Day 4. Shenzhen. Tuesday 23rd Oct.


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Woke up at 6.30am to an SMS message from two people. A representative from a company not on my itinerary who sounded very promising, and the representative from yesterday’s “afternoon” company who said she would try to find me a cheap flight to Beijing so that I could spend another day in Shenzhen. I had no time for breakfast, the flight was about half price but only a few seats remained. I tried booking online but the airline would not accept VISA! So I asked the new company representative who gave me his complete credit card details to book it (I would pay him back in cash when I saw him).

It was a good plan that didn't work - because the online booking website was only in Chinese! By then it was 8am and I was to be picked up by my “morning” company at 9am and had yet to eat breakfast or get changed, so I asked my hotel to help with my flight. They agreed - if I had cash to pay them back immediately. This lead to another problem as I discovered my VISA account was empty! So I texted and emailed Nicole to do an urgent transfer - but she was not receiving the messages! In the end I voice-called her and she actually answered. All was solved. She transferred money immediately at 8.50am and I got and paid for the ticket from my hotel. This is the stressful fun that comes with travel abroad.

By then I just had time to get some ultra-sweet pastries for breakfast, but didn't get a chance to get changed - the company car had arrived and the morning clock was ticking!

Four things:
1. The car was a VERY impressive fully electric mini-van.
2. The company I was meeting with actually MADE that mini-van.
3. The trip was an hour.
4. The driver was alone and didn't speak a word of English.

The drive itself was a jaw-dropping trip along the very hilly lush green coast of Goungdong on a wide freeway that literally cut through the hills in tunnel after tunnel. We went past seaside resorts and some very high-end houses, but always present were huge numbers of high-rise apartment buildings and gigantic industrial factories. We went past a port that looked every bit as big as Singapore with a fleet of large ships waiting offshore like little fishing boats. The scale of everything in China takes a long time to get used to.

We arrived at the company which was in the middle of another Shenzhen satellite town/city. The company grounds were larger than I could see. If yesterday’s was big (and it was), it was dwarfed by this. And like yesterday’s almost all employees lived on site. In this particular factory (of about eight factories the company operated across China) there were 40,000 workers. The company started in 1995 with 20 workers, and now had approximately 180,000. There was an LED banner across the lobby door "Welcome Keppel Prince to [Company Name]“. Ah nice.

I was met at the lobby by two members of the company’s client relations team. Both young and highly educated ladies again. The lobby went into two product display showrooms. One for cars and one for electronics and other products. But first we went to one of the dozen or so client reception/meeting rooms. In fact every day multiple clients from around the world (mainly Europe) visit this company and I was apparently lucky to be picked up by a driver.

To business. The lead representative lead the discussion and was very direct. They knew my company Keppel was from Singapore and knew that Keppel had an annual turnover of US$10 Billion. That impressed them, but the Keppel solar operations did not appear to contribute much at all to that turnover. They told me their own company turnover was also in US$billions each year, and they did want to do business with Keppel even on solar at the small scale as it could be used to start to build a larger partnership. I explained why I was there and my focus on small scale grid connect solar with energy storage. The company had already done extensive research into the Australian market and knew in detail about STCs and the FiTs in each State. They already had a 3kW system that was fully capable right now to do what we wanted, which had Lithium batteries of 9kWh. It was ideal but the price was not available to me until a mutual non-disclosure contract had been entered into. They were already doing pilots in Europe with that system.

I explained the Australian solar situation from my perspective and they took notes. I was able to clarify some things for them and their research did have some holes in it that I was able to explain - which was appreciated. The bottom line I said was that if ANYONE wanted to keep selling medium/large household systems in Australia, they would need to keep a 3kW total installed system cost below $12k, and a 5kW system below $18k even including batteries and controllers. We discussed this in detail and they did understand - but they said they could not see how the target prices could be achieved while delivering inverter/controller/battery/case systems together with panels and installation with a company margin.We would talk more about it after a tour of the factory.

The tour. Again, I'm just not used to the scale of things in China, and the scale of this company felt like a mirror of China itself. To kick off, I was informed that a certain American multi-billionare had recently bought a 10% stake in the company.

We started with a company introduction video. It was quite surprising, as it included a brief history of the human civilization with an emphasis on the industrial revolution, the two great wars, and the stupidity of mankind to be unable to progress without harming the environment. The company saw itself as being built to respond to two crises - Peak Oil and Climate Change and their company vision was centered on helping to provide technologies to address these global problems. Yes I liked the video.

We then jumped in a movie-set style open air electric mini-bus, and drove around some of the factory. It was really more of a city than a factory, and somehow reminded me of the movie "The Truman Show". We visited their 1MW onsite solar farm with utility-scale energy storage (which was installed just to test equipment and was constantly being rebuilt). A quick word on their EVs. They have a range of 300km and are available in China for $40k.

Then went to lunch in their own client restaurant in their own client hotel. Yes its five-star. And no I wasn't invited to stay in the hotel - although Bill Clinton and others like him had done so. By the way the dumplings were delicious! I gave them a Boomerang which they thought was nice. "Very Eco-Friendly and very Australian".

We had a quick discussion of where-to from here. They would check our requirements in detail and see what they could do. But the representative stressed that they would not drop prices. All up my impression of the company was that it was very impressive but may not be a perfect match for my needs. I didn't feel I would have a voice to have products tweaked to my needs (and prices). Rather, I would need to use what is being developed for the world market, and buy what was available.

After the meeting they were conscious that I had another company meeting and I was whisked back into the car and was driven back to my hotel. I had 20 minutes to spare until the next scheduled pick-up, but the representative was already there with her driver. I asked for 10 minutes before leaving to get another gift and freshen-up, and we hit the road again.

This company was the complete opposite to the last. Quite small with about 300 employees in two small factories in dusty areas of another of Shenzhen’s satellite industrial cities. The factory was old, cramped, and looked far more disorganized. But they did have some surprises.

First off, they had formed a partnership with a US solar giant to build high efficiency (22%) panels. How this came to be was the US Govt tariffs on Chinese imports left a loophole which allowed panels to be assembled in China if cells from the US were used. So the company I was visiting could supply these panels back into the US, and would directly sell them to anywhere else in the World. The price were high however and she would not elaborate further.

Also, the company also already had hybrid systems ready to sell for VERY good prices. For example, their 3kW systems were similar to the last, but these systems came with 3.6kW of panels (and rails, etc), plus 20kWh of energy storage - twice the battery capacity of the last company. They were being built for the very large/reputable Italian company Beghelli, but would be more than happy to customize a system to suit me and the Australian market.


She took me on the most detailed tour I'd had of a factory yet. VERY up-close to workers cutting, assembling, and flash-testing the cells and modules. It was excellent but quick (a small factory). We then talked more about supply and where to from here. The owner of the company came in to meet me at this point, but could not stay.

In a nutshell, they would put a system configuration together as I needed it, in either lead-acid or lithium batteries. If I was happy to purchase a small number (5 or 10) of systems. The company would pursue Australian accreditation which like the other companies they also did not have. I gave her a Boomerang and the first reaction was "What am I supposed to do with this?". But after explaining she did appreciate it and returned with some gifts herself - two solar powered toys for my sons (I couldn't break it to her that my teenage boys would be less than impressed as they'd think they were baby toys...)

It was then 4pm. Too early for dinner so I was driven back to my hotel by the driver with the representative so not to get bored. We talked about business and life in China. Again - I was almost numb with the scale and reality of China. Each year millions and millions of kids graduate from high school. Most will do 60 hours per week of schoolwork to try to attain a spot in one of China’s few universities. Only 0.5% can get into University - and everyone I was meeting was one of those 0.5%. What’s more, the salary for these incredibly educated, intelligent (and nice) people was about AUD$3.50 per hour. The factory workers get about half this and rural workers about half again. She told me this as a deadpan matter of fact, and followed with “But we also understand that people from the West like yourself are here purchasing from China because of this. This is how things need to be to work.” She smiled the whole way through this conversation. Low wages are fine while things are cheap but inflation is rising much higher than wages. Life is very hard for an incredibly large group of people, and I started to understand that I was seeing the more much more well-off.

We got back to the hotel at 5pm and said goodbye. I went for a 40 minute run full of thought and spent the evening exploring a web of tiny dark alleyways which were very cool, but also smelly at times. But I loved it. I also went back across to the huge mega-mall for a couple more bargain gifts for Nicole and my boys, before having dinner again at the same restaurant as my first night. Then went back to my room to write this and book accommodation in Beijing.

Bed at 12.45am.

 

Day 5. Shenzhen - Beijing. Wed 24th Oct. >>