PV glass manufacturer Flat Glass is the latest Chinese solar company to announce plans to pull out all the stops to expand its production capacity.
Unveiling proposals for a RMB1.45 billion ($213 million) convertible bond issuance to the Hong Kong Stock Exchange yesterday, the Jiaxing-based glass maker referred back to a statement in its 2018 annual report which said “despite the continuous expansion of the company, the production capacity of the production facilities of the company cannot satisfy the demand [for] the company’s products”.
Flat Glass Group Co Ltd wants shareholders to approve plans for the issue of six-year A-share convertible bonds at its annual meeting, to be held in Xinjiang on June 24.
The company – which also manufactures other types of glass and provides engineering, procurement and construction services for solar plants –intends the money raised by the bond issue to provide most of the finance for an 18-month project at its Anhui facilities that would expand its annual PV glass production capacity from its current 900,000 tons to 1.65 million.
Far from building new capacity from a standing start, Flat Glass told shareholders it is already running on an expansionary footing, with its decision to launch a new production line last year being vindicated as the extra volume of product shipped compensated for a 20% fall in the solar glass price after Beijing announced its intent to reduce public solar subsidies at the end of May.
The company expects a third production line in Anhui with a daily melting capacity of 1,000 tons to come into operation by the end of next month along with two more manufacturing facilities in Vietnam, which are set to start operating in the second half of this year and the second half of next year.
Such rapid expansion explains why Flat Glass had only RMB895 million in the bank in the first quarter and needs the bond issue to keep growing, although the company did add it plans to fund the balance of the anticipated RMB1.75 billion, 330,000 m² Anhui project with debt financing.