PV manufacturer, ReneSola said that it would permanently close its Phase 1, Sichuan polysilicon production plant due to its failure to significantly reduce production costs.
The company said it tool the decision in October, 2013 after efforts to reduce production costs did not meet requirements. Phase I plant had been operational since the beginning of 2011 and Phase II of the facility has been completed since the end of 2012. Production at Phase 1 plant had reached 3,523MT annual run-rate in 2012.
Xianshou Li, ReneSola's chief executive officer said in a statement that, “At the end of September, after carefully assessing the operating status of our polysilicon factory, we came to the conclusion that our efforts to reduce the production cost at the Phase I facility of the polysilicon factory were unsuccessful. We decided to permanently cease production at the Phase I facility in October 2013. As a result, we recognized a significant non-cash impairment charge for the third quarter. We believe the discontinuation of production at the Phase I facility will help reduce our polysilicon production cost, in line with our efforts to achieve a target cost level that would make our in-house polysilicon production cost-efficient compared to the prevailing market price of polysilicon. In addition, we believe the discontinuation will help reduce our power consumption and depreciation and therefore help to enhance our profitability going forward.”
As a result of the decision to close the facility, ReneSola said it took a non-cash charge of US$202.8 million, including an impairment charge of US$194.7 million on long-lived assets associated with the Sichuan polysilicon plant.
The company expects to operate Phase II facility at full-capacity (6,000MT) in 2014, while increasing polysilicon outsourcing.