Increasing inventory concerns on the back of weak demand and poor visibility has led to REC's planning to temporarily halt 60% of multicrystalline wafer capacity at its main facility in Herøya, Norway. Approximately 390MW of capacity will come offline from December 1, 2011 and although the company did not say when exactly activity would be resumed, it appears that the temporary halt will be in effect at least until the end of the first quarter of 2012. REC had previously announced the full closure of monocrystalline facilities unable to make them profitable as prices declined.
“In this very challenging market environment the solar industry is set for a phase of shake-out and consolidation over the next 1-2 years,” commented Ole Enger, CEO, Renewable Energy Corporation. “REC needs to adapt production to the prevailing market conditions. With our strong positions in Singapore and the US, and with support from all our stakeholders, we are well positioned to benefit from the improved competitiveness of solar energy.”
China-based competitors had guided in the main, continued shipment reduction from the third quarter of 2011, leading to even lower shipment levels in the seasonally weak first quarter of 2012.
Rapidly falling prices, due to significant overcapacity was also pushing quarterly losses higher as companies made inventory write-downs. REC noted that since October 1st, market prices for modules, wafers and polysilicon were down approximately 10%, 30% and 35% respectively.
REC also noted that should weak market conditions continue, further adjustments to production levels would be made.
REC said that it had started a dialogue with trade unions over the shutdowns that affected approximately 200 employees.
