China's top solar products manufacturer, LONGi Green Energy Technology, today announced it will invest USD 309 million in its plant in Andhra Pradesh to double its capacity as Beijing grapples with the rising threat of import controls in the US and other countries.
LONGi will invest USD 309 million, including about USD 240 million in construction investment and about USD 68 million in working capital, to double the capacity of its cell and module factory at Sri City in Andhra Pradesh from 500 MW to one GW respectively, LONGi Solar President Wenxue Li said.
The expansion is aimed at meeting India's rapidly-rising demand for solar energy and increasing LONGi's overseas sales, he said.
The announcement follows the Trump administration's January 24 decision to impose an extra 30 per cent duty on imported solar modules.
India too in January proposed to levy a 70 per cent safeguard duty on import of solar power equipment from countries like China for 200 days to protect domestic industry from "serious injury".
China is the world's largest market for both photovoltaics and solar thermal energy.
Both the US and Europe have long accused Beijing of 'dumping' solar panels into their markets, selling them at below production costs in order to kill their competitors in other markets.
Construction on the expanded module factory is scheduled to be completed and production will commence by the end of August 2019, while the cell factory is set to start production in January 2020, Li said.
"The expansion of our Andhra Pradesh factory is part of LONGi's global growth strategy. While global demand for solar modules continues to grow, LONGi is making moderate capacity investments in select markets to hedge against the risks of trade protectionism, while remaining focused on the Chinese domestic market," Li was quoted as saying in a press release.
"According to preliminary estimates, the new expansion will support USD 380 million in annual sales and roughly USD 19 million in net profit every year, he said.
India is already Chinas biggest export market for solar products by sales value. During 2017, China's exports accounted for 24.1 per cent of Indias solar products, with sales growth seen in both cells and modules.
The project is being operated by Lerri Solar Technology (India) Private Ltd, which is 40 per cent owned by LONGi and 60 per cent owned by its wholly owned subsidiary, LONGi Solar.
Expanding production capacity in India will enable LONGi to take advantage of Indias rich local resources, low costs and generous policies toward the solar industry, he said.
It's also an opportunity for LONGi to accelerate its overseas expansion and boost its share of the global market for mono-crystalline product, he said.
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