Sandvika, May 24, 2011: Renewable Energy Corporation ASA (REC) intends to reduce production of wafers, cells and modules, from July 1st 2011, as a response to the current market conditions.
REC will initiate a process with the trade unions, with the intention to halt production at the oldest wafer plants at Herøya, Norway, and at the solar cell plant in Narvik, Norway. Further, REC-branded modules will not be manufactured under contract by third parties in the third quarter.
These measures are expected to reduce REC's wafer production by approximately 125 MW in the third quarter, representing 30 percent of the wafer capacity in Norway in the quarter, while cell and module production will be reduced by approximately 50 MW in the same period. Such reduction in production is expected to affect approximately 300 employees at Herøya and 200 employees in Narvik, through temporary lay-offs. Polysilicon production in the US and wafer, cell and module production in Singapore will not be affected by these measures.
Subject to market conditions, REC will evaluate the appropriate production levels going forward. REC is therefore at this time not prepared to indicate the expected effect of the reduction in capacity utilization on the annual production volumes in 2011.
Due to the weak wafer and module market and lower selling prices for these products, RECs second quarter operating results are expected to be reduced to a level well below the previous quarter.
For more information, please contact;
Mikkel Tørud, VP & IRO; +47 976 99 144
Peder Poulsson, Investor Relations Analyst; +47 950 26 311
REC is a leading vertically integrated player in the solar energy industry. Ranked among the world's largest producers of polysilicon and wafers for solar applications and a rapidly growing manufacturer of solar cells and modules, REC also engages in project development activities in selected PV segments. Founded in Norway in 1996, REC is an international solar company, employing more than 3,900 people worldwide with revenues close to NOK 14 billion in 2010. Please visit www.recgroup.com to learn more about REC.
This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)