JinkoSolar: Global Network Plus Local Service Strategy

JinkoSolar Holding Co., Ltd. is one of the few PV manufacturers that has 1.2 GW capacity in 2011 with a vertically integrated model, producing high-quality crystalline ingots, wafers, cells, and mono- and multicrystalline PV panels. Its full control over the production chain allows us to guarantee the highest quality for our products and a much more efficient cost structure. With these competitive advantages, we are able to pass benefits on to our customers around the world.
JinkoSolar employs more than 10,000 professionals with factories in Shangrao (Jiangxi) and Haining (Zhejiang) covering more than 165 acres.
Its global marketing center is located in the modern business area of Pudong, Shanghai. JinkoSolar started expanding its international presence by establishing representative offices and logistics warehouses around the world.
CEO Kangping Chen talks about JinkoSolar’s market strategy and competitive edges that differentiate the company from its competitors.

Reported by Jeanny H. Lim (swied@infothe.com)

To help our readers understand you better, please give us a brief account on how JinkoSolar entered the solar photovoltaic business.

JinkoSolar Holding Co., Ltd. (NYSE: JKS) is a fast-growing, vertically-integrated PV manufacturer with production facilities in China and sales and marketing offices in Shanghai/China, Munich/Germany, San Francisco/the U.S., Bologna/Italy and Zug/Switzerland.

Since our inception as a wafer supplier in June 2006, JinkoSolar has become a leading solar module manufacturer and supplier by moving rapidly downstream and vertically integrating the critical stages of the solar power product value chain. As of June 30, 2011, we had a fully integrated annual production capacity of approximately 1.1 GW each for silicon ingots, wafers, solar cells and modules. We are working to achieve an integrated capacity of 1.5 GW by the end of 2011.

By focusing on efficient operational management and continuous technological innovation, we have been able to deliver sustainable, high-quality solar modules to customers across the globe, including Germany, Italy, Belgium, Spain, the U.S., France and China. As we continue to leverage our fully integrated production chain, we will continue to seek opportunities in emerging markets to increase our global brand awareness.

Could you introduce some of the successful projects you’ve carried out in the first half of 2011?

JinkoSolar was involved in numerous residential and commercial and utility-scale projects throughout the first half of 2011. Perhaps the most notable of our projects is the Solar Tunnel in Antwerp, Belgium, where 16,000 Jinko modules cover a total surface area of 50,000 square meter─ approximately the size of eight football fields, with total sales of over 450 MW in the first half of 2011.

The €15.7 million project is the first of its kind in Europe and will be used to power railway infrastructure, such as signals, lighting and the heating of stations. The endeavor is estimated to reduce CO2 emissions by 2,400 tons per year.

Could you tell us some of the competitive edges that differentiate you from your competitors?

Our competitive advantages stem from continuous cost reduction, consistent focus on product quality, market responsiveness and exceptional customer relations.

As a vertically integrated company, we exercise strict cost and quality control in every step of our production process─from ingots, wafers to cells and modules. Our market-oriented strategy enables us to make quick responses to the market by adjusting various factors such as inventory, production and sales.

Regarding customer relations, we have made every effort to build and maintain effective communication with our customers, and we strive to achieve a win-win situation no matter how trends change, understanding the challenges of the market and supporting our partners to reach their goals.

What was your priority last year, in terms of both business and technology development, which should affect your activities this year?

JinkoSolar’s focus in 2011 was on continuing to diversify our customer portfolio and entering new markets to expand upon an already robust geographic reach of nearly 20 countries. We have deepened our ‘global network plus local service’ strategy by establishing regional offices in our major target markets around the world, with the goal of providing customers with more reliable products and services.

From a technology perspective, we launched our new research and development center in June 2011. With the new R&D center, JinkoSolar aims to significantly increase its conversion efficiency for both mono- and multicrystalline solar cells.

JinkoSolar has recently rolled out Q-1 Solar Modules. How are they differentiated?

JinkoSolar Quantum-1 modules are produced using pseudo-mono multicrystalline cells, achieving the benefits of both mono- and multicrystalline cells and operating at higher cell efficiencies, all while maintaining JinkoSolar’s competitive manufacturing costs and long-lasting power performance. The Quantum-1 modules, with an array of 60 solar cells, can perform at up to 250Wp.

Our Quantum-1 modules present a greater value to customers than that of competitors through reduced hotspot effects, minimized color difference and strong resistance to extreme conditions. These modules are also covered by JinkoSolar’s extended workmanship warranty for a period of 10 years, versus the industry standard five-year policy.

You’ve recently launched a new Research and Development (R&D) center in China. What are you targeting to achieve with the new R&D center?

Our newly launched R&D center in China is dedicated to improving the conversion efficiency of our solar cells and next-generation PV technologies.

JinkoSolar believes that technology is the lifeblood of high-tech enterprises. The global PV market is growing rapidly and we know that to succeed in this industry, we must continuously invest in our technology to win the long-term trust of customers.

Will JinkoSolar introduce any new technologies in the near future?

Yes, JinkoSolar is committed to continuous product development and will be rolling out more new technologies; however, we are unable to provide more specific details regarding any future product announcements at this time.

What was your shipment target for 2011?

JinkoSolar was targeting a total of 950 to 1,000 MW in shipments for the year to a diversified customer base, which could represent 5% of worldwide market share.

What does your plan for future market expansion look like?

In the short to mid-term, Europe will continue to account for the largest portion of our market. We will consolidate our brand image there, maintaining European customers’ loyalty to our products. Countries such as Germany, Italy, Spain and France are the leading markets so far.

In addition, we are proactively exploring developing markets like the U.S. and China. For example, we recently established our sales offices in San Francisco and we are planning to open a new office in New Jersey in the United States, where we have hired senior local professionals in sales and marketing to better service local customers. In China, we are involved in several major initiatives to establish a foothold in this booming PV market. Also, our brand influence in other Asia Pacific markets like India and Australia is also growing considerably.

In an effort to diversify our customer base, we look forward to providing a complete solution jointly with our partners in order to better meet market demand, which is also the embodiment of our vertical integration advantages.

Taking a high-technology, high-efficiency solar cell and mass-producing it at low cost is key to mainstream adoption of solar. How are you innovating your way down the cost curve? What are you doing to bring the cost down to the mass-market rates?

Since JinkoSolar is a vertically integrated manufacturer, we are able to control the entire manufacturing process and achieve maximum cost-effectiveness in each phase.

Improvements have been made across the production spectrum. For instance, we introduced some modern management strategies, including lean production. In our pursuit of efficiency, we always attach equal importance to the well-being of our employees, creating a better working environment for our teams. We consider people as our most valuable assets: they are ultimately the source of technology innovation, cost reduction and efficiency improvements for JinkoSolar.

As stated above, we plan to increase our investment in technology research and development. R&D centers have been deployed in both of our manufacturing bases in Jiangxi and Zhejiang provinces, which are involved in high-end research and development of wafers, cells and modules.

What do you think is the next challenge facing you for further growth?

The next challenge we face in ensuring future growth is differentiating ourselves from our competitors and establishing our company as a top-tier supplier to customers around the world.

To capture market share, companies now have to focus on economies of scale, cost reduction, healthy cash flow and having a strong, trusted brand based on high-quality products and reliable service. At JinkoSolar, we’ve established a clear and consistent strategy in each of the areas mentioned above.

We have a solid financial platform and are continuing to strengthen our brand in the market, capturing the loyalty of well-known partners in major markets around the world. By continuing to do what we have been doing for the past few years, we believe we can successfully stand apart from our competitors and be recognized as a definite leader in the industry.

China is considered the leading PV manufacturing hub in the world. What will the PV manufacturing landscape look like in China over the coming years?

Over the long-term, I am quite optimistic about JinkoSolar’s standing in the Chinese market. The country’s PV benchmark electricity price was released on August 1, 2011, stating that the government will subsidize the development of the photovoltaic industry ─a significant milestone for the solar market. Over the years, Chinese solar companies have established their own brand awareness in Europe and America, and Chinese players still hold an important position in the world’s PV industry. The introduction of the benchmark price will greatly stimulate China’s local needs.

We expect the Chinese PV market to reach around 1 GW for 2011 and probably 2.5 to 3 GW for 2012. JinkoSolar is well-positioned to capture part of this growth thanks to the well-connected relationships with both provinces where we have our manufacturing facilities.

Jeanny H. Lim is Editor-in-Chief of InterPV. Send your comments to swied@infothe.com.

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