Saturday, January 19, 2008

China's Yingli plans US plant, beats expansion goal

SHENZHEN, China, Jan 17 (Reuters) - China's Yingli Green Energy Holding Co Ltd plans to spend an initial $20-$30 million on a U.S. manufacturing plant to help it expand overseas sales, a senior executive said on Thursday.

The Miami, Florida plant will mainly manufacture solar modules, Chief Financial Officer Bryan Li said in an interview on the sidelines of a solar technology conference in the southern Chinese town of Shenzhen, near Hong Kong.

Li said the plant should be completed in the first half of next year. He said the $20-$30 million would cover the manufacturing equipment, land and other facilities.

The U.S. market, where the Chinese often struggle to compete on price, may make up 3-4 percent of revenue in 2008, Li said.

"We will start from a 30 megawatt capacity and ramp to 100 MW, and then wait and see the market development in the U.S. and decide whether to further expand," he said.

Yingli is involved in the entire value chain, from the manufacture of ingots, wafers, cells and modules to the final assembly and installation of complete solar energy systems. Focusing mainly on module production in the United States will help limit costs, Li added.

Based in Baoding, China, Yingli made its U.S. stock market debut last June and is now using the cash raised to increase capacity. It expects to reach overall capacity of 600 MW in 2009, a year ahead of its previous 2010 target, Li said.

Yingli reached capacity of 200 MW in mid-2007.

The solar energy industry is growing rapidly in China, where a number of firms, including Suntech Power, have listed on U.S. exchanges, tapping in to skyrocketing interest in renewable energy, but there is a risk now of oversupply.

Yingli's shares almost quadrupled from their listing last year, but this year have slid 31 percent to $26.76 at Wednesday's close.

China's solar energy companies are mainly export-driven, with Germany and Spain typically grabbing the largest part of revenue due to generous government support and incentives in the European countries.

Li expects the proportion of revenue coming from overseas in 2008 to amount to 97-98 percent of the total, slightly higher than 94 percent in January-September last year.

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