Nitol: Russia's Emerging Solar Power Star

Nitol Solar started making polysilicon for solar panels almost by accident. Now it's helping Russia become a force in the industry

By Jason Bush

Nitol co-founder Dmitry Kotenko shows off the company's polysilicon, used in the production of solar power cells. Nitol

Dmitry Kotenko admits that when he and a group of friends decided to found their own business in 1998, they had no idea what exactly the new business would do. They knew only that they wanted their business to be New, Innovative, and Technological. Hence the name: Nitol.

Ten years later, Nitol has not only a techie-sounding name but also a dynamic business to match. Now called Nitol Solar, the company is Russia's largest producer of polysilicon, the basic raw material used to make solar panels that turn sunlight into electricity. Nitol stands out as an all-too-rare commodity in Russia: a technologically savvy company that has grown in the space of a few years from tiny startup to billion-dollar success story. It's a model that Russia's leaders say they are eager to promote as the country casts around for new ways to achieve economic competitiveness in the 21st century.

Lately, nothing seems to have captured the imagination of politicians more forcefully than alternative energy. In an interview with CNBC host and BusinessWeek columnist Maria Bartiromo on June 4, President Dmitry Medvedev emphasized the importance for Russia of "cutting-edge technologies," especially in "green economy, energy saving, and energy efficiency." It's a theme both he and Prime Minister Vladimir Putin increasingly have emphasized in recent months.

Solar energy in particular is emerging as an area where Russia has high hopes of carving out an international niche. The Russian Nanotechnology Corp. (Rusnano), a state company with ambitious goals for promoting high-tech exports, has identified solar energy as one of its priorities. In its biggest deal to date, in June, Rusnano partnered with Renova, a leading Russian industrial conglomerate, and Oerlikon (OERL.MU), a Swiss engineering firm, to announce plans for a $630 million solar cell plant in the central Russian town of Novocheboksarsk. It's just one of a dozen solar-related projects currently being mulled or expanded by Russian companies.

In Search of an Industry

Nitol Solar's story illustrates why there is such excitement about the sector's potential. Kotenko, 38, a former student at the prestigious Baumann Technical Institute in Moscow, had ditched science in the 1990s for the more lucrative world of business. But after garnering managerial experience in the banking and metallurgical businesses, he had a hankering to bring this knowhow to bear back in the scientific field. "I wanted to find something new and extremely interesting. Above all, it had to be competitive," he says. Just what, though, wasn't immediately clear.

The answer came rather by chance some five years later, when Nitol, at that time a chemical trading company, had an opportunity to acquire an old chemical factory at a knockdown price. Located near the remote Siberian city of Irkutsk, the 70-year-old plant didn't seem to have much future. Kotenko says the plant, located hundreds of miles away from any significant markets, "was in terrible shape."

But it did have one thing going for it: A small unit at the plant produced a chemical called trichlorosilane that's used in the industrial processes and is also a key ingredient in polysilicon for solar panels. Kotenko and his partners realized that if the plant were to have a commercial future, it would have to refocus away from mass-produced industrial chemicals and toward the higher value-added solar industry. They set about educating themselves about the renewables business from scratch. "We realized it was like another world," Kotenko says.

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