REC Solar spending US$70 million on planned 300MW capacity expansion



PV module manufacturer REC Solar ASA has confirmed plans to expand capacity at its integrated plant in Singapore by 300MW at a cost of around US$70 million.

REC Solar has been undertaking debottlenecking activities at the facility to boost cell and module output that has included the purchase of additional equipment that was expected to increase module manufacturing capacity by approximately 100MW, taking nameplate capacity to 1GW in 2014.

However, REC Solar noted in its first quarter 2014 financial report that the management board had approved plans to expand capacity to 1.3GW with capital expenditure (capex) of US$70 million approved in 2014 to purchase two additional module lines. The capex would be funded solely from profits as the company expected to remain debt free after its restructuring and spin-off from REC Group last year.

The new lines will also incorporate technology upgrades for higher efficiency cell/modules by reducing efficiency losses on the cell front side and the implementation of rear surface passivation processes.

REC noted that the capacity expansions and technology upgrades would result in achieving 280W class modules with the first line starting production in the first quarter of 2015 and the second line by the end of the first-half of 2015.

The company noted that capex of US$4.6 million in the first quarter had primarily been attributed to the debottlenecking of the existing module production lines, while debottlenecking of wafer production lines was also ongoing.

Debottlenecking and upgrades to its ingot production lines would reduce outsourced product purchases and improve quality and conversion efficiencies via its directional solidification processes upgrades.

Financial results

REC Solar continues to run its Singapore facility at full-capacity and reported first quarter 2014 revenue of US$175.4 million, down 3.9% from the previous quarter, due partly to lower production during Chinese New Year and the small impact from a fire.

The fire had resulted in a temporary close down of solar cell lines for six weeks and coincided with silicon ingot furnace upgrades that increased cost due to outsourcing.

Module production in the first quarter was 225MW, unaffected by the fire. However, the disruptions have ended in the first quarter.

The company reported a profit (EBITDA) of US$16.2 million, down 11.0% from the prior quarter.

Øyvind Hasaas, CEO of REC Solar ASA said: “We are experiencing good demand in our main markets in Europe and Japan. Together with our partners, we are continuously working to improve our product offering and improve our market presence. Our expansion of 300MW module capacity through two new module lines will facilitate introduction of new technologies and broaden our product offering to our client base. This is an important step for us to strengthen our position in the high end market segment.”

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