Solargiga acquires 51 percent interest in Qinghai Chenguang; intends to ramp up production

The company said consideration of the acquisition will be RMB 45.9 million and will be paid by way of capital increase through cash injection. Solargiga and Qinghai Chenguang will then jointly invest in the construction of monocrystalline silicon solar ingots production facilities, with an annual production capacity of 2,000 tonnes.

Qinghai Chenguang New Energy Co., Ltd is located in Qinghai Dongchuan Industrial Zone. It is expected that upon the completion of the acquisition, Qinghai Chenguang will commence the construction of a production plant with a planned annual production capacity of 2,000 tonnes of monocrystalline silicon solar ingots, which can accommodate 192 monocrystalline solar ingot pullers. The total investment amount of the project will be RMB 300 million.

The construction of the new production plant will be divided into two phases. The first will commence this year, continues the company, whereby 96 monocrystalline solar ingot pullers are expected to be installed. Production is then expected to commence next April, with full production capacity being reached next July. The company hopes to see an annual production capacity of 1,000 tonnes of monocrystalline silicon solar ingots.

Construction of the second phase is scheduled to commence by the end of next year, with an additional 96 monocrystalline solar ingot pullers to be installed at the end of 2012. Full capacity is expected to be reached in mid 2013. Upon the completion of the whole project, Qinghai Chenguang has said it will have an annual production capacity of 2,000 tonnes of monocrystalline silicon solar ingots.

According to the agreement, the Xining Economic & Technology Development Zone Administration Committee will take charge in coordinating the tender invitation for the construction of Qinghai photovoltaic power station and will ensure the use of solar modules produced by Solargiga in Qinghai receive top priority as permitted under local law and regulations.

Additionally, Qinghai Chenguang intends to build a 200 KW photovoltaic demonstration power station in the production plant area, which will be sponsored by the Xining Economic & Technology Development Zone Administration Committee under the national policy of ”Golden Sun Programme”.

Commenting on the agreement, Mr. HSU You Yuan, CEO and executive director of Solargiga, said: ”The cooperation between the Company and the Xining Economic & Technology Development Zone Administration Committee pursuant to the Agreement will be in line with the aim of the PRC Government to develop the solar ingots industry in Xining Economic & Technology Development Zone and promote this industry to become a new strategic industry in Qinghai Province. It will also accelerate the production expansion plan of Solargiga so as to satisfy the demand from customers.”