Solargiga to lift capacity
Solargiga Energy Holdings Ltd is to raise its total capacity for monocrystalline silicon solar ingots and wafers by 50 percent this year to meet rapidly growing demand.
The Hong Kong-listed group’s production capacities of monocrystalline silicon solar ingots and wafers are expected to reach 1,200 Megawatts (mW) and 900 mW by the end of 2011, compared with 800 mW and 600 mW production capacities as of the end of 2010, Solargiga’s Chief Executive Officer Hsu You-yuan told reporters after an extraordinary general meeting held in Hong Kong Wednesday.
“By lifting the productivity of multicrystalline silicon, the group’s total production capacity of silicon solar ingots and wafers (including monocrystalline and multicrystalline) this year will reach 1,700 mW and 1,400 mW by the year end, which, is still unable to meet the demand of clients both from China and abroad,” said Hsu, adding that capital expenditure this year will remain in a range of 300 to 500 million yuan, the majority of which will go to expand production capacity.
And as part of its long-term development strategy, the company is also working more with foreign clients. About 38 percent of total orders as of the third quarter in 2010 were from overseas, compared with 20 percent in 2009.
Tan Wenhua, Solargiga’s president, said that since contract prices with foreign clients are normally 2 to 3 percent cheaper compared with local companies, the move will inevitably cut into its gross profit margin.
“But the adjustment of our client structure is necessary as we are committed to expanding the market,” said Tan. “Our current gross profit in the third quarter stood around 30 percent, but I believe in a mature industry, a gross profit margin of between 15 and 20 percent is healthier, as product prices will continue to fall on improved production techniques.”
Tan also welcomed the stricter rules for polysilicon factories announced by the Ministry of Industry and Information Technology on Tuesday. It announced that new factories must be able to produce more than 3,000 metric tons of polysilicon a year and meet certain efficiency, environmental and financing standards. Those existing plants that don’t comply with the regulations will be shut down by the end of the year, according to the ministry.
“The high threshold is good news for companies like us with advanced technology, which will promote technology upgrading and cost reduction in the whole industry,” said Tan.
Hong Kong-based Solargiga is currently the second-largest maker of monocrystalline silicon products on the mainland, with plants in Shanghai and Jinzhou, Liaoning province.
According to its third quarter report, company turnover surged 175 percent to 1.3 billion yuan for the nine months ended September 30 compared with 472.7 million yuan a year earlier. Net profit stood at 123 million yuan, compared with a loss of 106.8 million yuan during the same period in 2009.
In July 2010, Solargiga acquired a 51 percent equity interest in Qinghai Chenguang New Energy Co Ltd for the construction of production lines for monocrystalline silicon ingots. The company said it will become the largest manufacturer of monocrystalline silicon solar ingots in the world by the end of the second quarter of this year when the new manufacturing line is put in use.
Shares of Solargiga closed at HK$1.81 in Hong Kong trading Wednesday, unchanged from the previous day, compared with a 0.23 percent gain on the city’s benchmark Hang Seng Index.
China Daily
(HK Edition 01/27/2011 page3)
http://www.chinadaily.com.cn/hkedition/2011-01/27/content_11923725.htm