brenmuller and other investors.
Since the acquisition, Siemens has written off hundreds of millions of euros on the investment, but the total loss is even greater because of current financing of the plant in the past four years at an additional cost of hundreds of millions.
At its peak, the unit, known as Siemens Concentrated Solar Power, had 400 employees. The remaining 50 employees will provide technical support services for a Spanish project, which was hooked up to the grid a year ago, and for three other Spanish projects, which are close to completion.
In late 2012, Siemens announced that it was quitting the solar energy business, which in addition to thermosolar energy (which included production by the Beit Shemesh plant), included the planning and construction of photovoltaic solar fields. The company's decision was due to the sector's disappointing results and market weakness.
The thermosolar technology developed in Israel became too expensive following the plunge in prices for solar energy panels for the rival photovoltaic technology. Although Siemens received several offers for the Beit Shemesh plant, only Spain's Abengoa SA (IBEX: IBG) had the wherewithal to keep the plant in operation. But it withdrew its offer because of uncertainty about the market's future, even though Siemens had agreed in principle to finance the plant's operations for two years, "until the picture clears."
Published by Globes [online], Israel business news - www.globes-online.com - on June 16, 2013
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