Vietnam: Work halted on massive Chinese solar panel plant

Vietnam: Work halted on massive Chinese solar panel plant

Authorities in Hanoi suspended the project after accusing JA Solar Hong Kong
Investment Limited (JA Solar), China's leading manufacturer of solar power
products, and authorities in Bac Giang province of having violated proper
construction protocols.

The government issued an investment license for the $273 million project on
December 30, but later learned that JA Solar had held a breaking ground
ceremony a month earlier, on November 27.

On March 10, Director of Bac Giang's Management Board of Industrial Parks,
Mr. Nguyen Anh Quyen, held a press conference in which he claimed that JA
Solar had selected the date based on a belief that November 27 was a lucky
day. He admitted he approved the company's actions.

Central government investigators later found that the board illegally
granted JA Solar official permission to build the plant on February 21, well
before environmental authorities had completed a review of its environmental
impact assessment.

The company submitted the report to the Ministry of Natural Resources and
Environment on February 20 and expected approval on May 4.

Mr. Quyen told local media that work will only resume after the
environmental assessment process is complete.

Both Mr. Quyen and the Chairman of the Bac Giang Provincial People's
Committee, Mr. Nguyen Van Linh, have apologized for having allowed JA Solar
to build the plant without central government approval.

The officials pledged the project will not damage the environment in any
way.

Officials hope that the plant, one of the largest projects in the province,
will generate more than 3,000 jobs.

JA Solar reported $2.15 billion in revenue in 2015 and operates eight solar
power product factories in Europe, the US, and Japan. In the third quarter
ending September 30, 2016, JA Solar earned income of $6.6 million, compared
to $38.8 million in the third quarter of 2015 and $24.6 million in the
second quarter of 2016. During the first nine months of 2016, its net
revenue increased 9 per cent year-on-year to $624.3 million.

Last July, JA Solar signed an agreement with the Saigon Bac Giang Industrial
Park JSC (SBG), a subsidiary of the Ho Chi Minh City Stock Exchange
(HoSE)-listed Kinh Bac City Development Corp. (KBC), to lease 88 ha of land
at the industrial park to develop the solar cell manufacturing project,
which could have investment of over $1 billion.

The JA Solar plant has investment capital of $320 million planned for the
first three years. Once operational, the plant will have an assembly
capacity of 1.5 gigawatts (GW) and generate revenue of $500 million per
year.

The Chinese company has a nameplate solar cell capacity in Malaysia of close
to 1GW, and the Vietnam plant would serve to augment its overseas production
hubs that are intended to serve the US and European markets; markets that
remain prohibitively expensive for Chinese-produced solar components due to
the various trade barriers.

Last September, the company voluntarily withdrew from the EU's Minimum Price
Undertaking (MIP), a move triggered by the continued price declines in solar
modules and JA Solar's increased overseas capacity.

At the time, JA Solar CEO Mr. Baofang Jin said that the current MIP does not
reflect recent price trends in the market, and stressed that it "adversely
impacts our ability to execute our business strategy."

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Link to Original Article:
http://english.vietnamnet.vn/fms/business/174412/work-halted-on-massive-chin
ese-solar-panel-plant.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com