REC is considering the permanent closure of older production plants in Norway as wafer and cell prices continue to fall on the back of weak end-market demand. REC announced in May 2011 that it would be suspending multicrystalline wafer production at its Herøya and Glomfjord plant as well as solar cell production at its Narvik, Norway facility. Continued downward pressure on prices had meant that keeping the plants open was uneconomical. A decision will be made on the permanent plant closures with the publication of the company's third quarter results on October 26th 2011. Approximately 700 employees are expected to be affected by the potential shutdowns.
“This is an unfortunate, but necessary step in the current market environment,” commented Ole Enger, REC’s president & CEO. “We are mindful of the impact the potential closedowns will have on the affected employees and the local communities in Norway. This is therefore not a decision we take lightly. We are currently working hard to regain the competitiveness of our remaining Norwegian operations. In this challenging market conditions, I am pleased to see that the good development in our Singapore wafer, cell and module production and in our US polysilicon production.”
The plant closures would significantly alter REC’s geographical wafer and cell manufacturing footprint away from Europe, concentrating it more in Singapore only a year after opening its first integrated module manufacturing plant in Asia.
Should the closures go ahead, REC would be cutting 775MW of annual wafer capacity or 45% of REC's wafer capacity in Norway. It would also effectively cut 180MW of solar cell capacity.
The company noted that production at the newest multicrystalline wafer plants at Herøya (650MW annual capacity) and the monocrystalline plant in Glomfjord (300MW of annual capacity) were unaffected and operations continued normally.