OCI to raise capacity of Bintulu plants to 27,000 tonnes
KUCHING: South Korea’s OCI Co Ltd will raise the production capacity of one of its two polycrystaline silicon (Poly-Si) plants in Samalaju Industrial Park, Bintulu by 3,200 tonnes to 17,000 tonnes per annum on scheduled completion of its revamp project in the current quarter (3Q18).
The plant’s revamp work is funded with a capitalexpenditureofUS$33mil(RM134.6mil).
To further expand the capacity by another 10,000 tonnes, OCI plans to invest an additional US$78.7mil (RM321mil) to boost production at the second plant, which is expected to be completed in first quarter of 2019 (1Q19), OCI said when announcing its April-June 2018 financial results recently.
When fully completed, the Malaysian (Bintulu) plant will have an annual capacity of 27,000 tonnes, bringing the OCI group’s total capacity of 79,000 tonnes per annum. The group owns a major plant in South Korea with capacity of 52,000 tonnes per annum.
Poly-Si is used as the raw material by the solar photovoltaic (PV) and electronic industry.
OCI Bintulu plant was acquired from Japan’s Tokuyama Malaysia Sdn Bhd for some US$200mil in mid-2017.
According to media reports, Tokuyama had invested about US$1.99bil in the two plants to produce semiconductor-grade and solargrade Poly-Si. The plants have a combined annual capacity of 20,000 tonnes.
One of the manufacturing facilities was said to have been marred by quality issues. Tokuyama’s decision to sell the two plants was due to the deteriorating conditions of the Poly-Si market, and the company was unable to compete with Chinese rivals’ cheap offerings in the sale of Poly-Si for solar cells.
Following the plants’ take-over, OCI embarked on expanding the nameplate capacity of 13,800 tonnes to 17,000 tonnes per annum through upgrading, debottlenecking and engineering process improvements.
OCI’s production in Malaysia would address markets for high-efficiency multi-crystalline wafers competitive cost markets for mono wafers.
“We are ready to respond to the customer demand surge with inventory and products of Malaysian plant,operating at full capacity in 3Q18,” said OCI.
OCI targets to expand the share of Poly-Si supplied to mono wafer up to 60% this year from current 42%.
Due to the Malaysian plants’ competitive cost structures,OCI targets to cut all-in cost Poly-Si by 23% in 2020 (2016-2020E).
According to OCI, global solar PV market is forecast to contract this year due to a sudden solar PV p[olicy change in China,the world’s largest Poly-Si manufacturer.
The policy change has resulted in Poly-Si operation adjustment and inventory destocking. Besides no all announced Poly-Si expansion projects might materialise due to weak products prices and lack of bank financing.
OCI predicts the solar PV market to pick up from 2019 by improved solar PV economics and policy development.
Outlining the company’s strategies, OCI, the world’s No 3 Poly-Si maker, said it would continue with capacity expansion both to expand market share and lower cost of production.
For OCI Korea, it focuses on high quality for mono wafer and semiconductor while OCI Malaysia on products with competitive cost for mono and high-efficiency multi wafers.