China’s troubled solar industry gets hope

China’s troubled solar industry gets hope

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The solar devices industry was once a lucrative business in China, but in recent times business has slowed. However, there are still hopes of recovery due to supportive government initiatives.

The government support initiatives might lead to possibilities of new business partnerships as well. LDK Solar, which is based on Central China’s Jiangxi province, is one of the world’s largest producers of solar wafers. The net losses of the company had doubled in the second quarter of 2012 and it had a debt ratio of 93 percent in the first half.

Due to this, the company had decided to sell 19.9 percent of its shares to a state backed company. The new deal will help in generating $23 million on an immediate basis and will also help to deal with tight cash flow. In recent times, the Chinese market has been filled with speculations regarding solar companies possible future moves, including Suntech Power, Dongying and Shandong based CNPV.

The China Photovoltaic Industry Alliance, which is a trade group, said that after a wave of investment many Chinese photo-voltaic manufacturers idled production in the second half of 2011 due to severe overcapacity.