Tongwei sees solar IPO as Chinese demand for renewables grows
Tongwei Group Co, the Chinese company building the world’s biggest solarplant, is leaning toward an initial public offering of its photovoltaic business as it expands capacity to meet the country’s growing demand.The company is “in the process of pushing it” and sees some chance of an IPO this year, chairman of the board Liu Hanyuan said in an interview during an annual gathering of national political advisers in Beijing. The timing and potential value of the IPO weren’t disclosed.Tongwei’s bid to raise cash comes as it constructs the world’s biggest plant, designed to make five gigawatts of solar cells annually, in China’s southwestern province of Sichuan. The Chengdu-based company also bought a stake of about 10 per cent in Taiwanese solar-cell producer Gintech Energy Corp last year as part of move to expand capacity.
The company wants to derive more than half its sales from solar within five years, up from about 30 per cent at present, Mr Liu said. Tongwei, which is also China’s biggest maker of fish food, already has its aquatic-feed business listed in Shanghai since 2004.Clean power is economically competitive, so “it’s worth us accelerating the pace,” said Mr Liu. The first phase of its new solar-cell facility, costing as much as 1.5 billion yuan (S$318 million) to build, will come online in July and boost the company’s total capacity to 3.5 gigawatts, he said.Rising demand for solar panels has pushed top producers including Trina Solar Ltd and JinkoSolar Holding Co to raise production capacity. The average price of solar cells, which are assembled into panels, have fluctuated between 30 US cents a watt to 34 US cents a watt in the past year, according to data compiled by Bloomberg.
Even as Tongwei moves ahead with investments, Mr Liu remains wary of potential supply gluts, saying “the pace of investments should match the demand and growth of the market.” Tongwei has annual capacity to produce more than 15,000 metric tons of the polysilicon raw material it needs to make solar cells, according to Mr Liu.