L R AS Published on Sunday 8 December 2019 - n° 301 - Categories:industrial strategy, miscellaneous financial

Wacker begins to worry about its opportunities in China

German silicon producer Wacker Chemie has directly criticised the Chinese government for favouring low-cost silicon production in western China; electricity

produced from coal is supplied at particularly low prices. In addition, loans and grants are available to build plants. China thus promotes the competitiveness of Chinese manufacturers and thereby eliminates Wacker's sales on the Chinese market (NDLR Wacker is one of the world's top five silicon manufacturers). This means that Wacker will not be able to run its European plants at full capacity, thereby increasing its production costs: the company will depreciate its production tool by €750 million in the 2019 financial year.

PV Tech of 5 December

NDLR Wacker finally understood that his future as a silicon manufacturer was at stake. He reacted with words. There are no actions except that of a company seeking to improve its competitiveness. As it will not be able to fight against the advantages provided to Chinese producers, one wonders what will become of it. The only real answer would be to set up a downstream wafer industry, then a cell industry in order to find outlets. For this, a strategy for the constitution of a photovoltaic sector would be necessary. It is not with D. Trump that he could hope for this. Will he be more successful with the European Commission? For the moment, it has to take note of the files before it can act. Wacker's good fortune, compared to REC Silicon which is in the same situation, is that the silicon part only represents 20% of the group's activity. It can therefore hold out for a while until the storm passes or it finds a solution to lower its costs.

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