China Solar company move factory to USA

Posted by admin in News

Nov. 23 (Bloomberg) — Chinese solar companies are considering shifting manufacturing to other countries to avoid paying tariffs that may result from a trade complaint.

LDK Solar Co. and JA Solar Holdings Co. said they may move some production operations if the U.S. imposes duties on solar products imported from China. Suntech Power Holdings Co., the world’s biggest solar-panel maker, said the dispute would be “extremely damaging to the entire U.S. solar industry.”

The statements, made during conference calls with analysts yesterday, show that Chinese manufacturers are developing strategies to avoid potential duties, and that the complaint may not give U.S. solar companies the relief they’re seeking.

“In the short-term, maybe we will work through partnerships,” said Fang Peng, chief executive officer of Shanghai-based JA Solar. “In the longer term, we’re also evaluating the possibilities to set up operations in the region close to the customers.”

JA Solar hasn’t decided how to respond to the trade case because it hasn’t been resolved, Ming Yang, JA Solar’s vice president of business development and corporate communications, said on the call.

“To be prudent, I think we need to have a solution, a workaround solution,” he said.

LDK may move some production to Africa, Europe or North American sites including California if necessary, the Jiangxi, China-based company said on a conference call with analysts.

Circumventing Tariffs

“There are way to circumvent” tariffs, Jesse Pichel, an analyst at Jefferies Group Inc. in New York, said yesterday in an interview.

Chinese companies may avoid the tariffs by buying solar cells from Taiwanese companies and assembling them into modules outside China, Pichel said. Suntech and Canadian Solar Inc., which makes panels in China, already have plants in North America, and JA Solar has an existing relationship outside China with a company to which it could outsource some manufacturing.

SolarWorld Industries America Inc., the Hillsboro, Oregon- based unit of Germany’s SolarWorld AG, and six unnamed U.S. manufacturers filed the trade complaint last month with the U.S. International Trade Commission and Commerce Department, asserting that import duties on Chinese imports will compensate for unfair financial support China provides to its solar industry.

Higher Solar Prices

The U.S. imported $2.4 billion of solar panels from China in 2010, according to the Solar Energy Industries Association.

A tariff would increase prices for developers, homeowners, utilities and others who purchase solar panels in the U.S., Pichel said. “The net impact is that we raise the cost of solar to the U.S. consumer.” He said it’s likely the trade complaint will pass and tariffs will be imposed.

Tariffs on Chinese panels may also cut into business for GT Advanced Technologies Inc., which sells equipment used in solar manufacturing, Chief Executive Officer Tom Gutierrez said in an interview.

Gutierrez, who opposes the tariffs, said he’s concerned Chinese manufacturers may retaliate against U.S. companies, including his, by stopping purchases. “It’s natural,” he said. “If they’ve been punished by the U.S., why would they want to reward a U.S. supplier?”