July 10, 2014 12:00 am JST

Yingli Green Energy 'indispensable' for Brazil

TETSUYA ABE, Nikkei staff writer and KENJI KAWASE, Nikkei deputy editor

Yingli installed solar-powered smartphone chargers in Maracana Stadium in Rio.

BAODING/MACAU, China -- Chinese characters have been appearing on the advertising boards at the World Cup. They belong to Yingli Green Energy, the world's largest manufacturer of solar cells.

     In April, around 50 Chinese and foreign reporters gathered at a hotel in Baoding in northern China, to hear Miao Liansheng, chairman and CEO of Yingli explain his company's global strategy.

    The meeting, held near Yingli's headquarters, touched on its World Cup advertising strategy. "If China should host a World Cup in the future, under blue skies, and we will be an engine" for clean air, Miao said, acknowledging the heavy smog outside.

     "We have become the first Chinese World Cup sponsor to enhance interest in solar energy and sustainability among people around the world," Miao added.

     An official from the Brazilian Embassy in Beijing was at the briefing. He said that cooperation with Yingli was "indispensable" for making Brazil a more environmentally friendly country.

     In TV broadcasts of this year's World Cup finals the occasional Chinese advertisement on the pitch's sideline reads "China Yingli, solar power to homes." This is the second time for Yingli to be a World Cup sponsor.

     According to Judy Li, Yingli's vice president in charge of global marketing, "Over 2,000 media reports increased our exposure, which accounted for $10 million worth of advertisements."

     Although not official, Yingli is estimated to have spent a total of $70 million as a sponsor of the World Cup in Brazil. The sponsorship is hardly cheap for Yingli, which has been in the red for three years running.

     But Yingli made the deal with expectations that Latin America will be a huge market for solar power. In 2013, 86% of Yingli's sales came from three main markets -- the U.S., Europe and China. The development of the Latin American market holds a major key to its sustainable growth in the face of unfavorable developments, such as a plunge in demand in Europe, where solar power bubbles have burst.

     The solar panel business may still be in a nascent stage, but in the world of automobiles, China is already a major player, and is even starting production in other countries.

     Jacarei, a city of 200,000 people near Sao Paulo, used to be known as the "capital of beer," but not so much anymore. Today, it is increasingly called "China Auto City."

     Chery Automobile in 2011 started the construction of a plant on a 1 million-sq.-meter plot at an industrial park in Jacarei's suburbs. The $134 million plant is expected to initially punch out 50,000 vehicles per year.

     The Chinese automaker recently decided on an additional investment of $400 million to expand the production line at the plant. As 80% of facilities have been completed, the launch of manufacturing operations is a matter of time, according to Chery.

     Chinese-made cars sell well in Latin America, which prompted Chery to make its Brazil investment.

     As Latin America has no homegrown automakers, there is much room for Chinese cars. Other Chinese makers -- JAC Motors, Geely Automobile and Great Wall Motors -- are also constructing new factories in Brazil and marching into other Latin American markets.

     Vehicle exports by Chinese makers to Brazil increased 19% from the previous year to 286,500 units, accounting for 30% of total auto exports from China. Latin America is now the biggest export market for Chinese automakers.

Historical advantages

To expand its cordial business relationship with Brazil, China seems to be eager to use all methods available. This includes China's boast that it is part of the Portuguese-speaking family of nations.

     "The Chinese side is encouraging companies with capabilities to invest in Portuguese-speaking countries," Vice Premier Wang Yang said in November. Wang was speaking in Macau at a ministerial conference between China and seven lusophone countries, which Brazilian Vice President Michel Temer also attended.

     This was the fourth such meeting since the framework was set up in 2003. Macau was a Portuguese colony until 1999, and Portuguese is one of the three official languages. Colonial past used to be a humiliation for Chinese, but now it is a tool to prop up business.

     The World Cup final is to be held on July 13 at the Maracana Stadium in Rio de Janeiro, and Chinese President Xi Jinping will be in the crowd. On the stadium's roof are 1,556 solar panels made by Yingli. Heritage and politics are assisting Chinese companies in turning the country's businesses into winners in Brazil.