China’s Longi plans to set up more manufacturing plants overseas

Longi Green Tech, the world’s biggest monocrystalline silicon solar maker, is looking to set up more manufacturing plants overseas, aiming to seize a bigger market share and avoid hefty U.S. import tariffs.

The Xi’an-headquartered Longji Green Technology Co has two offshore plants in Malaysia and Vietnam, accounting for about 1% of its total wafer capacity and 20% of its cell and module products capacity.

“Recently we are actively studying to build manufacturing plants in other regions with advantageous production factors, such as India, Saudi Arabia and the U.S.,” Li Zhenguo, President of Longi Green Tech, told an online media roundtable on Thursday.

Longi has 85 GW of monocrystaline silicon wafer production capacity and 50 GW of solar module production capacity.

The firm will strive to maintain its global market share in monocrystalline silicon wafer at 45% and to bring the share in solar module to more than 30%, Li said, without disclosing a timeframe. Longi supplied about 19% of solar modules worldwide in 2020.

The U.S. market was about 15% of Longi’s total solar products sales in the first half of 2021, compared with 11% in 2020, despite the persistent trade dispute between Beijing and Washington.

“Chinese solar products are imposed by about 150% import tariffs by the U.S. It’s almost impossible for China-made products to be sold there,” said Li, adding that Longi’s Malaysia and Vietnam factories are mainly targeting the U.S. market.

The U.S. government in June also banned imports from five Chinese solar firms accused of using forced labour in Xinjiang.

Li said moving solar manufacturing capacity overseas is a “right thing” in light of China’s climate change pledges.

“Carbon neutrality is not only a Chinese business, but a global issue… It is unfair to leave all energy consumption pressures on China while shipping Chinese solar products worldwide,” Li said.

China, who has vowed to bring its carbon emissions to a peak by 2030 and reach carbon neutrality by 2060, accounts for nearly 80% of solar wafer and module capacity in the world. Reuters