Saturday, September 15, 2007

China's Fast Growing Companies-LDK Solar (we resume our regularly scheduled programming)

From Time/CNN:

Revenue FY2006: $105.4 MILLION
Profit FY2006: $30.2 MILLION
Average Annual Rev. Growth: N/A

It may be true that being in the right place at the right time never hurt anybody, but as Peng Xiaofeng, the chairman and CEO of LDK Solar, might tell you, guessing correctly where the right place will be — and when — is even better. Four years ago, Peng was traveling in Europe, pondering his next career move, having after a decade left a profitable company that he had founded and run, a Suzhou-based maker of work uniforms. He had been struck, he says now, by how much he had heard and read about renewable energy as oil prices surged globally and environmental concerns — in particular, the emission of CO2 gases — mounted. Neither issue was going away anytime soon, Peng figured. Renewable energy had a big future....MORE

With Supplies Short, Chinese Solar Firm To Manufacture Own Silicon

When solar energy companies met in Milan two weeks ago for the industry's annual European conference, the mood was upbeat. Demand is rising, governments are supportive and a passel of new issues are doing well on the U.S. stock market. But solar panel makers have one running complaint: There's never enough silicon.

Indeed, the boom in solar energy combined with the growing tech sector has doubled the average contract price of polysilicon since 2004 and pushed spot prices up more than 30% this year alone. It's not surprising, then, that LDK Solar LDK has decided to go into the polysilicon production business.

Currently, LDK makes the silicon wafers that go into the solar cells, which in turn go into the panels that you would install on your roof. That alone makes it different from most other solar players on the public market, which either focus on the the cell stage or cover multiple stages.

But LDK broke new ground in more ways than one when it launched construction of its polysilicon production plant in Xinyu, China, on Aug. 18. Despite the voracious demand, there aren't many other companies doing the same.

"It costs $1.2 billion to get into the polysilicon business," said Chief Financial Officer Jack Lai. "You need 13,000 acres of land, you need the technology, you need to buy enough equipment (and) you need a big power plant."

LDK is well on its way to meeting these. The plant's property lies near an enormous steel mill that already has a major power plant that LDK plans to use. In the past few weeks, it has signed deals with CDI (NYSE:CDI) CDI and Fluor FLR to help design and build the facility.

Things are going so well, in fact, that LDK expects to start production at 6,000 metric tons in the third quarter of 2008, rising to 15,000 tons in 2009.

Not all analysts believe this, however....

From IBD via CNN