lecher dog, eat your heart out: Chinese scientist finds wealth in solar

http://news.yahoo.com/s/ap/20070422/ap_on_hi_te/china_sun_king

By JOE McDONALD, AP Business Writer
Sun Apr 22, 2:31 PM ET



SHANGHAI, China - Physicist Shi Zhengrong spent the 1990s in an
Australian lab studying solar power, a field he picked by chance. He
expected to devote his life to science.

Still, Shi saw signs of a blossoming industry as Germany, Japan and
other countries invested in cleaner power. Excited by a trip home that
showed him China's rapid development, he startled friends by abruptly
moving his wife and two Australian-born sons to his homeland in 2001
to launch a solar equipment company.

Four years later, Shi's confidence paid off when his Suntech Power
Holdings Ltd. went public on the New York Stock Exchange and
investors snapped up shares, turning him into a billionaire. Last
year, Shi ranked No. 7 on the Forbes magazine list of China's richest
tycoons, with a $1.4 billion fortune.

Today, he has traded his research smock for blue business suits, a
CEO's 63rd-floor corner office and a role advising the Chinese
government on renewable energy policy.

"We believed the share price would go up, but not so quickly," said
Shi, a 43-year-old with a boyish face, chuckling at what he says was a
rise marked by lucky breaks and timing. "I never thought I would be a
rich guy."

Shi is the leader of an emerging group of Chinese entrepreneurs who
are striking it rich by meeting fast-growing demand in China and
abroad for cleaner power.

They are getting a boost from China's efforts to curb environmental
damage after two decades of breakneck growth that have left it with
some of the world's most badly polluted air and water. Chinese leaders
also are promoting renewable energy in hopes of reducing mounting
dependence on imported oil, which they see as a strategic weakness.

"The technological prowess of China is growing a lot faster than
people in the West reckon," said Andrew Wilkinson, co-manager of a
fund at investment bank CLSA Emerging Markets that invests in Asian
clean-energy industries.

Suntech's 3,500-strong work force at four sites in China produces
photovoltaic cells, the delicate, hand-size black silicon panels that
can transform sunlight into electricity.

At a time when China's communist leaders are trying to turn lumbering
state companies into nimble global competitors, Suntech already goes
head-to-head with Japanese and European rivals in foreign markets. Shi
says all its technology comes from its own labs.

By last year, Suntech had risen to be the world's fourth-largest solar
cell maker, according to an annual ranking by Photon International, an
industry magazine. Japan's Sharp Corp. is the market leader and other
competitors include Q-Cells AG of Germany, Kyocera Corp. of Japan and
BP Solar, owned by British oil company BP PLC.

Worldwide, experts expect the industry's sales to grow by 20 percent
to 40 percent annually in coming years.

Suntech's key markets are Germany, Japan and Spain, which subsidize
renewable energy by requiring utilities to buy solar-generated power
and to pay more for it than they would for electricity from oil or
gas.

China accounted for just 10 percent of Suntech's 2006 sales of $599
million. The equipment is expensive enough that its use in the
company's home market is limited to lighthouses, remote military posts
and other sites far from power plants.

But Shi says the Chinese, U.S. and other markets will grow quickly as
governments respond to concern about global warming by rolling out
clean-energy initiatives. Beijing has ordered Chinese utilities to
generate at least 10 percent of their power from solar, wind,
hydroelectric and other renewable sources by 2010, with the target
rising after that.

Despite his science background, Shi talks like a tough-minded
businessman, and people in the industry say he is an able entrepreneur
who moves between East and West and the worlds of technology and
finance. He shifts easily between English and Chinese, and broke off
twice during a 30-minute interview to take rapid-fire calls on his
cell phone, first in the Shanghainese dialect, then in Mandarin.

"He comes across as a strong CEO who has a strong vision for his
company and the future of his industry," said David Edwards, an
industry analyst for ThinkEquity Partners in San Francisco.

Shi is part of a generation who left China by the tens of thousands in
the drab 1980s to study or work. They're now trickling back, lured by
its booming economy's new opportunities.

He is part of a growing group of returnees who are benefiting from
government support for technology and new protections for private
business. A few, like Shi, have become super wealthy by selling shares
in their ventures on foreign stock exchanges.

Shi works 10- to 12-hour days and spends eight months a year on the
road in Europe, the United States or China. But he said he wants to
devote more time to charity work, including an environmental education
program that he launched with his wife.

Shi said he has little time to enjoy his wealth.

"I'm a scientist," Shi said. "My hobby is solving technical
problems."

Shi arrived in Australia in 1988 to spend a year at the University of
New South Wales after getting his Ph.D. in physics in China.

China had little to offer, so when Shi's fellowship ended, he hunted
for a new post in Australia. A friend sent him to see Martin Green, a
New South Wales professor and solar pioneer. With no background in the
field, Shi talked his way into a job.

"I really got into solar power by chance," he said.

Shi took a job at a company formed to commercialize advances made by
New South Wales researchers. He and his Chinese-born wife bought a
house in Sydney. He became an Australian citizen in 1993, with no
plans to return to China.

"I never thought this solar business could take off or become
commercially viable," he said. "I thought I just needed to concentrate
on my research and publish papers to do my job as a scientist."

But in the mid-1990s, Shi started visiting China regularly to lecture
on solar power. Friends lobbied him to return to China.

At the same time, Shi was getting restless in Australia and wanted a
new challenge. He made a snap decision after a two-week visit to China
left him "really excited" about its potential.

"My life was too easy over there," he said. "I thought if I came back
I could do something really good."

The government of Wuxi, a city on Shanghai's western outskirts with
ambitions as a high-tech center, put up $6 million to finance Suntech,
which started with 20 employees, and helped to land $5 million in
research grants.

"A lot of scholars aren't successful (in business) because they don't
have a sense of marketing and sales," Shi said. "From the beginning,
we had a very strong sense, whatever we do we have to make money as
soon as possible, because there is no money for us to burn."

Suntech's main 120,000-square-foot factory is still in Wuxi, though
Shi bought out his state backers before the IPO with the help of
private investors led by Goldman Sachs.

At the Wuxi factory, technicians in green Suntech uniforms, surgical
masks and hair nets turn 4-inch silicon discs into solar cells.

The cells are coated with power-producing films and sandwiched between
sheets of glass in groups of 72 to form solar panels, each capable of
generating 175 watts of power. That is too little to power three
typical 60-watt light bulbs, but Suntech notes that it will light many
more energy-saving bulbs.

Production is growing so fast that just two years after the factory
opened in a special high-tech zone, Suntech is building a new one the
same size a block away.

Shi said Suntech's goal is to develop superior technology, not just
rely on China's low labor costs. But he said lower prices for skills
and equipment will give the company an edge by making its $20 million
annual research budget go further. A technical college graduate can be
hired for 2,000 yuan ($250) a month.

Shi said that as technology improves, Suntech hopes to be able to cut
prices within five years from the current $3.50 per solar panel to
$2.50 - a level that he said would compete with traditional power in
California, a big potential market.

Other Chinese companies are springing up to supply solar equipment,
wind turbines and pollution-control technology. A Chinese law that
took effect Jan. 1 - Shi helped to draft it - requires local
authorities to favor renewable energy. The government has ordered
power plants and factories to start complying with long-ignored
emissions standards.

Those initiatives will create opportunities in industries ranging from
wind turbines and nuclear power plants to pollution control and
raising crops needed to produce ethanol and other clean-burning fuels,
said Jing Ulrich, chairwoman of China equities for JP Morgan.

"It's so huge," Ulrich said, "no one can estimate the scale."

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