Bloomberg News

JinkoSolar Works to Reopen Solar Plant as Authorities Detain 31

September 20, 2011

Sept. 21 (Bloomberg) -- JinkoSolar Holding Co. said it’s working to resume production at a solar cell plant in eastern China as local authorities detained villagers for taking part in the violent protests over pollution that shut the factory.

“We’ve blocked the polluted river and are cleaning up the water,” Chief Financial Officer Zhang Longgen said in a phone interview yesterday. “We are still investigating the incident and expect to complete it soon.”

JinkoSolar fell the most since its listing in New York on Sept. 19 after hundreds gathered at its plant in the city of Haining from Sept. 15 to Sept. 17, accusing it of being the source of pollution that killed fish in a nearby river. Local authorities have detained 31 people suspected of taking part in the protests at the plant that damaged eight cars and four police vehicles, the official Xinhua News Agency reported yesterday, citing Haining Vice Mayor Shen Xianghong.

“JinkoSolar is cooperating with local environmental authorities to assess the reasons for the pollution,” Zhang said. He declined to comment on a Sept. 19 report by the China Business News that the environmental protection bureau fined the Haining plant 470,000 yuan ($73,600).

The manufacturer of solar cells and modules said Sept. 19 that waste containing fluoride was swept from the plant into the river after heavy rains. JinkoSolar is reworking its systems to keep rainwater from flowing into the river and aims to “revive production at its Haining plant soon,” Zhang said. He didn’t disclose the costs of the changes or the cleanup.

Stock Declines

JinkoSolar’s American depositary receipts fell 9.4 percent yesterday in New York Stock Exchange composite trading after a decline of 28.1 percent on Sept. 19. Its stock has dropped more than 70 percent this year.

The solar industry had already been suffering from slimming margins and slowing demand for panels as European nations rein in subsidies for renewable energy. SMA Solar Technology AG, the biggest supplier of devices that convert power from solar cells for use on national electric grids, cut its profit forecast, citing weaker-than-expected demand for rooftop systems.

“It’s more of the same, unfortunately, with many of these companies seeing shipments growth with no margin,” said Aaron Chew, analyst at Maxim Group in New York. “I think these stocks don’t really go anywhere until next year.”

Goldman Sachs Group Inc. revised its global forecast for solar shipments, according to a research note published Sept. 19. The company now expects total shipments of 12,804 megawatts of panels in the second half of the year, 18 percent lower than its previous estimate. It downgraded JinkoSolar to “neutral” from “buy” with a 12-month price target of $13.

Violent Protests

More than 500 villagers near Haining in eastern Zhejiang province overturned eight vehicles and damaged four police cars in protests at JinkoSolar’s factory, according to footage from a local television report posted on the website of the city’s government.

An initial investigation by local regulators found that the pollution may have been caused by improper storage of waste containing fluoride. The facility had the capacity to produce 1,100 megawatts of solar cells a year as of June 30.

--Feifei Shen, with assistance from Ehren Goossens and Christopher Martin in New York. Editors: Reed Landberg, John Liu

To contact Bloomberg News staff for this story: Feifei Shen in Beijing at fshen11@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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