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Timminco said that it will temporarily curtail production of silicon metal because of difficult market conditions and reduced demand for silicon metal in the chemical and aluminum industries.
The upgraded metallurgical silicon (UMG) manufacturer added that this revamped operating mode will be implemented at the start of the 2Q, with the hope of preserving cash flow and decreasing working capital levels. The reduction in silicon metal production will result in a temporary workforce reduction, according to the company. During this period, it will supply silicon metal to customers from existing finished goods inventory.
Timminco will continue to produce solar-grade silicon, although at levels in line with customer orders. Solar-grade silicon customers have recently decreased their orders significantly because of the current market downturn. The company said it will also defer further capacity expansion of its solar-grade silicon plant, pending recovery of demand for the material.
No other specifics on the extent of the slowdown, including the number of employees to be laid off or the amount of customer order pushouts or cancellations, were divulged by the company.
Heinz Schimmelbusch, chairman/CEO, stated that "the impact of global economic and credit conditions have prompted us to take decisive action to reduce costs and preserve capital until the silicon metal and solar-grade silicon markets improve."
Timminco also released its fourth-quarter and fiscal 2008 year-end results. The company's silicon group saw sales of $58.5 million for the fourth quarter, an increase of 140% from 2007, which accounted for 80% of total sales. Annual sales were $189.5 million, an increase of 83% from 2007, which accounted for 75% of total sales.
The group shipped 424 metric tons of solar-grade silicon in the 4Q, an increase of 41% from the 3Q08, generating revenue of US$27.7 million. For the year, the group shipped 1045 metric tons of solar-grade silicon, resulting in revenue of US$64.6 million.
Fourth-quarter net income increased to US$7.5 million from a net loss of US$3.1 million for the same period in 2007, and net income for the 2008 increased to US$19.9 million from a net loss of US$1.6 million for 2007, according to the company.
