Sunpower's new focus on clean coal

China's moves to fight air pollution are providing a multimillion-dollar opportunity for the Singapore-listed Sunpower Group.

The company, which specialises in heat transfer technology, will deliver three clean coal projects in China worth more than 1 billion yuan (S$209.3 million) in total by next year.

Sunpower chairman Guo Hongxin told The Straits Times: "Our focus now is on the market for clean-coal-fired boilers and centralised steam plants, because that's a $108 billion market that is very new."

While competition is fierce, China-based Sunpower has managed to get its foot in with the big boys by riding on the proprietary technology that it has developed over the past 20 years.

Last December, Sunpower won its first project to build, own and operate a centralised steam plant that will support 70 factories at a sprawling industrial park in Gaoyang, Hebei. The 30-year contract is on track to bring in revenue in the first quarter next year.

Prof Guo’s company will deliver three clean-coal projects in China worth more than 1 billion yuan (S$209.3 million) in total by next year.

Professor Guo, who was in town for Sunpower's annual general meeting last week, said: "In the beginning, the local government didn't trust us; they wanted to get a larger company to run it. That company said they would need to build two plants because they didn't have the technology to transfer the heat efficiently over long distances.

"That's when the government engaged us, and we said we could do it with just one plant."

Prof Guo said more of the firm's revenue will come from similar projects from next year. Right now, Sunpower derives most of its turnover from building pipes and energy-saving equipment for multinationals such as Sinopec, Shell, BP and BASF in Singapore.

Technology is Sunpower's main edge, and the firm pumps 3 per cent of revenue into research and development each year. It has about 2,000 staff with an international team of more than 200 dedicated to research.

Prof Guo himself is a part-time professor at Nanjing University of Technology, where he teaches chemical engineering.

"My dream was to put our inventions in school into production, and I was the head of research so I told them I wanted to start a manufacturing plant, but they said no. So I left and set up Sunpower.

"And because I had classmates and students who worked in big multinationals after graduation, I would tell them when I had a good product, do you need it?

"They were willing to use our products. That's how we grew from seven people in 1997 to 2,000 now," said Prof Guo.

A version of this article appeared in the print edition of The Straits Times on May 03, 2016, with the headline 'Sunpower's new focus on clean coal'. Print Edition | Subscribe