Silex Systems has abandoned plans to revive its solar panel manufacturing plant in Sydney’s Olymic Park, and has announced its immediate closure and decommissioning.
Silex bought the then mothballed plant from BP Solar for $6.5 million in 2009, but ceased production of solar cells in August last year as part of a restructuring. It then mothballed the module manufacturing again in November, but after resuming limited production in February, it has now decided to cut its losses after trading conditions failed to improve.
CEO Michael Goldsworthy blamed the “triple whammy” of cheap Chinese modules flooding the market, the high Australian dollar, and inadequate government support.
“While significant progress has been made towards restructuring the SilexSolar business, to the point where the business has been operating on a cash flow neutral basis for the last few months, the continuation of challenging market conditions has frustrated attempts to secure a profitable market niche and has thus necessitated the full closure of our manufacturing plant,” he said.
The closure will result in a one-off negative cash impact of $4.8 million from the cost of settling leases, decommissioning and redundancy costs, and a balance sheet write down of $5.2 Million.
Goldsworthy said SilexSolar will continue to progress some commercial-scale project work already underway, and will also continue to support existing installed product warranties, but he sounded downbeat about the future of that part of the business.
“It’s still a price driven business, it’s pretty difficult to compete,” he told RenewEconomy. He noted the US anti-dumping action against Chinese manufacturers and said the same thing should happen here.
Goldsworthy told RenewEconomy in February that the company was working on numerous opportunities, including a possible bid into the ACT Government’s large scale solar auction. He would not comment on the result of that bid, although it is thought Silex did not make the shortlist of bidders.
Around 100 people may have lost their jobs all told. The August closure resulted in the loss of about 30 manufacturing jobs, while suspension of the panel manufacturing caused another 45 workers to be retrenched. Around 20 people remained employees of SilexSolar.