China Industry: Oct. 21

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

Air transport

China Southern Airlines Company intends to sell its 50 percent stake in the aircraft engine maintenance joint venture MTU Maintenance Zhuhai to China Southern Air Holding Co, its parent, for RMB1.61 billion, Dow Jones International News reported.

MTU Maintenance Zhuhai was co-founded by China Southern Airlines and German MTU Aero Engines with each of the companies holding a 50 percent stake in the JV.

Jetstar Airways, the budget carrier of Australia-headquartered Qantas Airways Limited intends to start flying four times a week from Singapore to Haikou, the capital of Hainan Province, from December 14. The company’s head of corporate relations, Simon Westaway, said that the carrier also hopes to start flying in 2010 to one or two additional destinations in mainland China.

India-based Jet Airways has initiated a daily flight between Delhi and Hong Kong, Asia Pulse reported. This is the company’s second daily flight from India to Hong Kong, the other one being from Mumbai. The route will be operated by Airbus 330-200 aircraft.

China Southern Airlines will increase the frequency of its link from Dhaka to Chinese Guangzhou to three times a week starting October 11, China Daily writes. Under the new timetable the airline will fly from Guangzhou to the capital of Bangladesh on Tuesday, Thursday and Sunday. Flights in the opposite direction will be carried out every Monday, Wednesday and Friday, Gao Bo, representative of the company in Bangladesh, said.

China Southern Airlines will increase the price of a return ticket for the link to US$300 from US$150, excluding airport taxes. Nevertheless, Gao Bo said 70 percent of the tickets for October 11 have already been sold.

Hong Kong-based Cathay Pacific Airways Limited has named Clement Au country manager for UAE and Oman, Middle East Company News reported. Clement joined the air carrier in 1998 and initially served in the Engineering department. After that, he served in various departments of the company, including Marketing, Revenue Management, Customer Information Systems and the air carrier’s Canadian office.

Hong Kong-based Dragonair, a subsidiary of Cathay Pacific announced a new schedule for its flights to Dhaka and Kathmandu, effective October 1. According to the new arrangement, the night route between Hong Kong and Kathmandu will fly via Dhaka. The flights, which will be operated by A330 aircraft, will be increased from three a week to five.

Hong Kong-based Cathay Pacific Airways said that the September 2009 combined traffic figures for the company and its subsidiary, Dragonair, show a slump in passenger number and cargo and mail tonnage compared to September 2008.

The two airlines carried 1,840,082 passengers in September 2009, by 2 percent less compared to the same period last year. Capacity for the month, measured in available seat kilometers dropped by 9.7 percent. The load factor for September 2009 increased by 7.9 percent to 80.2 percent. For the first nine months of the year, the number of passengers carried has decreased by 3.8 percent compared to a capacity decline of 3.9 percent.

In September 2009, Cathay Pacific and Dragonair carried a total of 133,301 tons of cargo and mail, a decrease of 5.8 percent compared to September 2008, while the cargo and mail load factor rose by 7.9 percentage points to 74.40 percent. Capacity for the month, measured in available cargo/mail tonne kilometers, decreased 13.6 percent. For the first nine months of the year, tonnage has fallen by 12.3 percent against a capacity reduction of 13.9 percent.

China Southern Airlines will start flying from Zhengzhou, Henan Province, to Bangkok, Thailand, from October 25. The return service will be operated daily and will fly via Guangzhou, Guangdong Province.

Russian air carrier Transaero said it has obtained approval from the Federal Air Transport Agency’s commission to operate regular flights between Moscow and Beijing, ITAR-TASS reported. The company may initiate up to three flights a week. Transaero has also submitted an application seeking accreditation from the Chinese aviation regulator.

China-based Hainan Airlines has received approval from the U.S. Department of Transportation to initiate flights between Beijing and Honolulu, Hawaii. The air carrier may launch the service early in 2010. Initially, the company will fly this route once a week with plans to boost the number of flights to three a week. The service will be operated by Airbus A340-600 aircraft.

Chinese private United Eagle Airlines has raised RMB380 million financing from three investors, news site Caijing reports, citing the company’s chairman, Li Haiying.

The financial backers are the Commercial Aircraft Corporation of China, Sichuan Airlines and Sichuan Communications. The companies have invested respectively 47 percent, 41 percent and 12 percent of the total amount. Li said that United Eagle targeted to improve its service in southeastern China, specifically Yunnan, Gizhou and Sichuan Provinces.

U.S.-based Boeing said yesterday that Boeing Shanghai Aviation Services has inaugurated its two-bay hangar situated at Shanghai Pudong Airport. Boeing Shanghai Aviation Services, a joint venture between Boeing, Shanghai Airport Authority and Shanghai Airlines is a maintenance, repair and overhaul facility providing line maintenance and heavy maintenance as well as upgrades for airplane interiors, avionics and in-flight entertainment systems.

Thailand-based air carrier Thai Airways International Public Company Limited will start flying three times a week between Hong Kong and Phuket from Oct 25. The route will be operated by Airbus 330-300 aircraft.

Solar power

Chinese photovoltaic cells and modules maker Suntech Power Holdings said it had completed and connected to the grid a 10 MW utility-scale solar power project in Shizuishan, Ningxia Autonomous Region.

The 10 MW ground mount solar system is powered by more than 37,000 Suntech solar panels and is the first phase of a 50 MW solar plant. The project is expected to be completed by 2011 in cooperation with Suntech’s partner, China Energy Conservation Investment Corporation. Suntech has a minority share in the recently completed Shizuishan solar plant.

Under a strategic agreement, Suntech and CECIC intend to focus on the development of large-scale on-grid solar projects, urban building integrated PV projects, rural off-grid solar projects, and wind-solar hybrid projects. CECIC will primarily be responsible for project investment and solar project development, and Suntech will provide solar products, system design, installation and technical support.

U.S. energy-tech company American Superconductor said Tuesday that it had inked an over US$100 million deal to supply electrical components to Chinese wind turbine maker Sinovel Wind Corp.

The contract binds American Superconductor to begin shipping sets of core components in March next year. Completion is due by the end of 2011.

The company’s electrical components include its proprietary PowerModule PM3000W converter. It will be integrated into the Sinovel’s SL3000 series wind turbines, which have a rated output of 3 MW. The turbine maker Sinovel has already constructed several of its 3 MW units for the Shanghai Donghai bridge offshore wind farm.

Chinese solar-power products manufacturer Trina Solar Limited said it has extended the company’s eight-year supply agreement with Jiangsu Zhongneng Polysilicon Technology Development Co Ltd, a subsidiary of GCL-Poly Energy Holdings Limited by an additional five years.

Under the adjusted terms of the contract, the total consideration will remain unchanged from the combined total of the original and supplemental agreements signed in 2008, whereas additional polysilicon and wafer deliveries will be provided starting in 2016 for a five-year period at pre-determined shipment volumes and prices.

The agreement also includes a price adjustment clause that offers a market-linked price formula. GCL-Poly will supply Trina with polysilicon and wafers enough for the production of some 8,500 MW of solar modules over a period of 13 years.

China’s solar power generation capacity could jump to 1 GW by 2011 from the current 140 MW, according to a report by GTM Research.
If the government is able to speed up approval of projects and distribute funds quickly, the installed capacity could grow to roughly 1.8 GW.

China is poised to become a breakout star in the solar world as the government embarks on ambitious plans to dramatically increase the country’s generation capacity. Earlier this year it announced two programs that it hopes will help out domestic solar energy equipment manufacturers, hit by a cut in generous solar incentives in European countries and the recession.

The first incentive program would subsidize the costs of installing solar energy systems on building. The government proposed offering is up to RMB20 per watt for solar-panel installations that are 50-kW or larger. That amount could pay for 50 percent to 60 percent of a system’s installation costs.

The second program, called the Golden Sun, would see the government paying for 50 percent of the costs of building grid-connected solar power projects and up to 70 percent for off-grid projects in remote areas.

The government also is expected to announce a feed-in tariff programme for setting solar electricity prices. It could be no less than CNY 1.09 per kilowatt-hour.

Anwell Technologies, a Chinese supplier of manufacturing equipment for the optical disc and solar industries, said on October 5 it could provide up to 1.25 GW of solar panels for a thin film solar project in California developed by U.S.-based Solargen Energy.

Anwell’s wholly owned subsidiary Sungen International Limited has signed a non-binding Memorandum of Understanding with Solargen to supply amorphous silicon thin film solar panels. Starting from 2011, Sungen will supply an estimated 2 MW of capacity to Solargen per week.

“This MOU marks another milestone in our move into the solar business, providing us with a gateway into the burgeoning renewable energy market in the United States,” said Anwell’s chairman and CEO Franky Fan.

Chinese solar products maker Renesola on October 5 closed its follow-on public offering of over 15 million American depository shares (ADSs) securing net proceeds of US$70.7 million. Each ADS represents two shares of no par value in the company.

The bookrunners for the offering were Credit Suisse Securities (and UBS AG. Lazard Capital Markets LLC acted as a co-manager.

Swiss advanced composite materials developer Gurit said last Thursday it had acquired a majority stake in structural foam company China Techno Foam. Gurit has taken over 66 percent in the Chinese company from Japanese Daiwa Seisakusho Corp and Hiromoku Giken for an undisclosed sum. The acquired company will primarily produce PVC foam products for the Chinese wind turbine blade market.

Taiwanese Solar Applied Materials Technology has obtained a TW$3 billion syndicated loan from a bank consortium led by Chang Hwa Bank.
The funds will be used to finance the company’s business expansion and to repay previous loans.

The three-year loan has an interest rate of around 1.9 percent, adjustable in accordance with the company’s profit every half year.
Comprising 12 local members, the consortium also includes Bank of Taiwan, Land Bank of Taiwan and Taipei Fubon Bank.

Construction of the two megawatt amorphous silicon membrane solar power plant based in Bengbu, Anhui Province, is currently underway. It is said that once finished, the power station will be the biggest of its kind in Asia. A six kilowatt pilot station has already been constructed and it is expected that the power plant will become operational at the end of 2009.

A 2 MW rooftop solar power plant has recently become operational in Hangzhou, Zhejiang Province. The RMB64.62 million project is funded by Zhejiang Energy Conservation Industry Development and is expected to produce 2 million kWh per year. CHINT Group delivered the solar products for the project.

Chinese photovoltaic (PV) products maker ET Solar Group said it had selected U.S. Solar Distributing as its module distributor for the United States. U.S. Solar Distributing is a wholesale distributor of solar PV modules, inverters, mounting systems and accessories. The company has a network of distribution centers across the United States

This industry report brief is courtesy of Aii Data Processing.