The Board of Directors of Renewable Energy Corporation ASA (REC) has resolved to initiate a process, including formal deliberations with the employee representatives to assess permanent closedown of parts of the production capacity in Norway.
On the basis of continued weak market conditions and prospects of significant negative cash flow, the Renewable Energy Corporation considers permanent closedown of the production capacity at the oldest multicrystalline wafer plants at Herøya, the multicrystalline wafer plant in Glomfjord and the solar cell plant in Narvik. This represents approximately 775 MW of annual wafer capacity or 45 percent of REC’s wafer capacity in Norway, as well as 180 MW of solar cell capacity. Approximately 700 employees are expected to be affected by the potential shutdowns.
Operation continues at the newest multicrystalline wafer plants at Herøya (650 MW annual capacity) and the monocrystalline plant in Glomfjord (300 MW annual capacity). The Renewable Energy Corporation works intensively to improve operation and reduce costs at these facilities, and positive cash flow continues to be the main criteria for continued operation.
The integrated wafer, cell and module facility in Singapore (700 MW annual module capacity) and the polysilicon facilities in the US (19.000 MT annual polysilicon capacity) continues to operate at full capacity.
“This is an unfortunate, but necessary step in the current market environment. 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. This gives us a foundation for the future”, said Ole Enger, President & CEO.
The Renewable Energy Corporation will assess and present its estimates for costs and write-downs in relation to the restructuring of the production plants in Norway in connection with the publication of the third quarter results on October 26th 2011.