China Industry: Apr. 21

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Apr. 21 -This is a regular series of relevant industry news from around China.

Solar power
Chinese solar power products manufacturer Trina Solar said yesterday it had supplied photovoltaic (PV) modules to a 4.7 MW rooftop installation in Italy.

The project, developed by Italy-based investment company ErgyCapital at the end of February, is currently the country’s largest PV facility and single roof-mounted solar system, involving approximately 38,000 square meters of solar panels. The system is expected to generate approximately 5 GWh of electricity per year and benefit the environment by reducing up to 2,500 tons of carbon dioxide emissions.

Chinese PV cells and modules maker Suntech Power Holdings has inked an agreement with German PV system integrator Soleos Solar. Under the terms of the deal, Suntech will deliver a minimum of 6 MW of solar modules to Soleos during the first half of 2009. Soleos’ CEO David Mabille stated that the company plans to buy up to 30 MW of solar panels from the Chinese company in 2009. Financial details were not disclosed.

Chinese solar cells maker China Sunergy said on April 16 that Fengming Zhang has resigned from his positions of director of the board and vice-president of manufacturing, effective today. The company is seeking replacements for both positions to be vacated by Zhang.

U.S. polysilicon supplier Hoku Materials, a subsidiary of clean energy technologies company Hoku Scientific, saw the volume of an order shrink to US$136 million from US$455. The reduction was agreed with the buyer – China-based monocrystalline ingots maker Wealthy Rise International, owned by Solargiga Energy Holdings. The original 10-year polysilicon sale agreement was signed in September last year.

Besides the volume adjustment, initiated by both contractors, the amendment also postpones the date of Hoku’s first delivery of polysilicon from March 31 to June 30, 2010. In addition, Wealthy Rise secured the right to terminate the amended supply agreement and recover any prepayments in the event Hoku has not started deliveries by the end of October next year.

The polysilicon manufacturer can terminate the agreement if Wealthy Rise fails to make prepayments. Under the amended contract Wealthy Rise is to make four installments of US$3.3 million in June, August, October and December this year, while an initial downpayment of US$7 million has already been paid.

Air transport
China Southern Airlines Limited plans to seek government aid after booking a net loss of RMB4.82 billion for 2008. The company will also trim its operating costs in 2009 by 5 percent  to 15 percent.

China Southern plans to postpone the delivery of 13 Boeing 787s and five Airbus A380s thus saving US$1 billion. The aircraft are scheduled to arrive in 2011. However, the company will receive 49 new planes in 2009 and will increase its traffic capacity by 10 percent. It will also sell some 23 older aircraft. Its fleet size is expected to reach 375 airplanes by December.

China Eastern Airlines Corporation booked a net loss of RMB15.3 billion for 2008, versus a net profit of RMB354 million in 2007. The company’s operating loss was RMB15.083 billion, compared to an operating profit of RMB128 million a year earlier. Total operating expenses increased to RMB56.8 billion from RMB42.9 billion. Revenues dropped to RMB41 billion from RMB42.5 billion.

Ma Xulun, general manager of China Eastern Airlines Corporation, said that the airline may be back to profit by 2011 by controlling costs and reducing expenditure by 19 percent on the year to RMB76 billion. The company will slash the delivery of 16 aircraft and will add only 13 in 2009. It will also trim international routes by 17 percent and turn them into domestic ones.

Cathay Pacific Airways has postponed an order for two Boeing 777 to 2010. The company is in discussions with other aircraft makers to delay other deliveries in order to save money. It will also reduce passenger capacity by 8 percent from May. Its subsidiary Dragonair will cut 13 percent of its passenger capacity.

Wind power
Danish wind turbine manufacturer Vestas Wind Systems A/S has rolled out an 850 kW machine designed for untapped and hard-to-reach sites across China. The V60 turbine comes with special blade design and temperature control systems tailored to China’s specific wind and weather conditions. It will be installed at the company’s new Chinese factory in the north-central city of Hohhot. The new Hohhot production facility will make the V60-850kW blades and nacelles on an area of around 45,000 square meters.

German REpower Systems AG has rejected the prototype of the initial blades made by India-based Suzlon Energy for REpower’s wind power project in China’s Shandong province because of poor quality. In 2008, the two companies inked a contract for the delivery of blades for 75 turbines and an option for an additional 75.

This industry report brief is courtesy of Aii Data Processing.