Polaris solar PV net news: resources in Erdos, Inner Mongolia company limited (hereinafter “Ordos”) holding subsidiary–Inner Mongolia eerduosi polycrystalline silicon industry Co Ltd (hereinafter “company”) has disclosed, will restart the polysilicon project was discontinued four years.
News announcement immediately triggered heated debate. Industry questioned in the PV industry of increasing demand and production capacity now, restart production project in Erdos will polysilicon market turmoil, causing prices to fall further. In this context, Ordos contrarian layout polysilicon or there is a big risk.
For the above question, November 29 call Erdos, General Manager of the company said, a staff member of the Office, company recently did in the original 3000 tons polysilicon project was carried out on the basis of expansion of production with an annual output of 80 million tons. As to whether the projects previously losses, losses, as well as expansion project received the Government’s approval, you need to provide written documentation from the leadership before they can return. But after a reporter wrote to, as of press time has not received any official response in Ordos.
Polysilicon project stalled for four years
Above polysilicon projects in many industries in the Ordos is ill-fated.
Public information, in April 2008, the Ordos established company, formally into the polysilicon industry. In accordance with the layout, constructed in many phases of the project construction, including a project with an annual output of 3000 tons, containing molten polysilicon 1000 tons, circuit level 1000 tons of polysilicon, polycrystalline silicon for solar cell of 1000 tons. Ordos also have great expectations for the project and expects normal production year can be added 1.68 billion yuan of sales revenue can be added after tax profits of 543 million Yuan.
“Indeed, according to the plan, the company first furnace of polycrystalline silicon project at the end of September 2010, but produced products are not competitive in the market, sales are sluggish, so two years later, on May 1, 2012, the company decided to suspend the polycrystalline silicon project. “Erdos said one who declined to be named, the company does have the upper hand on the procurement of raw materials, but the polysilicon industry needs technical support, if the technology is not up to, then the failure is inevitable.
However, the Erdos public information makes no mention of the previous. Erdos once said, polycrystalline silicon project was suspended, because in the years after 2009, United States two crisis, European debt crisis systemic risk impact, quickly formed a sniper of China PV industry in the international market trend, Silicon market price lines plunge, Erdos had to be “broken wrist bleeding” suspended poly silicon project.
While polysilicon project was suspended, but the company has been in four years at huge cost, up to hundreds of millions of Yuan each year. Ordos Insider above.
The people at the press conference was confirmed in the subsequent investigation. Public information, by the end of September 2016, total company liabilities 1.948 billion yuan, mainly dealing with raw materials and engineering equipment of 198 million Yuan, cover shareholder liquidity 1.349 billion yuan in principal and payable by shareholders into interest income arising from liquidity loan of 360 million Yuan. This includes: company working capital borrowing of 512 million Yuan, 134.34 million Yuan as of September 2016 calculation of interest; cashmere group cash flow borrowing 496 million Yuan, interest at the end of September 2016 129.08 million; and metallurgical company working capital borrowing of 341 million Yuan, interest at the end of September 2016 96.67 million Yuan.
In addition, the reporter also noted, in a recent report issued by the China Securities Regulatory Commission on the Ordos administrative project review of comments mentioned in the notice, polysilicon companies were suspended in May 2012 line by the photovoltaic industry slump and goes into power production. But late in 2013 and 2015, respectively, “3000 tons/year of solar grade silicon” groups of related assets provision for impairment of 122.281 million Yuan, 106.7477 million Yuan.
“3000 tons/year of solar grade silicon” groups of related asset impairment test method, test procedure, selection of key parameters, CSRC hopes Ordos to comparable listed companies in the same industry conditions that provision for the adequacy of the provision for impairment. But Erdos has applied to the China Securities Regulatory Commission delayed response, so there is no seeing the company’s formal explanation on these issues.
Tide expansion has been questioned
Or perhaps because the company generates billions in cost pressures, Ordos had to restart the project, so as to activate the polysilicon project assets. The sources said, the problem is, expansion of 8000 tons/year, the project can make profit is the key.
In addition to questions about the future earnings expectations were beyond insiders also questioned during the investigation process the project approval procedures or “defective”. For example, the Ordos company still take rent on brothers power metallurgy plant of the group.
In this regard, the said Office staff, Ordos, current company does power metallurgy plant of the group, but for company promotion of 8000 t/polysilicon project by government departments, the relevant procedures, but did not respond.
Even underdog, Ordos 8000 tons of polycrystalline silicon expansion project was started on November 21, 2016. The polycrystalline silicon industry in Ordos, Inner Mongolia, limited annual production capacity of 8000 tons of high-purity polycrystalline silicon material technology, low energy project feasibility study report (hereinafter the report) shows that polysilicon project in Ordos during the work stoppage, the polysilicon production technology was fully investigated, visits and exchanges, and advanced upgrade expansion programme.
Upgrading a project from August 2016 ready to implement technology, completed by August 2017, commissioning, production change expanded to 8000 tons/year; subsequent upgrading of the second phase of the scheme starting from 2017 to conduct technological transformation, complete all technical projects by 2020, through two technical capacity up to 18000 tons/year. The polysilicon planned final total up to 50000 tonnes/year.
Well, so much planning, money come from?, the report shows, the Ordos intends to implement technical innovation and expansion of company 3000 tons/year to 8000 tons/year of the plan, the company needs to be increase 2.086 billion yuan. That money will be invested by the Company original parties to increase funding available.
Among them, the Ordos needs new capital of 750.96 million Yuan, equity ratio is still 36% of Inner Mongolia Erdos cashmere group needed new capital of 813.54 million Yuan, the equity ratio is still 39% of Inner Mongolia Erdos electric power metallurgy group needs new capital of 521.5 million Yuan, the equity ratio remains at 25%.
Modest but above shareholder’s equity. 2014, 2015-cashmere sector revenues and gross margin decline if we invest heavily in polycrystalline silicon project is bound to put pressure on the company’s financial.
Polysilicon project in Erdos of most concern to investors whether the future profits can swallow 1.948 billion yuan in debt problems, both analysts also PV experts are not optimistic about the domestic polysilicon industry.
Vice Director of China renewable energy Association, Meng Xiangan said in history, happened many times excess capacity of PV industry, some companies have suffered huge losses, now is solar power in China, but that doesn’t mean strong.
According to Germany 2020 polysilicon market Outlook report issued BernreuterResearch displayed, from 2017 to 2019, global new capacity will reach 141000 metric tons (70% in Chinese) plan put into operation and the new PV projects annual growth rate is expected to fall below 10%, the authors of the report also pointed out that the difference between supply and demand will lead to increased competition. Some projects are expected to be delayed, others will eventually become stranded investment, some of the manufacturers will disappear from the market.
Therefore, polysilicon project in Erdos in lockout contrarian expansion success four years later, has yet to be market test.
Original title: shut down four years later ‘ 2 billion expansion financing polysilicon project in Erdos is questioned