Chinese monocrystalline silicon solar ingots and wafers manufacturer, Solargiga Energy, yesterday announced that Jinzhou Yangguang Energy, a wholly-owned subsidiary of the company, entered into a formal joint venture agreement with two independent third parties, Kinmac Holdings Limited and the other Joint Venture Partner, for the establishment of Jinzhou Jinmao Photovoltaic Technology in Jinzhou, Liaoning Province of the PRC, marking its first step to expand to downstream business.
The Joint Venture Company will principally engage in the production and sales of photovoltaic modules as well as design and installation of photovoltaic systems. The amount of registered capital of the Joint Venture Company will be RMB40,000,000, of which RMB20,400,000 will be contributed by Jinzhou Yangguang in cash to be funded by way of internal resources of the Group. Kinmac Holdings and the other Joint Venture Partner will contribute RMB14,000,000 and RMB5,600,000, in cash to the registered capital of the Joint Venture Company, respectively. The amount of total investments of the Joint Venture Company will be RMB90,000,000.
Upon establishment, the Joint Venture Company will be held as to 51% by Jinzhou Yangguang, as to 35% by Kinmac Holdings and as to 14% by the other Joint Venture Partner, respectively.
Kinmac Holdings is a wholly-owned subsidiary of Kinmac Solar Corporation (formerly known as Lucky Power Technology Company Limited), a company incorporated in Taiwan in 2004. Kinmac Solar Corporation and its subsidiaries principally engaged in the production of standard photovoltaic modules, design and installation of solar panel modules as well as building integrated photovoltaic in Europe and Taiwan. Kinmac Holdings possess extensive experience in the installation of BIPV systems.
Besides, the Group announced its unaudited first quarter results for the three months ended 31 March 2009. During the period under review, the Group recorded a turnover of approximately RMB176,340,000, representing a decrease of 48.4% when compared with the same period last year.
The Group recorded a gross loss of approximately RMB46,883,000. Loss attributable to equity holders was approximately RMB68,602,000.
The decrease in turnover was mainly attributable to the decline in product selling prices caused by the recent global economic slowdown. As a result of the continuous fall in raw material prices and product selling prices after the review period, a loss on diminution in value of inventories was recorded, leading to the loss attributable to equity holders.
Commenting on the formation of the Joint Venture Company and the Group’s 2009 first quarter results, Mr. HSU You Yuan, CEO and Executive Director of Solargiga, said, “Although the solar energy industry is inevitably affected by the global financial crisis, the Group believes the industry outlook in the PRC remains promising, given the determination of the PRC government to promote the solar energy industry.
To capture opportunities arising from the expanding market, Solargiga has decided to capitalize on its existing business structure to expand its product range throughout the photovoltaic supply chain. Together with Kinmac Holdings’ extensive experience in installation of BIPV systems and Solargiga’s leading market position in manufacturing of monocrystalline silicon solar ingots and wafers, Solargiga is well-poised to capture the enormous business opportunities through expanding its business to the downstream installation of BIPV systems.