Wacker watching market

Wacker watching market

November 20th, 2009 by Randall Higgins in News

CLEVELAND, Tenn. - An online newsletter that follows energy financial issues says Wacker Chemical is holding back on startup of its $1 billion Bradley County polycrystalline silicon factory.

The company is watching worldwide market demand, according to a story in New Energy Finance, but local and state officials say they're comfortable with the pace of the project.

Wacker reported a 12.4 percent year-on-year increase in third-quarter polysilicon sales, according to New Energy Finance, "but now wants to see a sustained demand increase before pressing the go button on the Tennessee project."

The story quoted an unnamed Wacker spokesman as saying, "No final decision has been made yet, it will depend on market development."

But Gary Farlow, Cleveland/Bradley County Chamber of Commerce president, said Thursday that, after spending a week with Wacker officials at their American offices, he is confident of the German company's plans here.

"What gets everybody nervous is when the term 'market conditions' is mentioned," Mr. Farlow said.

Wacker is on track for a groundbreaking in Bradley late next year for the plant, which is expected to bring about 500 jobs to the area, he said.

"They budget their projects in phases," Mr. Farlow said, "not everything at the same time."

Jenny Chase, senior solar analyst for the United Kingdom-based Internet newsletter, said there is "enormous overcapacity" in the silicon market.

She said the spot market price for polysilicon is $60 per kilogram today versus $400 per kilogram a year ago. All five of the world's major producers have expanded production, she said, with Wacker adding 20,000 tons per year in Germany.

But long-term market prospects are extremely good, she said.

"We are expecting very strong growth from solar energy," she said. "Longterm, Wacker is a low-cost provider with really good technology and really big plans."

Gov. Phil Bredesen and Tennessee Department of Economic and Community Development Commissioner Matt Kisber are "very comfortable with the progress being made on the project and confident of its continued progress," a spokesman for the development said Thursday in an e-mailed statement.

Spokesman Mark Drury said that Wacker President and CEO Dr. Rudolph Staudigl briefed Gov. Bredesen and Mr. Kisber on the situation this week. State officials also visited Wacker's U.S. facilities in Adrian, Mich., "to discuss next steps relative to agreements between Wacker and the state of Tennessee," he said.

"Engineering and design work on the Bradley County facility is under way and as new Wacker facilities in Europe come online, the company will be shifting additional personnel to the Tennessee project," Mr. Drury said. "Gov. Bredesen and Commissioner Kisber are both very optimistic we'll be seeing work on the site in the coming year."

Mr. Farlow said Wacker is just now getting its internal planning team focused on Tennessee after working on its German expansions.

"So they are pretty much on their original schedule," he said.

Both the Cleveland City Council and the Bradley County Commission recently endorsed resolutions of support for Wacker as a step towards acquiring some federal grants for the project here.

Staff Writer Judy Walton contributed to this report.