Yingli Solar helping light up FIFA venues

The signing ceremony for Yingli Solar to sponsor the 2014 World Cup in Brazil is shown taking place in June 2011.The company hopes to penetrate uncharted markets via the event. Provided for China Daily

In sponsoring event, company also hopes to up its profile

It might seem odd to associate a Chinese solar panel maker with big name backers of the FIFA World Cup that starts next month - McDonald's Corp, Coca-Cola Co and Budweiser - especially when the country's team didn't qualify.

But Yingli Green Energy Holding Co Ltd, known as Yingli Solar, sponsored the 2010 World Cup in South Africa and will do so in soccer's showcase this year in Brazil. It is the only Chinese company, and the first renewable energy firm, to do so.

The company hopes to penetrate uncharted markets via the event.

In a business-to-business industry, it is not regular consumers who choose the solar panel brand; installers do.

Still, is it really worth it for Yingli to attract average consumers through such a money-burning event, when the company itself has posted consistent losses and has been unable to recover while its counterparts have?

Miao Liansheng, the founder and chairman of the Baoding-based company in Beijing's neighboring Hebei province, said the lackluster performance is mainly due to management problems and low margins.

"As we shifted to downstream solar businesses like utility-scale solar projects, module prices started to recover," he said. "Our profitability is increasing."

Profit is expected in the second quarter, he said.

The global solar panel industry is reviving after a time of overcapacity. Yingli Solar said it plans more marketing campaigns during and after Brazil's World Cup, targeting a wider consumer group. The company is moving toward so-called distributed solar. That includes rooftop panels and other small installations.

Chief Financial Officer Wang Yiyu said that for that reason, it is worth every penny spent on sponsorship.

"We are not a toothpaste maker or any consumer goods company, so it is hard to predict the immediate benefit from sponsorship," Wang, a former senior auditor at PricewaterhouseCoopers LLP, said. "But we are sure about one thing - the power of our brand is improving, and we are close to our target of becoming a household name."

China plans to install 14.5 gigawatts of solar generating capacity, of which 8 GW would be from distributed solar energy. It means more people will be able to turn their roofs into a solar module using these solar cells, according to the National Agency of Energy.

Yingli is betting on the fact that out of more than 700 million viewers of the World Cup, some will remember its brand. The company will place its logo on digital billboards lining the World Cup pitch. It isn't clear whether this creates enough awareness to justify the cost, but Yingli said orders for solar panels tripled in 2011. During the South African World Cup, shares of the US-listed company surged nearly 50 percent, adding $600 million.

Judy Tzeng, vice-president of global marketing at Yingli Solar, said the industry has not achieved full mainstream penetration or become a household name at home.

"People in Europe are fascinated with soccer. One of the reasons that we chose to sponsor a soccer event is because Europe has been a traditional market for solar makers and we plan to use football sponsorship to win the consumers there as well as people in emerging markets such as Brazil and South Africa," she said. "At the same time, football is a universal game, loved in many other places, such as the US and Japan."

Many solar companies are turning to the emerging solar markets in South America and Asia, where Japan and China take up the slack from the European solar market.

Yingli has also sponsored US MLS soccer, German football club team FC Bayern Munchen AG and the New York Jets US football team.

"We are looking to bring global attention to not just Yingli but Yingli Solar, a message carrying clean energy to every place of the world," Tzeng said.

As part of its work in Brazil, over 1,500 Yingli Solar PV modules will be placed on a metal ring encircling the top of the Estadio do Maracana, in Rio de Janeiro. South America's largest stadium holds over 70,000 spectators and will host seven matches in 2014, more than any other venue.

"Sustainability is one of the key tenets in our vision for the 2014 FIFA World Cup," said Federico Addiechi, head of Corporate Social Responsibility at FIFA, the world-governing body for soccer. "We hope this landmark project will be the catalyst to spur other football stadiums to install solar PV systems across Brazil."

Yingli Solar, the world's largest manufacturer and supplier of solar panels, plans to increase its shipment volumes to about 4 GW of installed solar panels in 2014, an increase of 27 percent over the previous year. It forecasts gross margins will triple to between 15.5 percent to 16.5 percent in the first quarter compared with a year earlier.

People in Europe are fascinated with soccer. One of the reasons that we chose to sponsor a soccer event is because Europe has been a traditional market for solar makers and we plan to use football sponsorship to win the consumers there as well as people in emerging markets such as Brazil and South Africa. "