Q: What kinds of measures will you take to return to profitability in the (money-losing) solar battery business?
Katayama: Most of the loss in the solar battery business comes from overseas markets. In the Japanese market, it is turning a small profit. Especially, the unit price of solar batteries dropped by 40% in Europe (which was the major market for solar batteries). When combined with the impact of currency exchange rates, the sales price of our solar batteries decreased by about 50%.
The demise of the European market due to the financial unrest had a profound impact on us. Without eliminating such deficits in overseas markets, it is impossible to return to profitability in the solar battery business.
The business model of producing solar batteries in Japan and exporting them to overseas countries is no longer profitable. We will thoroughly focus on local production for local consumption. We are now preparing for it and started to ship products from the production line for thin-film silicon solar cells in Italy in December 2011 (Sharp has already started to produce crystalline silicon solar cells outside Japan).
Furthermore, we will aggressively incorporate downstream businesses such as power generation. In Japan, we expect that demand will come back in or after July 2012 (when power companies will begin to buy all electricity generated by private companies in Japan). We want to restore profitability to the entire business in fiscal 2012.