Evergreen Solar (ESLR/ESLRD) Shutting Down US Manufacturing Operations; Provides Guidance

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10:37:20 pm on January 11, 2011

Evergreen Solar (ESLRD/ESLR) has announced plans to shut down it US solar manufacturing operations in Devens, MA in order to compete with China based manufacturers.  The company is in the process of moving its manufacturing to China and announced it had begun production there back in September.   The company was bleeding cash and with an uncertain solar market next year, it really had no choice. 

Unfortunately, competing globally as a manufacturer in the US these days is incredibly difficult.  The shut down will take place before March 31st and the company expects a total charge of $355 million ($340 non cash, $15  cash) related to the closure which will impact both Q4 2010 and Q1 2011 results.  Around 800 employees will be affected by the closure.  It should be noted that the company will continue its high temperature filament plant in Michigan.

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CEO Michael El-Hillow commented:  “While overall demand for solar may increase, we expect that significant capacity expansions in low cost manufacturing regions combined with potential adverse changes in government subsidies in several markets in Europe will likely result in continuing pressure on selling prices throughout 2011. Solar manufacturers in China have received considerable government and financial support and, together with their low manufacturing costs, have become price leaders within the industry. While the United States and other western industrial economies are beneficiaries of rapidly declining installation costs of solar energy, we expect the United States will continue to be at a disadvantage from a manufacturing standpoint.”

In addition to the closure announcement the company is providing Q4 guidance indicating shipments increased to around 47MW which is a new company record at an ASP of $1.90/watt.

The company also commented on its wafer technology and indicated it has begun discussions in China to expand its wafer manufacturing operations there. 

Shares of ESLR (currently trading as ESLRD) were down about 4% in after hours trading. 

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