(Yicai Global) Feb. 15 -- Shares of Hoshine Silicon Industry, one of the world’s leading industrial silicon producers, surged after the Chinese firm set out plans to invest CNY17.5 billion (USD2.75 billion) in the construction of a plant for high-purity polycrystalline silicon, an upstream raw material used for solar cells.

After surging as much as 9.3 percent earlier today, Hoshine Silicon [SHA:603260] ended 7.9 percent higher at CNY114.32 (USD18). But the stock is still down more than 13 percent this year.

Located in the northwestern Chinese city of Urumqi, the project is scheduled to start construction in May and will be up and running in three years, the Cixi, Zhejiang province-based company said in a statement late yesterday.

The project, with a designed annual output of 200,000 tons of high-purity polycrystalline silicon and a targeted annual capacity of 100,000 tons of byproduct caustic soda, will be carried out by its wholly-owned unit in the Xinjiang Uygur Autonomous Region, of which Urumqi is the capital, Hoshine Silicon said.

The project will help expand and improve Hoshine Silicon’s industrial chain, lay the foundation for the rapid development of its downstream solar energy business, and create a new profit growth point, the firm said.

Hoshine Silicon has a total annual production capacity of 800,000 tons of industrial silicon, according to its website. Polycrystalline silicon, refined from industrial silicon of lower purity, is an upstream raw material used in solar cells.

Benefiting from surging prices, Hoshine Silicon expects 2021’s net profit to be between CNY8.5 billion to CNY8.7 billion, an annual increase of 505 percent to 520 percent, it said early last month.

Editor: Peter Thomas