REC Silicon plans China poly-plant
REC Silicon has unveiled a deal that will see it establish a new polysilicon factory in China with a local partner, in a move that will defuse concerns about the steep duties the company faces in the world’s largest polysilicon market.
The deal will see REC Silicon form a joint venture with Shaanxi Non-Ferrous Tian Hong New Energy Co., which is part of a conglomerate with assets totaling more than $17bn.
REC Silicon will transfer its industry-leading fluidized-bed reactor (FBR) polysilicon-production technology to the joint venture, for which Shaanxi Non-Ferrous Tian Hong will pay it $198m.
The two companies will then use the FBR technology at a new 19,000-metric tonne polysilicon factory planned for Shaanxi province. REC Silicon will hold a 49% stake in the joint venture, with Shaanxi Non-Ferrous Tian Hong holding the remainder.
REC Silicon expects to sell 19,400MT of polysilicon this year, underscoring the magnitude of the China deal.
Last month Beijing reaffirmed its 57% anti-dumping duty on REC Silicon’s product, although the company has largely been able to work around the duty thus far via the so-called “Process in Trade” loophole.
Over the next three years, REC Silicon will contribute $244m to the new factory’s construction, with Shaanxi Non-Ferrous Tian Hong to stump up $254m.
Each company will nominate two members to the joint venture’s four-person board of directors.
The two companies will also form a separate joint venture dedicated to selling both polysilicon from both the new Chinese factory and from REC Silicon’s existing factories in the US, with their respective capital contributions yet to be determined.
The deals represent a “key step in the worldwide growth of REC Silicon and will strengthen its leadership position in the industry”, claims chief executive Tore Torvund.
Shares in Oslo-listed REC Silicon were up nearly 10% in early trading on the news.
More than half of REC Silicon’s revenues last year came from China, where domestic producers have not yet managed to replicate the quality and price of foreign rivals like REC Silicon and Hemlock Semiconductor in the US and Wacker Chemie in Germany.
Global demand for polysilicon will rise 25% this year, to 282,000MT, as PV manufacturers once again begin expanding, predicts NPD Solarbuzz.