The development is an outcome of the trade dispute between the United States and China. Incidentally, REC Silicon’s Montana plant will not be affected by this lay off.
On Monday, Norway’s REC Silicon stated it would slash its workforce by 40% at one of its two plants in the United States citing ongoing U.S.-China trade disputes. REC Silicon is a supplier of silicon materials to the solar industry.
As a result of the trade war over solar panels, REC Silicon has not been able to sell its good in China since 2014.
With the news reaching the market, REC Silicon’s shares were down by 8% at 0705 GMT having fallen 65% over the last 5 years.
While China has imposed tariffs on U.S. polysilicon, a key element in the manufacturing of solar panels, which incidentally REC Silicon produces, the U.S. has slapped tariffs on Chinese solar panels imports to the U.S.
Oslo-listed REC Silicon will lay off nearly 100 employees from its Moses plant in Oregon and slash production to around 25% of the plant’s capacity.
REC Silicon Montana plant will not be affected by this lay off.
“It is really sad. We can’t access the market. We don’t want subsidies. We just want fair access,” said Tore Torvund, REC Silicon’s CEO. “We make a strong demand to present (U.S.) administration to find a solution so that we can continue to operate out of the U.S.”.
Significantly, REC Silicon stated it expects to report additional impairments at the time of publishing of its second-quarter results on July 19. Its expects its second-quarter revenues to touch $58 million and said it has $42 million in cash.
“Current market conditions will negatively impact the company’s profitability and credit risk exposure,” said Torvund.
REC Silicon did not quantify the impairments.