LONGi invests additional RM500mil

In this file picture dated April 18 2018 Sarawak Chief Minister Datuk Patinggi Abang Johari Tun Openg (second left) places a solar panel to officially open Longi (Kuching) Sdn Bhd while Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan (left) and Longi chairman Zhong Baoshen (right) look on

KUCHING: LONGi Green Energy Technology Co is investing an additional RM500mil in new manufacturing facilities to boost production of solar products in the Samajaya Free Industrial Zone here.

The China-based company is the world’s largest maker of solar-grade monocrystalline silicon products and LONGi Kuching is its sole overseas operation.

The operations are being managed by two companies - LONGi (Kuching) Sdn Bhd and LONGi Technology (Kuching) Sdn Bhd.

LONGi Kuching chief executive officer Ngieng Sii Jing said the additional investment includes RM400mil in a third solar cell plant project.

LONGi Kuching is the world’s first to have a vertically integrated monocrystalline solar manufacturing base in one location, Ngieng told StarBiz.

“Construction work for the new cell plant commenced in late June 2019. It is scheduled for completion in early December 2019. This will be followed by the installation of machinery and equipment.

“The new plant is expected to produce its first solar cells by the first quarter of 2020 and production will be fully ramped up in second quarter, ” he said.

The third plant has a capacity of 1.25gigawatts (GW) per annum and will raise the company’s current solar cells production capacity by almost 60% to 3.38GW per annum.

The first and second factories have a combined capacity of 2.13GW. Ngieng said the other RM100mil capital expenditure will be used to expand and upgrade the existing manufacturing facilities. LONGi Kuching currently owns seven plants producing monocrystalline ingots, wafers, cells and modules.

The annual capacity of the ingot plant is 500MW, wafer plant 1GW and module plant 900MW.

The ingots are supplied to the wafer plant while the produced wafers supplied to the cells plant.

The solar cells are used to make solar modules, commonly known as solar panels. The company’s total investment here is between RM1.4bil to RM1.5bil, including the acquisition of US-based SunEdison silicon wafer production facility (US$63mil) in 2016, Comtec Solar International (M) Sdn Bhd’s solar manufacturing plant (RM130mil) in 2017 and former factory of Sanmina SCI, which was producing printed circuit boards before it was shut down for business.

Global demand for solar panels saw exponential growth in the past five years, Ngieng said, which has resulting in their plants operating round the clock for 365 days.

This is to cope with orders from existing and new clients globally.

“The demand is very good. Currently, we don’t have the capacity to meet incoming orders. That is why we are rushing for the completion of new manufacturing facilities. Traditionally, we export our products to US, Canada and Europe. Now we also ship our products to new markets, including South Korea, Taiwan and Vietnam.

“Our solar panels are exported mainly to the US. Besides catering for our own internal use, the surplus solar cells and wafers are sold to clients in Vietnam and Taiwan, respectively, ” he said.

According to LONGi Group 2018 annual report, its overseas shipments of monocrystalline silicon wafer was 3.483 billion pieces, up 59% from 2017.

Shipment of solar cells and modules reached 7.07GW, an increase of 50% year-on-year.

The shipments of the modules amounted to 1.96GW, an increase of a whopping 370%.

Independent third-party research data showed LONGi Group accounted for 40% of the industry’s monocrystalline silicon wafer capacity, reinforcing its position as the world’s largest monocrystalline solar producer.

The worldwide installation of solar panels is projected to reach between 120GW and 140GW, Ngieng said. He said they have recorded RM700mil revenue in first half-2019. It will achieve targeted sales turnover of RM1.4bil this year versus 2018’s RM600mil.

“We are targeting sales revenue to RM2bil in 2020 when the new factory is operational.

“Based on the first half’s financial performance, LONGi Kuching will become profitable this year, ” he added. Despite the falling prices of its products, Ngieng said the group group has maintained double-digit growth in profit margins as production costs have decreased due to technology, which has raised the productivity of new machinery.

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