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Norwegian firm to expand solar plant in Tuas
[SINGAPORE] Norwegian group Rec Solar has announced that it will expand its $2.5 billion integrated plant in Tuas to meet strong market demand, in a marked turnaround from having reduced its solar panel manufacturing operations to just this Singapore plant.
It expects to invest between US$65 million and US$70 million to ramp up both solar module and wafer capacity here.
Unveiling the expansion plans this week after a sterling fourth quarter last year, the company said that it expects to start de-bottlenecking its Singapore plant within this quarter to boost module manufacturing capacity to 940 megawatts (or a nameplate of 1.0 Gigawatt), up from 820 MW as at the end of last year.
Chief executive officer Oyvind Hasaas said at the group's Q4 financial results meeting that Rec Solar was looking into increasing its module capacity to 1.3 GW by 2015, and that this would be decided in Q2 this year.
The group indicated that it would spend US$40 million to raise the Singapore plant's module capacity to 1.0 GW by Q3, and its wafer capacity to 840 MW by the first half of 2015, up from 640 MW.
A subsequent planned 300 MW expansion in module capacity would need capex of US$25 million to US$30 million, it said.
Prospects are clearly looking brighter for Rec, which last year was forced to shut its entire Norwegian manufacturing operations due to global overcapacity and competition from Chinese solar panel makers.
Last October, it split into two companies: the Singapore-headquartered Rec Solar, which produces the complete wafer, cell and solar panels, and the US-headquartered Rec Silicon, producing silicon materials for the US industry.
The Tuas plant employs around 1,400 personnel.
On Tuesday, Rec Solar reported a 17 per cent increase in revenue for Q4 last year and a doubling in profits from the previous quarter, thanks to strong markets in Japan, the US and China, which helped stabilise prices. Additionally, European anti-dumping legislation on Chinese modules reduced unfair competition.
While the global solar industry still has excess capacity, Rec noted that "supply continues to increase but at a slower rate than demand".
Cost reductions have also boosted Rec Solar's bottom line, Mr Hasaas said, referring to the group's cutting of its solar panel costs by 10 per cent over the last year.
This year, it is looking to improve its margins through lower costs and is targeting a further 8-12 per cent reduction in solar panel costs.
"Cost reductions for solar systems must continue to come down to make solar energy even more competitive," it said.