China: JA Solar to establish 3 GW solar facility

JA Solar has signed a strategic investment agreement with the city of Hefei, in China’s Anhui province, under which the company will set up a facility to produce both solar cells and PV products.

According to a statement released, the three GW facility is expected to be located in Hefei’s High-Tech Industrial Development Zone, and will be constructed over a multi-year period. The first phase will reportedly begin this year, with production expected to commence in 2012.

In terms of financing, the Hefei High-Tech Construction and Investment Group, a government-affiliated investment company, and a number of domestic Chinese banks, are expected to provide up to RMB 13.5 billion over a four-year period.

Responding to the news, Götz Fischbeck, senior equity analyst for PV stocks at BHF Bank AG says that since the Chinese company is an important customer of Roth & Rau, he expects Roth & Rau to benefit from the expansion project

"At the same time," he continues, "JA Solar is one of the most important competitors of German cell manufacturer Q-Cells. As Q-Cells faces severe financing constraints, the aggressive expansion plans by Q-Cells’ Chinese competitors – exemplified by JA Solar’s announcement – highlight the difficulties Q-Cells is bound to face in the near future, when its Chinese competitors have reached production scales at which Q-Cells will find it hard to compete."

Peng Fang, CEO of JA Solar adds: "With lower labor costs and a favorable investment climate in Hefei translating into lower operational costs, we anticipate this new facility will serve to enhance JA Solar’s future profitability and market share."

The company seems to be deploying an aggressive expansion strategy this year: the follows JA Solar’s announcement on Tuesday that it has joined forces with MEMC Electronic Materials, Inc. to open an up to one GW PV cell production facility at JA Solar’s Yangzhou site.