Trina Solar Limited, a global enterprise in photovoltaic ("PV") modules, solutions, and services, announced on November 29th that it has entered into an agreement (the "JV Agreement") to establish a joint venture with Yabang Investment Holding Group Co., Ltd. to acquire certain production assets from Changzhou NESL Solartech Co., Ltd., a subsidiary of Yabang Group, which specializes in the production of solar PV modules. The total investment by Trina Solar and Yabang Group is approximately US$45 million which will be used for capital expenditure and working capital. The Joint Venture aims to increase total solar module production capacity to 500 MW within the next 12 months.
The Joint Venture will acquire the existing module production assets of Changzhou NESL, including plants, machinery and equipment, which will be upgraded by utilizing the combined capital investment and international expertise provided by Trina Solar and Yabang Group. The facility will be managed by Trina Solar management, who will bring international best practices in innovation, environmental standards, quality control and technological expertise to the daily operation of the facility.
"We are delighted to enter into this Joint Venture Agreement with Yabang Group," said Mr. Jifan Gao, chairman and CEO of Trina Solar. "As we expect the demand for solar modules will continue to grow, particularly in China, Japan and emerging markets, the Joint Venture will strengthen Trina Solar's market position by delivering much needed extra module production capacity."
Mr. Gao added, "The Joint Venture will enable us to quickly and efficiently increase production capacity in a cost-effective manner. This move demonstrates Trina Solar's strategic approach to expanding capacity through acquisitions as opposed to organic growth, which we believe will help ensure the industry's existing capacity is being used productively. We are pleased to have the opportunity to collaborate with Yabang Group on this important partnership. This will not only benefit our customers by guaranteeing a supply of high quality and reliable products, but will also promote a sustainable and balanced solar industry in China."
According to the JV Agreement, the Joint Venture will be named Changzhou Trina Yabang Solar Energy Co., Ltd. Trina Solar will hold a 51 percent stake in the Joint Venture and Yabang Group will hold the remaining 49 percent. Trina Solar and Yabang Group expect to complete the establishment of their joint venture partnership by the end of 2013.