China's solar panel producers seeking revival

NANCHANG - China's solar panel producers embattled by heavy duties from anti-dumping probes in both the United States and Europe are focusing on the domestic downstream power generation sector to offset their export losses.

The LDK Solar Co, one of the world's largest manufacturers of solar wafers, has seen engines in its workshops in Xinyu, east China's Jiangxi province, roar again.

This month, the company has obtained a number of new deals of building photovoltaic power plants in China.

The New York-listed company's stock dived to $0.71 per share on Oct 19 from an earlier high of $76.75 dragged by the United States Commerce Department' final approval to heavy punitive duties on billions of dollars of solar-energy products from China for the next five years.

The duties range from 18 percent to 250 percent.

"Perhaps the toughest time is passing, as most of the customers and banks have been very supportive of us," said Sam Tong, president and chief operating officer of LDK Solar Co, on Tuesday.

In order to tackle the tight cash flow, the company transferred some of its fixed assets to other medium-sized solar companies as a mortgage, suspend standing orders and seek new business partnerships with Chinese downstream power generating enterprises by building solar PV power stations.

The company had seven more production lines resuming operations in November.

LDK Solar chose to sell 19.9 percent of its shares to a state-backed company on Oct 19, which generated an immediate $23 million, said Tong.

The company's active response to overcome the export crisis has effectively boosted investors' confidence on its stocks.

LDK Solar saw a 25 percent share price jump the day after its new funding source.

The company also gained $70.4 million as compensation by suspending long-term agreements providing solar wafers for its European customers and Japanese customer Sumitomo.

Tong said the price of solar PV products has bottomed out and China's domestic solar panel market will see at least a 30 percent surge in the future, with the momentum of building PV power stations.

According to a report released by the National Energy Administration in August, China will have 21 million kilowatts of installed solar power generation capacity by 2015, which will be six times more than currently.

The administration also asked local authorities to make plans for establishing distributed photovoltaic generation demonstration centers to boost the domestic solar industry.