(Yicai Global) April 21 -- Hoshine Silicon Industry will spend CNY42.6 billion (USD6.2 billion) to extend its reach down the solar industrial chain and enter the high-purity polycrystalline silicon, photovoltaic glass and solar panel sectors as China’s largest industrial silicon producer looks for new sources of revenue.

Hoshine plans to build three factories, one for high-purity polycrystalline silicon, which is a refined version of industrial silicon and a raw material used in solar cells, one that makes ultra-thin PV glass and another that produces solar panels as well as silicon rods, silicon wafers, batteries and battery components, the company said yesterday.

Some CNY17.6 billion (USD2.5 billion) will go towards the polycrystalline silicon plant which will be located in Shanshan, northwestern Xinjiang Uyghur Autonomous Region and will have an annual output of 200,000 tons, it said. The facility should be ready two years after construction begins.

It will also spend CNY4.5 billion (USD653.3 million) on the PV glass factory that will have an annual capacity of 1.5 million tons and will be located in Urumchi, capital of Xinjiang, it said. This will also take two years to be completed.

While another CNY20.5 billion will be spent on the solar panel, wafer and battery facility that will produce 20 gigawatts of each product a year, it added. The plant will take three and a half years to be finished.

This is the first time that Hoshine is entering the PV materials and equipment manufacturing industries on such a large scale. The investment will help the Ningbo, eastern Zhejiang province-based firm expand its footprint along the entire industrial chain of silicon-based materials and create new profit growth points, it said.

The company will be keen to diversify as the soaring price of raw materials and the sliding price of silicon have badly affected its bottom line. Hoshine’s net profit halved in the first quarter from the same period last year to CNY1 billion (USD145 million), while revenue tumbled 10.3 percent to CNY5.7 billion (USD827.5 million), according to its first quarter earnings report released yesterday.

And last year, net profit slumped 37.3 percent from a year earlier to CNY5.1 billion, while revenue gained 10.6 percent to CNY23.7 billion (USD3.4 billion), according to its annual report also released yesterday.

Hoshine’s share price [SHA:603260] was trading down 1.1 percent at CNY79.41 (USD11.50) as of 1.15 p.m China time today.

Editor: Kim Taylor