Analyst doubts future of REC's business in Norway - report

Sep 26, 2011 - The domestic production of Norwegian solar group Renewable Energy Corp (OSL:REC) is doomed, but there are grounds for optimism for its international business, an analyst told Norwegian business daily Dagens Naeringsliv (DN) Sunday.

Competition from low-price rivals and overcapacity have pushed down the prices of the company's products, including solar panels and wafers.

REC's Norwegian factories in Glomfjord, Narvik and Heroya have been bringing heavy losses although 600 employees have been laid off.

The lay-offs could become permanent, the analyst, who was not named, said, also questioning the future of the factories. A closure will imply costs of NOK 600 million (USD 102.4m/EUR 76m), according to him.

Earlier in September, a customer cancelled a wafer contract, paying out USD 40 million (EUR 29.7m). The analyst told the daily the same is likely to happen with the remaining wafer contracts.

However, REC is a cost-leader in polysilicon and the future of its factories in the USA and Singapore is seen as positive.

By 1358 CET today, shares in REC had lost 2.49% to NOK 6.260 on the Oslo Stock Exchange (OSE).

(NOK 1.0 = USD 0.171/EUR 0.127)
(USD 1.0 = EUR 0.742)

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