Frank Asbeck solar billionaire
Frank Asbeck can afford to look on the sunny side of life. The 48 year-old chairman and founder of Germany’s SolarWorld has delivered shareholders a return of more than 10,000% in the past five years -- the best performance by a European company with significant family ownership, according to Credit Suisse. The 25% stake in the business held by the Asbeck family was worth about €1bn at the end of April.
While the share price has benefited from investors’ infatuation with alternative energy stocks, Asbeck has proved himself a bold and ambitious business leader. Takeovers have transformed the company, from the acquisition in 2000 of a solar wafer manufacturing plant in Freiburg, east Germany, previously owned by Bayer to the deal to buy Shell’s crystalline solar operations two years ago.
Asbeck, who founded SolarWorld in 1998 and floated it the following year on the Dusseldorf stock exchange, believes the family ownership structure has given him the freedom to pursue and consummate such transformational deals.
“In family owned companies decisions are quicker to be made,” he said in an email exchange. “This is an advantage in business, where a quick decision can generate lots of money for the company. Boards that are discussing too long fail to gain opportunities.”
SolarWorld focuses on the manufacture of solar wafers and the production of cells and modules which are then installed as solar panels. While the price of modules could halve over the next five years, as production becomes more efficient, Edward Guinness, co-manager of an alternative energy fund at Guinness Asset Management, said SolarWorld’s focus on wafer production should be an advantage: “It is a stage in the manufacturing process that will probably continue to be something of a bottleneck.”
He believes Asbeck will be able to keep growing the business at a rate of 25% a year. “Sustaining growth, for them, should be easy,” said Guinness, whose fund invests in SolarWorld. He points out that if solar power grows to provide 5% of the world’s electricity, it will take a further 15 years of growth at an annual rate of 35%.
Asbeck may be operating in a fast-growing sector, but his aggressive, entrepreneurial approach is far-removed from the low-profile, conservative family ownership model typical among the companies that make up Germany’s Mittelstand.
Asbeck has been innovative in other ways. The employee share ownership scheme at SolarWorld is regarded as one of Germany’s best. Last year, he founded an ethics council and launched the Solar2World initiative to take solar power to Africa.
“Solar energy is adequate to meet the energy needs of Africa and Asia, so we want to support that,” said Asbeck. “For us the sense of making business is not only to make money and to be economically successful, but also to be engaged ethically. By being so we can help making solar energy more popular, which is also good news for our business.”
He is confident of being able to sustain the remarkable growth delivered by SolarWorld in recent years although agrees a shake-out in the alternative energy sector is inevitable.
“Although the demand for clean and sustainable energy is rapidly rising, not all of the alternative energy companies will survive,” he said. “I expect a process of consolidation.”
Asbeck recently announced SolarWorld was building its first production plant in Asia, a joint venture in South Korea. Tapping the expected demand for solar energy in China, India and South Korea will be vital if SolarWorld is to maintain annual revenue growth of 30%. Asbeck said Spain, Italy, Germany and the US were the company’s more-established core markets.
In many ways he is typical of the contemporary entrepreneur who is not setting out to build a multi-generational family business. “As long as I am in control, the family will remain in a powerful position in SolarWorld,” said Asbeck. “What future generations will decide, I cannot say.”
del.icio.us
Digg
Newsvine
reddit
StumbleUpon
