China's giant polysilicon companies set up an acquisition firm to combat oversupply

Local media reported that Chinese polysilicon manufacturers have established an acquisition?company in order to help restructure a sector plagued by an oversupply. However, it is unclear whether the firm has any concrete plans to purchase and shut down excess capacity.

According to the business registration platform Qichacha, Beijing Guanghe Qiancheng Technology was registered on December 9, with assets of 3 billion yuan (424.7 million dollars) and 10 shareholders.

Tongwei's securities department told 21st Century Herald the newly formed company was for industry firms to "explore strategic cooperation opportunities such as market expansion and production capacity optimization."

Tongwei Solar Technology (Emeishan), a subsidiary of Tongwei, owns 30.35 percent of Guanghe Qiancheng. Tongwei's largest polysilicon producer in China, Tongwei, declined to comment. The other shareholders have not responded to requests for comments.

Polysilicon, a building block of solar panels, is essential.

Beijing is trying to limit excess solar production capacity as part of an anti-involution campaign, which aims to rein in the fierce competition in all industries.

GCL Technology, the second largest shareholder in the industry, had stated that an OPEC style grouping was being discussed to buy and?shut down at least one million metric tons (or 1.1 million metric tons) of lower quality polysilicon.

Analysts warn that any plan to close capacity could struggle to find funding and face opposition from local governments.

Other shareholders included listed companies Xinte Energy and CSG Holding as well as private firms Shanghai Oriental Hope New Energy owned by Hongshi Holding Group, Asia Silicon Qinghai, a subsidiary Astronergy and an entity controlled the China Photovoltaic Industry Association.

(source: Reuters)