Hidup tanpa
subsidi BBM
By: Erkata
Yandri, Presiden Direktur PT. ENPROST Indonesia
subsidi minyak telah menjadi
topik yang serius bagi pemerintah. Kedua menteri Koordinator bagi perekonomian
dan menteri keuangan tidak ragu untuk berbicara secara terbuka tentang
kemungkinan pengurangan subsidi minyak. Hal ini dapat dipahami karena Indonesia
yang berstatus sebagai net oil importer sejak 2003 [...]
Living
without fuel subsidies
By: Erkata
Yandri, President Director of PT. ENPROST Indonesia Oil subsidies have become a
serious topic for the government. Both the coordinating minister for the
economy and finance minister do not hesitate to speak openly about a possible
reduction of oil subsidies. This is understandable because Indonesia’s status
as a net oil importer since 2003 [...]
China Solar: New Suntech Cuts And
Shrinking Stocks
There's a flurry of
news coming from the embattled solar sector, led by a sharp cutback
by Suntech (NYSE: STP) at its main US plant that looks suspiciously
like it is being ordered by Beijing part of a government rescue plan for the
struggling company. Meantime, JA Solar (Nasdaq: JASO)
and LDK (NYSE: LDK) are struggling just to stay listed as their
market values quickly evaporate. And in a rare but fleeting piece of good
news, Yingli (NYSE: YGE), Trina (NYSE: TSL) and others
are getting a temporary boost as they reclaim money they previously set aside
but will no longer need to use as provisions in the US anti-dumping
investigation against them.
Let's start with the
Suntech news, which looks intriguing because I suspect it reflects intense
political jockeying behind the scenes as this former sector pioneer struggles
to survive.Suntech says it
will shutter two-thirds of the capacity at its plant in the US state of
Arizona, bringing production down to just 15 megawatts from the capacity of
45 megawatts.
It blamed the
cutback on the industry's huge overcapacity and the higher costs of producing
in the US versus China, and said the move will result in the loss of 50 jobs.
It's impossible to know what happened behind the scenes in this move, and the
explanation of higher operating costs in the US is certainly logical and
reasonable.
But the decision
also sounds suspiciously like it was at least partly ordered by Chinese
government officials who are now negotiating a rescue package to bail out
Suntech and want to show their anger at the recent US decision to impose big
anti-dumping tariffs on Chinese-produced solar cells. Up until now, Suntech
had trumpeted this Arizona facility as proof that it was creating jobs in the
US as well as in China.
Suntech had also said
it could use its US facility to help it avoid the anti-dumping tariffs
imposed by Washington. So its decision now to suddenly idle two-thirds of the
plant's capacity seems like a complete reversal of its previous message,
leading to my conclusion that the move was at least partly engineered by
Chinese government officials. If that's the case, I wouldn't be surprised if
Suntech ultimately shutters the Arizona plant completely as part of its
eventual restructuring.
Moving on to other
matters, JA Solar and LDK have both put out announcements regarding their
tumbling share prices that have put them in danger of de-listing. In JA Solar's case, the
company has just engineered a 5-for-1 reverse share split to bring its New
York-listed shares above the $1 mark, a requirement to maintain their listing
on the Nasdaq main board. Meantime, LDK has also announced it
has been notified that its shares are in danger of de-listing after they also
fell below the $1 level for more than 30 days.
LDK will most likely
do its own reverse share split eventually to bring its shares back above the
$1 level, assuming its shares are still worth anything when it finalizes its
own rescue package now being hammered out with the government. These reverse
splits may help each companies' share price, but they do nothing to reverse
the fact that their market valuations have tumbled over the last year and a
half as the industry struggles with its worst-ever downturn. Both companies
now have market caps of about $120 million, representing a tiny fraction of
what they were worth before the downturn began.
Lastly, we'll look
quickly at the rare piece of good news for the Chinese solar companies
following last month's US finalization of anti-dumping tariffs against them.
That news has seenYingli,
Trina and presumably all the others say they will post one-time gains after
some provisions they took related to the US tariffs were unnecessary.
These specific
provisions were related to a part of the US investigation that would have
made punitive tariffs retroactive back to 90 days before the actual decision.
In the end, the US decided not to make the penalties retroactive, making
previous provisions taken by the Chinese companies unnecessary. At the end of
the day, however, these provisions were relatively small, totaling $13.7
million for Yingli and about double that amount for Trina. And of course
these small one-time gains will do nothing to address the much bigger cash
shortages and overcapacity now plaguing the industry.
Bottom line: Suntech's cutbacks at its U.S. plant could
foreshadow an eventual closure of the facility as part of a government rescue
package.
This blog was originally published on Young's
China Business Blog and was republished with permission.
Lead image: Shrinking budget via
Shutterstock
The information and
views expressed in this blog post are solely those of the author and not
necessarily those of RenewableEnergyWorld.com or the companies that advertise
on this Web site and other publications. This blog was posted directly by the
author and was not reviewed for accuracy, spelling or grammar.
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