SunEdison to close polysilicon fab in Italy

SunEdison said Monday it was indefinitely closing its shuttered polysilicon manufacturing facility in Merano, Italy, effective immediately.

The news comes a week after the U.S. company announced lofty plans to build a $6 billion PV fab in Saudi Arabia that would cover the entire production line, from polysilicon to modules.

SunEdison stressed, however, that the decision to close its Italian operation for good was "the conclusion of a process that began with the previously announced 2011 global restructuring plan.

"The Merano polysilicon facility was shuttered in December of 2011 as part of a restructuring plan to better align the business with current and expected market conditions and improve overall cost competitiveness," the company said.

SunEdison added that it had for the past two years explored various options to improve the cost effectiveness of the Italian polysilicon facility but ultimately found that the cost reductions it had identified were not enough to sustain the economic viability of the plant in the current market environment.

The closure will affect approximately 200 employees in Merano. In connection with the closure, the associated electronic grade TCS (trichlorosilane) operation, which employs approximately 35 people, will be closed over the next 12 months.

"As a result of the decision to indefinitely close the polysilicon manufacturing facility and TCS operation, we expect to record approximately $37 million of fixed asset impairments for the year-ended December 31, 2013," SunEdison stated.

The company added that it would also begin to consolidate its semiconductor crystal operations, including the transitioning of small diameter crystal activities in its St. Peters, Missouri, facility to its other crystal facilities in Korea, Taiwan and Italy. The crystal manufacturing consolidation will affect approximately 100 employees in St. Peters and will be implemented over the next 12 months.

"We never take actions like these lightly," said Shaker Sadasivam, SunEdison executive vice president and president of Semiconductor Materials. "However, in light of current market conditions, today’s announcement is necessary to preserve our strong competitive position and strengthen our future."

Sadasivam said the decision to close the Merano polysilicon and TCS operations and to transition crystal operations was the result of "continuous efforts to improve the performance of our business through solutions that will keep these facilities economically strong."

SunEdison nevertheless said it would maintain a strong presence in Italy. Sadasivam expressed appreciation for the the support provided by the Bolzano Province and by the Italian Government in helping achieve lower power rates.

"We look forward to continuing to work with them during the transition to help make our Italian operations more competitive. We are focused on maintaining competitive costs across our global footprint, including Italy."