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Tornado Causes Damage to Canadian Solar and GCL’s Factories in China

published: 2016-06-27 18:39

Hail and tornado hit Jiangsu province, China in the afternoon of June 23, 2016 and caused property damage and personal injuries. Canadian Solar’s Funing solar cell facility collapsed due to the tornado, while GCL’s several factories were also reported damaged.

The natural disaster occurred in Funning and Sheyang in Jiangsu at around 14:30 on June 23, killing 98 and injuring at least 800, according to Jiangsu Civil Affairs Bureau. Canadian Solar is the major manufacturer victim of the tornado as its 500MW PERC PV cell factory collapsed when the tornado occurred.

The PV cell factory has been shut down after the rescue was completed by the mid-night on June 23. Canadian Solar carries both casualty and property insurance for its facilities, inventory, business interruption insurance, as well as health and medical insurance for all its employees, and is reviewing the extent and scope of this coverage with its insurance carriers. Currently, the company is assessing the extend of the damage.

Canadian Solar owns 80% of interests in the Funing cell factory and operates it, while GCL owns the other 20%. The 500MW Funing factory was online in May 2016, and Canadian Solar anticipated that the cell producing would reach 267MW in the third quarter of 2016, representing 15~20% of its solar cell requirements for the quarter.

“We have immediately dispatched our internal emergence response team from our other facilities in China to help our employees in Funing and people in the local communities,” said Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar. “We are assessing the situation but do not expect it to have a material impact on our business.”

Meanwhile, GCL, a local-based PV giant focusing on manufacturing polysilicon and wafers, reported several property damage for its factories in Jiangsu. Fortunately, most of the damages were reported as glass breaks. GCL’s chairman, Zhu Gongshan, has donated RMB10 million and necessary aids to Funning County on behave of GCL Group for rescuing and relieving.

EnergyTrend believes that the damages will only have limited impact on Canadian Solar’s PV cell supply as well as the company’s business in the short-term because the production capacity was not completely utilized. On the other hand, GCL’s multi-si wafer supply in July could be slightly reduced. However, the estimated 5% supply reduction will not severely influence on the PV market because most of PV cell manufacturers plan to decrease their utilization rates in July in response to a weak market outlook.

Canadian Solar guarantees its solar cell supply and PV module shipment in a statement following the occurrence of the natural disaster. The company plans to cover its solar cell needs by increasing the output from its Suzhou solar cell factory, ramping up production at its new cell factory in Thailand and by purchasing additional solar cells from its long term third-party suppliers, who have agreed to supply the additional solar cells.

(Photo: collapsed factory belongs to Canadian Solar in Funning. Source: Jiangsu Fire Agency’s Weibo account)

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