Growing inventories, reduced demand, and pricing pressure are going totake their toll on every company in the solar industry — but some firms are more vulnerable than others.
Renewable Energy Corporation (REC) has said it will scale back its photovoltaic production activities due to weak market demand.Around 500 employees are expected to be affected with what the firmcalled "temporary layoffs." REC intends to halt production at its solar cell plant in Narvik, Norway.
REC has shut off capacity temporarily in the past during a similarly difficult quarter for the industry — in Q2 2009,
The Norway-based vertically-integrated solar said that it will reduceproduction of its solar cells, wafers and modules as of July 1 in"response to the current market conditions". It added that it expectsits second quarter operating results to be reduced to a level "wellbelow" the first quarter of the year. REC went on to say that averageselling prices for polysilicon were fairly stable, but the averageselling prices for wafers and modules were down four percent compared to the previous quarter.
In a statement, the company said: "REC will initiate a process withthe trade unions, with the intention to halt production at the oldestwafer plants at Herøya, Norway, and at the solar cell plant in Narvik,Norway."
Wafer production is expected to be reduced by 125 megawatts in thethird quarter of this year which represents 30 percent of its Norwegianwafer capacity. Cell and module production will be reduced byapproximately 50 megawatts in the same period. The company added thatREC-branded modules will not be manufactured under contract by thirdparties in the third quarter.
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