Monday March 11, 2013
Tek Seng sees 40% of revenue from solar cell unit
By DAVID TAN
GEORGE TOWN: Tek Seng Holdings Bhd expects its solar cell business under subsidiary, TS Solartech, to generate over 40% of group revenue for 2013.
Group executive chairman Loh Kok Beng (pic) said the group was now securing orders from local and overseas solar panel manufacturers.
Tek Seng produces crystalline solar cells using German solar technology at its RM120mil plant in the Penang Science Park in Bukit Minyak, which commenced production in January 2013.
The group has allocated another RM480mil over the next five years to upgrade the plant and expand production.
“Local solar panel manufacturers, and there are only a handful of them in the country, save on logistics costs when they buy from us. Overseas, we are competing with China-made solar cells for the Japanese and US markets,” he told StarBiz.
A four-watt solar cell piece is currently sold at US$2 (RM6.21), down from around US$2.50 to US$3.00 two years ago, as the pricing of key raw materials such as silicon wafer has dropped.
Normally, a solar panel uses around 54 to 70 pieces of solar cells.
Loh said the group was currently producing 26,000 pieces of solar cells per day, using one production line and running on one shift.
“We plan to increase the production lines to eight by 2015, with an installed production capacity of 640MW.
“We are targeting about 50% of our solar cell products for the export market and the remainder for the domestic market,” he added.
Using German solar manufacturing equipment, Loh said the group's solar cells were able to convert 17.5% of the sunlight received into energy.
On its polyvinyl chloride (PVC) flooring product business, Loh said the group expected sales for the first quarter of 2013 to increase by a single digit over the previous corresponding period.
“The whole of 2013 is expected to be better than 2012,” he noted.
Loh added that the group would invest around US$1.25mil before mid-2013 to produce higher-end PVC flooring products.
“We are expecting more orders to come in over the next few months, as our customers are worried that PVC resin prices would go up some more.
“We expect to see more orders from Indonesia, South Africa, the Middle East and South America.
“The production per month for 2013 is around 5,000 tonnes, maintaining more or less the same monthly volume of 2012,” he said.
PVC resin prices have increased to around US$1,100 per tonne, compared with US$900 per tonne before.
For the fiscal year ended Dec 31, 2012 (FY12, the group registered a pre-tax profit of RM9.6mil on revenue of RM189.7mil, compared with RM10mil and RM182mil respectively in FY11.
“The pre-tax profit declined slightly due to higher production costs,” he said.