China Industry: Oct. 24

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Nov. 24- This is a regular series of relevant industry news from around China.

Air transport
Air China booked a net profit of RMB3.811 billion for the first nine months of 2009, compared with a loss of RMB806 million the year before. The air carrier’s operating revenue was RMB36.459 billion, a decrease of 7.79 percent year on year while earnings per share stood at RMB0.32.

The company’s operating revenue for the period from July to September 2009 was RMB14.054 billion, an increase of 1.31 percent from the same period last year. In addition, operating expenses were RMB11.283 billion, a decrease of 15.32 percent.

Net profit, excluding the equities of minority shareholders, was RMB885 million, compared to a loss of approximately RMB2 billion in the third quarter of 2008.

China Southern Airlines booked a net profit of RMB322 million for the first three quarters of 2009, compared with a loss of RMB21 million for the same period last year.

The earnings per share stood at RMB0.05. The company’s operating revenue was RMB40.83 billion, 2.7 percent lower than in 2008. The air carrier’s net profit for the third quarter of 2009 was RMB284 million, compared with a loss of RMB830 million for the same period last year while  operating revenue was RMB15.948 billion, an increase of 9.49 percent year on year.

American Airlines, a subsidiary of AMR Corporation will start flying from Chicago to Beijing on April 26, 2010 with its first return flight scheduled for the next day, April 27. The air carrier has designated Boeing 777 aircraft to fly on its daily non-stop route to Beijing.

Hong Kong-based Cathay Pacific Airways has initiated a new service to Jeddah, Saudi Arabia. The air carrier will fly on this route through Dubai four times a week. The service will be operated by Airbus A330-300 aircraft.

China Southern Airlines’ subsidiary, Shantou Airlines Company, carried 1.494 million passengers and 11,822 tons of cargo and mail in the first ten months of this year. During this period, the air carrier, which is focused on coastal areas in southeast China, also operated 16,286 flights. According to earlier reports, its parent, China Southern, booked a net profit of RMB322 million in the first three quarters of 2009.

Hainan Airlines will start flying between the Chinese capital Beijing and Khartoum, the capital of Sudan. The route will be operated twice a week by an Airbus 340-600 aircraft. The air carrier’s other flight to Africa is between Beijing and Luanda, the capital of Angola, via Dubai.

Commercial Aircraft Corp of China will establish its C919 aircraft final assembly line in Shanghai’s Pudong New District. Construction work on the project is expected to begin by the end of the year. It is anticipated that by 2016 the assembly line will be able to make 20 C919 jets and 50 ARJ 21-series aircraft a year.

Taiwan-based China Airlines has opened an aircraft engine testing facility. The platform is based at the company’s maintenance division in Taoyuan County in northern Taiwan.

The air carrier’s chairman, Philip Wei, said that the engine testing facility utilizes an advanced control and testing system, ASE2000LX, that can handle various models of Boeing and Airbus.

Solar power
U.S.-based solar photovoltaic equipment provider Applied Materials has opened a solar research and demonstration facility in Xi’an, China.

The company’s Solar Technology Center comprises a laboratory and office buildings covering more than 400,000 square feet and contains an Applied SunFab thin film manufacturing line and a complete crystalline silicon pilot process. These lines are designed to simulate customer fabrication (fab) environments. The total investment in the multi-phase project is more than US$250 million.

China-based Astronergy Solar’s polycrystalline silicon module product CHSM6610P received the American UL and Canadian cUL authentications in October. UL, a non-governmental institution, is engaged in safety authentication for products intended for the U.S. market, while cUL is a safety authentication standard for products in the Canadian market.

The company added that in addition to the monocrystalline silicon series modules CHSM5612M and CHSM6610M that were previously certificated, all of its crystalline silicon module products have been approved for both American and Canadian markets. CEO Dr Liyou Yang said that recently, that the company had incorporated its American headquarters in San Jose, California.

U.S. power company Duke Energy said last Friday that it had tied up with Chinese energy company ENN Group to develop commercial solar power projects across the United States. The partners will focus on two types of photovoltaic designs – large utility-scale solar farms and commercial distributed generation solar projects producing electricity near the sites where it is utilized.

The business unit of the U.S. company, Duke Energy Generation Services will jointly develop, own and operate the projects with ENN. The latest cooperation agreement follows a memorandum of understanding announced in late September to collaborate in order to speed up the development of low-carbon and clean energy technologies.

Currently, DEGS owns and operates over 630 MW of wind power projects in the United States and plans to add another 350 MW by the end of 2010.

China-based Suntech Power Holdings said yesterday that its first U.S. manufacturing plant will be located in the Greater Phoenix, Arizona, area. The facility will have an initial capacity of 30 MW and is expected to start production in the third quarter of next year. The company said that its U.S. plant, will span approximately 80,000-100,000 square feet will have over 75 full-time employees at launch and may double its staff within the year as the North American market develops.

China-based solar cell and photovoltaic module maker Jiangsu Aide Solar Energy Technology will form a joint venture with a European PV system supplier to produce PV modules in China.

The joint venture will begin volume production in March 2010 with an initial capacity of 100 MWp. Aide Solar has received orders in excess of its existing capacity and has had to outsource production. With a capacity of 80 MWp for solar cells and 240 MWp for PV modules currently, Aide Solar will expand its PV module capacity in 2010. However, it will not increase the solar cell capacity and will continue to outsource production.

China’s finance ministry has picked hundreds of projects worth almost US$3 billion to bankroll under its subsidy plan to scale up solar energy generation.

The Golden Sun scheme was launched in July and will 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. It was designed to strengthen domestic demand for Japanese solar cells and panels, which are now being shipped abroad in mass volumes.

Once completed, the 294 projects selected for funding under the program should deliver 642 MW of solar capacity combined. But a list of 275 project is posted on the ministry’s website, with two proposals comprising ten separate installations each.

Renewable energy
U.S. power company AES sold two fossil fuel power plants in China last year and is now tapping into wind power to take advantage of local environmental practices.

The company’s chief executive, Paul Hanrahan, told the Washington Post that the country is shutting down old coal-fired plants and building new, more efficient ones in order to diversify energy and reduce carbon emissions. Operating coal-fired plants in China since 1990, AES is currently developing wind farms in Inner Mongolia and in Hulunbeier in northeastern China.

The latest wind power facility, featuring China-made wind turbines, was launched last month in Hulunbeier. Representing a joint investment for the United States and China. The project is tapping into Chinese subsidies for the sold electricity output. The company’s project in Huanghua receives US$0.089 per kWh of wind energy, compared with US$0.0525 for coal-fired electricity in the region.

An additional US$0.03 could come form European companies, exceeding their emission quotas, under the cap-and-trade system. According to the system, European entities can buy offsets from carbon-reducing projects in developing countries instead of reducing their own emissions.

Sticking to its goal of producing 15 percent of its electricity from renewable sources by 2020, China aims to expand wind-generating capacity to over 120 GW by that time.

A new joint venture for developing a 600 MW wind farm was agreed on Thursday by the U.S. Renewable Energy Group, local wind power developer Cielo Wind Power LP and China-based Shenyang Power Group, or SPG. So far, it is the first US-Chinese joint entity in a utility-scale wind power project, according to the parties.

Pursuant to the JV agreement, the 600 MW project in Texas, estimated at up to US$1.5 billion will be financed by a Chinese power industry alliance through local commercial banks. Herewith, SPG’s shareholder in China, A-Power Energy Generation Systems is committed to ship 240 units of its 2.5 MW wind turbines starting March 2010.

Upon completion, the utility-scale wind power project, spanning around 36,000 acres will generate environmentally-friendly electricity for 180,000 households.

Two Chinese manufacturers have joined hands to create a design and research institute for twin-blade turbines in Sweden, where the technology originated. Under the new joint venture institute, GC China Turbine and Wuhan Guoce Nordic New Energy will develop 2 MW and 3 MW two-blade turbines for large-scale onshore and offshore projects. GC China Turbine will contribute US$1.75 million in initial funding.

The partners will try to bring back a technology that was developed by Swedish company Nordic Windpower more than a decade ago. The prototypes were backed by a US$75 million government grant but this was not enough to offset against three-blade models that strode atop of the market. The commercial failure of the two-blade turbine sent Nordic Windpower into bankruptcy in 2005.

This industry report brief is courtesy of Aii Data Processing.