Chinese

Opportunity of the Week: CSSC awards machine tool contract to European companies

CSSC Marine Power Co, a subsidiary of China State Shipbuilding Corporation (CSSC), has recently purchased a variety of production equipment via international tenders, said the tender agent. CSSC chose Fives Landis Ltd’s crankshaft grinder, IMT Intermato SpA’s CNC turn-mill center, Hexagon AB’s gantry coordinate measuring machines, and horizontal machining center from Juaristi TS Comercial SL, said Huang Pianpian from Beijing Rui Chi Fei Si Tender Co, the appointed agent representing CSSC in this case.

Those orders will be delivered within an eight to 18 months period at various Chinese ports such as Nanjing and Anqing.

CSSC is strengthening its position in China’s engine market even with the current low market demand. In July, it acquired a 30% stake in two-stroke JV Winterthur Gas & Diesel (WinGD) from its partner Wartsila Corporation; following the transaction, CSSC owns 100% of WinGD. Market research shows that in China’s medium-speed diesel engine market, Weichai Heavy Machinery and CSSC Marine Power take up a 58.9% market share. In October 2015, CSSC Marine Power renewed the contract with MAN Diesel & Turbo for another 10 years of production of four-stroke medium speed engines. In May 2016, the company’s 6S60ME low-speed diesel engine started operation. The latest designed model is the largest diesel engine constructed by CSSC Marine Power, which weighs approximately 390 tons.

 

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Longi Silicon Materials to invest USD 240m in Malaysian fabrication plant; project finance opportunities available

 

Longi (HK) Trading Limited (隆基香港贸易有限公司) plans to invest USD 240m (CNY 1.6bn) in the construction of a fabrication plant called Longi (Kuching) Sdn Bhd(古晋隆基) in Malaysia, according to Mr. Wang Hao (王皓), who is the Securities Affairs Representative at the subsidiary of Xi’an Longi Silicon Materials Corp.(西安隆基硅材料股份有限公司).

The facility, which is to be located at the Sama Jaya Free Industrial Zone in Kuching City, Sarawak State, will comprise production capacities of 1 GW of wafers, 500MW of monocrystalline silicon solar cells, 500MW of PV modules and 300MW of ingots.

The project, which is scheduled to become operational in the first quarter of 2017, is expected to generate annual revenues of USD 318m (CNY 2,12bn) from which it will yield a net profit of USD 13.4m (CNY 89.44m).

“The total project investment (TPI) is USD 240m and Longi Kuching is the main investor,” Wang told this news serice. “The source of funding comes from the parent company Longi Silicon Material as well as bank loans.”

Longi Silicon Materials has applied for debt finance from Industrial Bank Co Ltd, Xi’an branch (兴业银行西安分行) and the Industrial and Commercial Bank of China‘s  Yunfu branch (中国工商银行云浮分行). Banks in mainland China, Hong Kong and Malaysia will also be able to get involved depending on how favorable the conditions are, Wang added.

Besides the project in Malaysia, Longi Silicon Materials has invested in setting up an integrated solar plant in an Indonesian industrial zone this year, which is expected to be completed and begin operations by the end of 2016. Considering the production costs and expected profits, Southeast Asia is viewed as a deserving target for future investments, Wang observed.

Longi Silicon Materials achieved operating income of USD 968m (CNY 6.424 bn) in the first half of 2016, which represented a 282.15% increase year-over-year. In terms of profits, the company posted a net increase of 634.2% in the space of a year, reaching H1 profits of USD 130m (CNY 866m), according to the company’s latest financial report.

Opportunity of the Week: GCL-Poly Energy to build a 1200T/D waste incineration plant with USD 45m in Henan

GCL-Poly Energy Holdings Limited, the subsidiary of Golden Concord Holdings Limited (GCL Group), will build a new waste-to-energy (WTE) plant in Yongcheng city in Henan province. An estimated total project investment (TPI) of USD 45m (CNY 300m) will be required to build the 1200 tons per day (T/D) WTE plant, according to Dai, the project contact person.

Dai explained that the core employed equipment consists of three 400T/D mechanical grates, 12MW and 18MW condensing steam turbine generators as well as 12MW and 18MW electricity generators. Heat recovery steam generators (HRSG), automated control devices, and crushers will also be needed. Apart from above equipment, the WTE station will also entail environmental protection measures, including fly ash stabilization processing, flue gas treatment, and leachate treatment. He said equipment procurement will be after the environmental impact assessment (EIA), maybe later this year.

Dai said that project financing is from bank loans and company assets. Credit is being granted by five major banks in China, including Bank of China Limited, Agricultural Bank of China (ABC) (中国农业银行), China Construction Bank Corporation (中国建设银行股份有限公司), Industrial and Commercial Bank of China Limited (ICBC) (中国工商银行), and Bank of Communications Ltd (BOCOM Securities). However, he did not provide the loan amount each bank would provide.

Jiangsu Academy of Environmental Industry and Technology Corporation Ltd is undertaking the EIA. Now they are working on the first draft of the EIA report after receiving some public suggestions.

 

 

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Increased optimism on Chinese infrastructure investment

It is no secret that a period of volatility in China’s stock market this year gave many cause for concern. Since then, a growing debate about the health of the country’s economy has on occasion omitted encouraging signs of stability. In particular, critical clean power, environmental and water infrastructure projects have largely proceeded unhindered thanks to a central government stimulus effort that is beginning again to pick up steam.

Balu Balakrishnan, CEO and Director of Power Integrations, Inc recently offered an optimistic take on the promise of a renewed increase in China’s infrastructure spending after he was asked by an analyst about the government’s appetite for spending:

Evan Wang – Stifel, Nicolaus & Co., Inc. “I was wondering if you can give us some comparison against what your expectation earlier in the year that the Chinese Government might be resuming its infrastructure spending as part of the stimulus program and how is that looking now for 2016?”

Balu Balakrishnan – President, Chief Executive Officer & Director “It is actually looking very good. They have resumed investment in infrastructure.There are number of new high-voltage DC transition lines being installed in China. In addition to that, they are converting their public transportation, which is buses, into electric buses starting from Beijing and Shanghai where they have the most pollution, and we have actually a significant portion of that business that we have won on and we expect that to contribute to our growth this year and next year.”

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