China Industry: Sept. 28

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Sept. 28 – This is a regular series of relevant industry news from around China.

Air transport

Air France and China Southern Airlines have signed a joint venture agreement which is based on sharing revenues on the Paris-Guangzhou route. The agreement will come into effect on November 1, 2010.

Currently, all Air France and China Southern flights between Paris and Guangzhou are operated on a code-share basis. Several other connecting destinations beyond those two cities will gradually be introduced on a code-share basis within the framework of the joint venture.

Air France and China Southern will jointly operate the JV. The companies will set up a management committee, comprising five working groups in charge of network management, revenue management, sales, products and finance.

China Eastern Airlines’ August passenger volume stood at 6.51 million, an increase of 48 percent compared with a year earlier. The airline’s passenger throughput on domestic routes rose 44.98 percent to 5.52 million, while its passenger load factor jumped 5.81 percentage points to 83.63 percent.

In August 2010, the company carried 119,600 tons of mail and cargo, an increase of 49.17 percent, with load factor rising 5.98 percentage points to 55.89 percent.

China Southern Airlines’ passenger volume for August increased 16.7 percent compared to last year and 4.8 percent compared to July 2010, China Knowledge Press reported.

The company’s August passenger load factor jumped 5.4 percentage points to 82.8 percent, while its cargo and mail throughput increased 29.6 percent.

China Southern Airlines will initiate a direct service between Guangzhou and Brisbane, Australia. The company will fly the route three times a week using Airbus A330 aircraft. China Southern will also boost the number of its weekly services to Sydney and Melbourne.

During the period between January and May, the number of Chinese travelers going to Australia increased 10 percent to 204,000.

Air China has started direct flights between Chengdu and Tokyo. The company will fly on the route two times a week. Japan eased its visa requirements for Chinese tourists in July, and the number of Chinese tourists to Japan continues to increase.

Hainan Airlines will launch a direct service between Beijing and Bangkok on September 29. The Beijing – Bangkok route will be operated four times a week. The air carrier started flying to Phuket two months ago.

Hainan Airlines will commence a direct service between Beijing and Cairo on November 5. The company will fly on the route two times a week with Airbus A330 aircraft. This is the airline’s third service to Africa. Hainan Airlines already flies via Dubai to Khartoum, Sudan, and Luanda, Angola.

China Eastern Airlines’ Yunnan arm started flying between Kunming City, Yunnan Province, to Chiang Mai in Thailand on September 9. The company will operate the route twice a week.

Solar power

Chinese photovoltaic products manufacturer LDK Solar said it will collaborate with the U.S. National Renewable Energy Laboratory on research and development in the field of silicon materials and photovoltaic devices.

In a memorandum of understanding, the Chinese firm and NREL, the primary renewable energy laboratory of the U.S. Department of Energy, agreed to jointly investigate silicon feedstock related issues, develop standards for solar grade silicon and evaluation methods and to research crystallization technologies and their commercial implementation.

China’s Anwell Technologies, a supplier of manufacturing equipment for the optical disc and solar industries, has landed a contract to supply at least 180 megawatts of modules within three years to an undisclosed customer.

In a press release on Monday, the thin-film manufacturer pegged projected revenue at upwards of US$300 million throughout the duration of the deal. The first shipment is scheduled for October. Anwell has already received a deposit from the customer.

Franky Fan, Anwell’s executive chairman and chief executive officer, told news outfit Recharge that this is the company’s biggest contract in terms of both capacity and revenue. He was tight-lipped about the customer, but revealed the modules will not be used on the Chinese market.

“The Chinese solar market is not matured yet — it has only about 2 percent of the world’s market share,” said Fan.

“Therefore we have no short-term plans to get orders from (the Chinese) market. But in the future, China’s market could become very big,” he added. Anwell latched onto solar power in 2008 and kicked off mass production at its thin-film solar factory in Henan, China, in March this year.

German solar energy company Centrotherm Photovoltaics said its subsidiary Centrotherm Sitec GmbH had won a tender to supply several multi-crystalline ingot furnaces to a Chinese company for a price in the single-digit million euro range.

Sitec will carry out shipments in the first quarter of 2011. These will be followed by additional deliveries, as the Chinese firm has ordered further polysilicon production systems, seeking to expand its capacity.

Centrotherm Photovoltaics provides turnkey production lines and single equipment to solar companies for the manufacturing of silicon, crystalline solar cells and thin-film modules. The company sees revenue potential of EUR50 million in the crystallization and wafer field by 2011.

Chinese solar firm Solargiga Energy Holdings said it had agreed with Liaoning Oxiranchem to set up a joint venture to build and operate a 500-megawatt multicrystalline silicon solar ingots and wafers plant.

With this move, Solargiga aims to enhance its multicrystalline silicon solar operations and speed up a production expansion plan. The company said it plans to pursue other business deals to boost its market share in future.

Total investments in the production facility will be about RMB675 million, while its registered capital is planned at RMB200 million. Solargiga will invest RMB74 million in the entity for a 37 percent stake.

The production facility, to be located in the city of Jinzhou, in the northeastern Chinese province of Liaoning, will include 50 casting furnaces, 75 wire saws and other equipment. It will be built in two phases over five years. The first phase, to have a 200-megawatt capacity, is expected to be completed in two years, with the second 300-megawatt phase to take three years. Solargiga will be responsible for the sale of all the plant’s production, it said.

German solar energy company Centrotherm Photovoltaics announced that it has commissioned a 60 megawatt photovoltaic cell production line for Chinese state-owned company Lu’an Group Corp.

The German firm said further that it has laid a foundation stone for additional lines at the site in Changzhi, central China, for the manufacturing of cells to a level of between 300 megawatts and 360 megawatts. Overall, the agreement between the two companies calls for expanding Lu’an’s manufacturing capacity to 1 gigawatt over the coming years.

In addition, Centrotherm Photovoltaics’s wholly-owned subsidiary Centrotherm SiTec GmbH is establishing production systems at Lu’an Group for the production of polysilicon with annual production output in excess of 3,000 tons.

Centrotherm Photovoltaics provides turnkey production lines and single equipment to solar companies for the manufacturing of silicon, crystalline solar cells and thin-film modules. The company envisages revenue potential of EUR50 million in the crystallization and wafer field by 2011.

The Danish subsidiary of German PVA Tepla, a manufacturer of systems for silicon crystallisation, got another float-zone order worth nearly EUR5 million from a Chinese firm.

Earlier this summer, Chinese Tianwei New Energy Wafer made an order of about the same value, with first deliveries scheduled for this year.


Chinese alternative energy firm Hong Kong Energy Holdings said its net loss for the first half of 2010 had deepened to HKD28.39 million from HKD5.87 million a year before. This translated into a basic loss per share of HKD0.0338, compared with HKD0.007.

In May 2010, HKE announced it had agreed to acquire the alternative energy business of its parent — HKC Group, which includes five wind farms, a waste-to-energy facility and an office in Beijing for HKD1.02 billion. The deal was part of a company plan to transform HKE to a fully-fledged alternative energy firm from a software developer.

Operating loss widened to HKD29 million from HKD15.4 million a year earlier, hit by impairments on software customer base and technical know-how and a one-off professional fee for the acquisition.

Revenue for the period, generated only by the software segment, dropped by 72 percent year-on-year to HKD1.37 billion, due to the new strategy of the firm. The alternative energy operations are expected to significantly contribute to sales later in 2010, HKE said.

Belgian wind-turbine gearboxes maker Hansen Transmissions International NV and British gearbox designer Romax Technology Ltd said they will jointly provide services to wind turbine manufacturing companies in China and South Korea.

The two firms’ activities will include the design, development and serial supply of gearboxes for multi-megawatt wind turbines. The serial supply can be provided through Hansen’s existing production facilities in Asia.

At the same time, Hansen and Romax will continue to work independently, as the collaboration agreement they have signed is non-exclusive.

This industry report brief is courtesy of Aii Data Processing.