Sandvika, November 29, 2011: On the basis of further weakening of the solar market, Renewable Energy Corporation ASA (REC) has decided to initiate a process with the trade unions, with the intention to temporary halt 60 percent of the capacity of the 650 MW multicrystalline wafer facility at Herøya, Norway from December 1, 2011 through the first quarter 2012. The temporary shutdown is expected to affect approximately 200 employees.
The debt crisis in Europe and the turmoil in the capital markets continue to have severe negative impact on demand in the solar market. Since October 1st, market prices for modules, wafers and polysilicon are down approximately 10 percent, 30 percent and 35 percent respectively. In addition to the price pressure, REC is currently experiencing low visibility on sales volumes and inventories are increasing across all product areas. If the solar market is not improving, further adjustments of production levels will be made.
Compared to the third quarter 2011, lower sales prices and reduced sales volumes are expected to negatively affect REC's financial results in the fourth quarter 2011, in particular in REC Silicon.
"In this very challenging market environment the solar industry is set for a phase of shake-out and consolidation over the next 1-2 years. REC needs to adapt production to the prevailing market conditions. With our strong positions in Singapore and the US, and with support from all our stakeholders, we are well positioned to benefit from the improved competitiveness of solar energy. I am encouraged by our organization's ability to continue to cut costs and develop new technologies." CEO Ole Enger says.
For more information, please contact:
Mikkel Tørud, VP Investor relations; +47 976 99 144
For press and media, please contact:
John Andersen, Jr., Group COO & EVP Wafer, Cells and Modules; +47 901 74 080
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)