China Industry: Oct. 6

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Oct. 6 – This is a regular series of relevant industry news from around China.

Air transport
China Southern Airlines will start flying daily between Moscow and Guangzhou via Urumqi by the end of this month, China Knowledge Press reported, citing RIA Novosti. Currently, the air carrier operates four services to Moscow a week.

China Southern Airlines and Sinotrans & CSC Holdings Co Ltd, a China-based company offering logistics services, last Thursday commenced a charter cargo route from Shanghai to Luxembourg, China Industry Daily News reported, citing state media.

Under a strategic cooperation contract inked in June by the two parties, they will conduct a number of additional cargo flights between the two cities by the end of this year.

Hong-Kong-based Cathay Pacific Airways said on Wednesday it had inked a new code-share agreement with Alaska Airlines, a wholly-owned subsidiary of Alaska Air Group Inc.

Bookings for the new code-share services started September 29 for travel from October 7, Cathay Pacific added.

Under the deal, Cathay Pacific’s “CX” code will go on Alaska Airlines flights between the cities of Seattle and Portland and three of Cathay Pacific’s North American gateway cities – Los Angeles, San Francisco and Vancouver.

Hainan Airlines has started flying between Beijing and Bangkok, Thailand, OANA reported.

The company will operate the route every Monday, Wednesday, Friday and Sunday, Tang Wei, Hainan Airlines’ Bangkok manager, said.

Mandarin Airlines Limited, a China Airlines Ltd spin-off, will start flying three times a week between Taichung, Taiwan, and Fuzhou, China, from November 15, Asia Pulse reported citing unnamed company sources.

The new service will boost the number of weekly flights from Songshan, Taichung and Kaohsiung airports to Fuzhou, to ten. Taiwanese air carriers TransAsia Airways and Uni Air currently operate the existing seven weekly services.

Chinese out-of-home advertising platforms operator AirMedia Group Inc said on Thursday it had renewed its concession rights agreement with China Southern Airlines for five years from October 1, 2010 to September 30, 2015.

Under the deal terms, AirMedia will operate digital TV screens in the economy class as well as the video-on-demand system and portable multi-media devices in the business and first class of China Southern Airlines’ aircraft.

Solar power
Chinese solar energy firm Yingli Green Energy Holding Co Ltd is considering a four-fold boost in production capacity to 4 GW by 2011 in response to international demand, China Daily reports today, citing a company official.

CFO Bryan Li told the daily that the company, which makes photovoltaic (PV) modules and installs PV systems, has an estimated production capacity of 1 GW at present while orders for 2011 stood at 4 GW at end-June.

In August Yingli broke ground on a 100 MW multi-crystalline silicon solar cell plant in Chinese province Hainan. The plant is estimated to cost RMB770 million and is slated for completion by May 2011. At the same time, the company’s affiliated polysilicon making plant, Fine Silicon, became operational with designed annual capacity of 3,000 tonnes.

Yingli may also seek subcontractors to meet growing demand, Li said.

According to him, the company, which exports 90% of its production to the US and Europe and has a 10% market share in Germany, would not be affected by the expected slowdown in the PV markets in Europe after the reduction of government subsidies, as the price of polysilicon is falling as well. Li added that the gross margin of companies, whose activities cover the whole production chain, such as Yingli, would not be reduced.

The export-oriented Chinese company is also looking to potential markets in India, Australia and the US to reduce its dependence on European customers.

To curb currency losses from the euro devaluation, Yingli plans to slightly increase prices by 3 percent to 5 percent, expecting to earn an additional US$50 million-80 million.

Chinese solar photovoltaic (PV) company Solargiga Energy Holdings Limited today confirmed it has agreed to acquire 51 percent in Qinghai Chenguang New Energy Co for RMB45.9 million.

Solargiga announced its intention to buy the stake in July this year and has now come to realize this plan.

Qinghai is a joint venture, where three individual shareholders are owners of the remaining 49 percent. Upon completion of the acquisition, the company will start construction of a factory to produce 2,000 tons of monocrystalline silicon solar ingots per year. The investment volume of this project amounts to RMB300 million, and 30 percent of the sum will be secured by the joint venture’s owners and the rest will come from bank loans. It is a two-phase project and the plant will reach its full capacity in mid-2013.

Taiwanese photovoltaic (PV) firm Delsolar Co Ltd said on Monday it had agreed to collaborate with IBM Corp in the development of a new efficient thin-film solar cells technology.

The new technology is based on the use of earth-abundant non-toxic and inexpensive materials, compared to the use of silicon, cadmium telluride and other components in former thin-film technologies, and is designed for commercial applications, Delsolar said in a statement.

IBM added that it has recently presented record solar cell efficiencies using copper zinc tin sulphur selenide (CZTS).

The new technology can also provide enhanced spectrum sensitivity, reduced working irradiance, wider temperature latitude, notable rise in power output, and adjustable light absorbing properties.

IBM said it is already co-operating with Japanese Tokyo Ohka Kogyo Company Ltd in the development of manufacturing tooling and chemistry needed for this technology.

U.S. photovoltaic (PV) systems firm Satcon Technology Corp said on Wednesday it had agreed to provide core manufacturing processes and technologies to Chinese GCL Solar Energy Technology Holdings Inc to improve production of GCL’s 500-kW solar PV inverters.

GCL and Satcon have worked together on a number of large solar projects in China. As part of the current agreement, GCL will commission a production unit in Nanjing, eastern China, which would bang out more than 500 MW of the inverters in 2011. Production will start in March 2011. GCL has agreed to buy from Satcon the capacity to manufacture at least 300 MW annually at the Nanjing facility.

The output from the Nanjing plant, combined with that of Satcon’s expanded unit in Ontario, is seen to boost the company’s global manufacturing capacity to more than two GW a year.

Wind power
U.S. industrial giant General Electric said it had agreed with Chinese Harbin Electric Machinery Co Ltd, a unit of Harbin Power Equipment Co Ltd, to set up a 49/51 joint venture in China to make wind turbines.

With this move, GE aims to enhance its position on the Chinese wind market, which is valued at US$13 billion. The government’s supportive green energy policies additionally boosted GE’s interest towards the Chinese market, it said.

The entity will produce wind turbines with GE design for offshore and near-shore applications in China. It will also be engaged in the provision of sales and customer support and commissioning and maintenance services.

By 2020, China’s installed wind power capacity is expected to grow by some 500 percent to 150 GW, GE said. At the same time, electricity demand in the country is rising by 12 percent each year, providing more and more opportunities for firms from the energy sector.

GE and Harbin Power have worked together since 2004 on the provision of heavy duty gas turbines and related services. In addition to the joint venture agreement, Harbin will buy a 49% stake in GE’s Shenyang wind factory, which will keep on the production of onshore wind turbines.

At present, GE has some 21 GW installed wind capacity around the world. The company has been present on the Chinese energy sector for nearly 100 years.

Chinese wind power maker Xinjiang Goldwind Science and Technology has returned to plans to float on the Hong Kong Stock Exchange but has slashed both the target amount and the offer price.

Citing “unexpected and excessive market volatility,” in mid-June the manufacturer mothballed plans for a HKD9.09 billion initial public offering of 395.2 million shares priced in the range HKD19.80 to HKD23 apiece.

Now the company expects to raise HKD7.1 billion, offering 395.3 million new shares at a price range of HKD15.98 to HKD 17.98 each, indicating it could scoop up between HKD6.32 billion and HKD7.1 billion. The public offering kicked off on September 27 and closed on September 30. Trading is expected to begin on October 8.

Five investors have already agreed to subscribe for a combined US$190 million Goldwind shares. World Bank’s unit International Finance Corporation will take US$75 million worth of shares, Hong Kong-based Chow Tai Fook will subscribe US$40 million shares, Shanghai Industrial Financial Holdings will invest US$30 million, venture capital firm VantagePoint Venture Partners US$25 million and insurance firm PICC US$20 million.

China is the world’s fastest-growing wind energy market, with a target to install 150 GW of wind power by 2020, on top of its current capacity of 25 GW. Figures by Bloomberg New Energy Finance showed that China pumped US$34.5 billion in clean technologies in 2009, almost double than the next closest rival the United States.

In the face of fierce competition, Goldwind sold more than 2 GW of turbines last year, up from 1.37 GW in 2008.

This industry report brief is courtesy of Aii Data Processing.