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REC Annual Report 2011
9
We have continued to improve the operational performance
in REC Silicon, reaching an impressive cash cost for our
Fluidized Bed Reactor (FBR) polysilicon of below 14 USD/kg. This
industry leading cost position provides us with a solid platform for
further growth. Further improved stability of the production processes
in REC Silicon can still be achieved. The FBR process in particular is
still relatively new, and through continued work with the
REC Business System (RBS) we will realize the full potential of this
technology. Our customers continue to give us positive feedback on
the FBRmaterial, as we are significantly increasing the external sales
of polysilicon.
Operations in Singapore are also running very well and we reached the
cost targets set out for year-end 2011 already in June. We have seen our
cost position improve relative to our peers, and I am convinced that we
will continue to improve at a high rate over the next few years. We are
nowworking on a number of initiatives to improve cell efficiency and
expand production capacity within the existing facility.
We have also had some great technology achievements during 2011,
and the most recent developments, especially in ‘Monocast’ wafer
process and improved solar cell design, give reason for being optimistic
going forward. It is these technology advances and the improved product
performance that will allow REC to differentiate from its competitors
and make our products the preferred choice.
The REC solar module was announced the best performer in the
independent Photon Field Performance Test. The test monitors the
energy yield of solar modules from leading manufacturers over a
12month period from January to December 2011. Additionally in
September, our FBR technology was recognized when REC was awarded
the 2011 Solar Industry Award for new innovative production of
granular polysilicon.
REC’s products are generating clean energy for the future. Sustainability
is therefore an integrated part of our business model. Through a
combination of our proprietary FBR technology and efficient use of
clean energy in our production, REC has achieved an industry leading
energy payback time of one year and a light carbon footprint for our
solar modules. In the short term, we continue to improve the operational
and environmental performance of our operations. In the longer term,
investing in additional FBR production capacity will help the industry
further lower its carbon footprint.
During 2011we increased our solar module sales with 40 percent and
further strengthened our relationships with existing and newpartners
in Europe, Asia andUSA. Over the recent years we haveworked hard to
achieveworld-class performance in our operations by implementing RBS.
Inspired by the very good results in operations this approach has nowbeen
extended to sourcing, support functions and sales andmarketing.
By applying the RBSmethodology, we seek to better understand the value
our products and services create for our customers. Furthermore, wewill
continue to develop our selling processes to better match the buying
processes of our customers. By this we seek to differentiate ourselves
and create customer preference for REC. An important building block in
these efforts is our partner program for our key solar module customers.
Despite progress in a number of areas, we unfortunately had tomake the
decisions to close down our cell plant in Narvik and half of our wafer
capacity in Norway in 2011. In addition, onMarch 20, 2012, we decided
to permanently close down the 300MWmonocrystallinewafer plant in
Glomfjord. Our organization at these plants demonstrated operational
improvements and cost reductions that were impressive, but this was
unfortunately not sufficient in such a challengingmarket environment.
My gratitude goes to all employees who had to leave their positions, and
I would like to thank our employee representatives for an open and
constructive dialogue during these difficult times.
I amconvinced that continued cost reductions will lead to growth in
demand for solar energy, and that over the next years, wewill see
restructuring and consolidation of a still immature and quite fragmented
industry. REC is well positionedwith strong support fromall its
stakeholders.With a clear focus on improving our operational
performance and strengthening our market position, I believe REC
will remain a leading player in the solar industry.
Ole Enger
CEO& President REC