|OCI Materials, a subsidiary of OCI Group, hosts an event to celebrate the opening of its Chinese plant producing nitrogen trifluoride in Jiangsu province in 2012. (OCI Materials)|
OCI’s main source of business comes from manufacturing polysilicon, which is a key component of solar panel construction. OCI is the No. 1 maker of polysilicon in Korea.
In a regulatory filing, however, OCI declined the speculation that it is reviewing the sale of OCI Materials, the world’s biggest supplier of the special gas nitrogen trifluoride.
“OCI Materials is not a core business unit, but still generates abundant cash. The apparent reason for a possible OCI’s asset disposal plan is to raise funds for facility expansion in the firm’s core business,” said Lee Nam-young, a stock analyst at Samsung Securities.
During an investor relations session held in Seoul last Tuesday, OCI’s chief executive Lee Woo-hyun said that as the global solar power market is showing signs of a rebound, the company will expand polysilicon production capacity and spur more solar power generation businesses this year.
This was a change from previous policies since OCI had halted facility investments by 2011.
OCI now hopes to add 10,000 tons to its polysilicon production capacity to eventually secure an annual 50,000-ton production capacity, analysts said.
OCI, hit by a protracted slump in the global solar energy market, had been struggling to secure more capital to finance facility investment.
In 2013, the solar power solution provider posted a 100 billion won ($93 million) operating deficit, while its debt ratio rose to 122 percent last year from 102 percent in 2012.
“It is critical for OCI to succeed with the sale of OCI Materials to secure about 700 billion won funds for planned facility investments and expansion of new businesses,” said Park Yeon-joo, a stock analyst at KDB Daewoo Securities.
By Seo Jee-yeon (firstname.lastname@example.org)