Just one month after taking the decision to permanently close three of its oldest photovoltaic production plants in Norway, due to the challenging market conditions presented by 2011, REC says it has decided to "initiate a process with the trade unions" in order to temporarily stop 60 percent of the production capacity in Herøya. The shutdown is expected to last into the first quarter of 2012.
The Norwegian manufacturer went on to say that since October 1, market prices for photovoltaic modules have dropped by a further 10 percent, while wafer and polysilicon prices have fallen by 30 and 35 percent, respectively. In a statement released, it said, "In addition to the price pressure, REC is currently experiencing low visibility on sales volumes and inventories are increasing across all product areas. If the solar market is not improving, further adjustments of production levels will be made."
These factors will combine to negatively impact RECs fourth quarter (Q4) financial results. The manufacturer expects REC Silicon to be particularly impacted. A spokesperson for the company told pv magazine that no new annual production targets have been released on the back of todays announcement. However, they did say that Q4 will see a decline in the production of wafers by around 50 MW "or less" from the original 200 MW target.
In terms of its production targets, REC had said at the end of Q3 that it expected to produce around 4,600 MT of polysilicon in Q4 (Q3: 4,557 MT) and around 18,500 MT for the full year 2011; around 200 MW of multi and mono wafers in Q4 (Q3: 205 MW) and around 1,100 MW for the full year; and around 175 MW of modules (Q3: 181 MW) and around 710 MW for the full year.
Despite todays news, CEO Ole Enger remains positive. "With our strong positions in Singapore and the U.S., and with support from all our stakeholders, we are well positioned to benefit from the improved competitiveness of solar energy," he stated, adding, "I am encouraged by our organization’s ability to continue to cut costs and develop new technologies."
Wafer production began at Herøya in 2003. According to RECs website most of the production is sold to external customers, and around 350 workers are employed there.