JinkoSolar forced to close manufacturing plant after chemical leaks

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Updated: Several days of angry demonstrations by local residents after a leak of fluoride from a cell manufacturing plant owned by JinkoSolar have led to the plant closing. According to reports, the plant had been warned of environmental noncompliance earlier this year, but after residents broke through gates, overturning cars and ransacking offices, local government officials have ordered the closure of the plant in Hongxiao, Haining city in eastern Zhejiang province, China.

The demonstrations by as many as 500 people started last week and continued through the weekend, despite police attempts to dispel demonstrators. JinkoSolar had made no public comments about the incident until today when CFO Zhang Longgen was quoted as saying that fluoride-based waste containers, which had been stored outside, had leaked after heavy rains in late August had polluted a nearby river. Reuters said in updated news that Jinko held a press conference today in which the company apologised for the leak.

There has been widespread concern within the PV industry for several years that environmental regulations surrounding manufacturing plants in China were lax in comparison with plants in Europe and the US, giving Chinese producers an unfair advantage.

However, the recent leakage at Jinko and claims of previous noncompliance could have far-reaching consequences for the company, Chinese PV manufacturers, and the industry in general.

Correction: Initially it was reported that the Haining facility was thought to be a module production line, however updated reports including those from JinkSolar highlight that it was solar cell manufacturing facility where the chemical leak and demonstrations took place. 

Update 1

In a moment of irony, bad timing or worse, JinkoSolar announced a sponsorship deal with a US NFL football team, the San Francisco 49ers. 
 
In a statement, Paraag Marathe, COO for the 49ers, commented: “Our agreement with JinkoSolar is a reflection of the San Francisco 49ers’ dedication to promoting environmentally friendly practices within our facilities and throughout the greater community.”
 
Update 2
 
According to an investor note issued by Jeffries equity analyst, Jesse Pichel, Chinese media reported that JinkoSolar had been fined US$75,000 due to the chemical leakage, which has also stopped manufacturing at the plant for an unspecified time. 
 
The Jeffries analyst expects the fallout from the high-profile incident will force lower-tier Chinese module manufacturers to invest in better environmental protection measures, raising manufacturing costs in the future.
 
“This incident will raise awareness of environmental protection and increase cost for new entrants who made shortcuts, in our view. We believe the tier-2/3 OEMs will have to invest more in their production facilities to avoid similar environmental and social issues. This will add more burden in addition to the weak demand and low utilization problems,” he noted.
 
Update 3
 
JinkoSolar said it expects to be back in production in days while investigation of chemical leak continues. The company has provided its first written statement regarding the leak of waste containing fluoride at its solar cell manufacturing plant in Haining city, Zhejiang Province, China. The company noted that a local environmental protection authority is investigating the incident, while the company will immediately put right any “deficiencies in environmental protection.” However, Jinko noted that it expected to resume operations at the plant “within the next few days.”
 
Jinko also noted that though production at the cell production plant had halted, it would source cells in a tolling arrangement with other unidentified suppliers, which would not disrupt module production downstream or affect module shipments to customers. Haining had the capacity to produce 1,100 MW of solar cells per year as of June 30, according to the company. 
 
JinkoSolar said it has sincerely apologized to local residents of Haining and its employees for any inconveniences caused.

 

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