Showa Shell Sekiyu, Japan’s fifth-biggest oil refiner, plans to invest up to roughly 320 billion yen ($3.38 billion) during 2010-2014, half of it on oil and the rest on solar panels, its president said on Tuesday.
The firm, which has been considering boosting its solar plant capacity to 1,000 megawatts from 80 megawatts by 2011, aims to turn solar to profitability by around 2012, and grow the business to generate half the core recurring profit goal of 100 billion yen in 2014, Presient Jun Arai told reporters.
The 2014 recurring profit goal is more than double the recurring profit excluding the inventory valuation effects of 45.6 billion yen it earned in 2008.
Showa Shell is betting on its solar cells that use copper and indium instead of pricey silicon, most commonly used in solar panels, and hopes to attain a 10 per cent market share by 2014.
Showa Shell regards First Solar Inc of the United States, which makes cadmium telluride photovoltaic solar panels that are cheaper to produce than silicon-based cells, as a major rival, but it said it projects a wide application of its products because its panels do not use toxic cadmium.
Arai and Showa Shell Chairman Shigeya Kato said that the company may consider a reduction in its group refining capacity, which currently stands at 515,000 barrels per day, in 2010-2014 as the government expects domestic oil demand to fall 3.5 per cent per year on average over the next five years.
Arai told Reuters after the briefing that the company boosted its oil product export capacity at its 210,000 barrels per day Yokkaichi refinery last year and that it does not plan to further boost capacity on its own efforts in the future.
The company’s current export capacity stood at about 5 million kilolitres a year (86,000 bpd), Arai said.
He also said it will keep its business tie-up with Fuji Oil Co intact, in which it acquired a 6.6 per cent stake in 2005. Fuji Oil, refining unit of AOC Holdings, supplies its oil products to Showa Shell.
Royal Dutch Shell and Saudi Aramco are two of the major shareholders in Showa Shell with about 35 per cent and 15 per cent stakes respectively.
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