Expectations Rise for OCI Holdings' New U.S. Cell Plant
Returns to Profitability Quarter-on-Quarter... Operating Margin at 5.1%
Down 55.6% Compared to KRW 99 Billion in the Same Period Last Year
Lee Woohyun, Chairman of OCI Holdings, stated, "We are carefully considering the expansion of the wafer value chain through strategic collaborations with multiple global partners." He mentioned that joint ventures are being discussed as a possible form of strategic collaboration. OCI Holdings also announced its plan to begin full-scale operation of its solar cell production plant in the United States in the first half of next year.
During the first-quarter earnings announcement on April 24, Chairman Lee said, "There is a significant shortage of cell production and supply in the United States," and added, "The provision of additional tax credits for projects using locally sourced components will present new opportunities for us." Last month, OCI Holdings announced its plan to establish an independent solar cell production plant in Texas, United States.
Thanks to increased demand for solar cells in the United States, OCI Holdings returned to profitability quarter-on-quarter within just one quarter. On a consolidated basis, first-quarter sales this year reached KRW 946.5 billion, up 10.8% from the previous quarter. Operating profit reached KRW 48.7 billion, marking a turnaround from an operating loss of KRW 107.8 billion in the previous quarter. This improvement in operating profit was driven by key subsidiaries turning profitable, including OCI Terrasus, which produces polysilicon for solar power in Malaysia; OCI Enterprises, a U.S.-based solar holding company; and DCRE, an urban development subsidiary.
OCI Terrasus saw a slight increase in sales compared to the fourth quarter of last year, as sales grew not only to existing long-term contract customers but also in Southeast Asian countries such as Indonesia and Laos. For the second quarter, the company is considering adjusting the operation of some production lines, anticipating that changes in the global trade environment may lead to a decrease in order volumes from customers.
OCI Energy, a subsidiary of OCI Enterprises, recorded increases in both sales and operating profit after completing the sale of its 260MW 'Sun Roper' solar power plant project rights. OCI Energy also announced that it is negotiating with clients to sell a total of 220MW in projects, including 'Lucky 7' (100MW) and 'Pepper' (120MW), in the first half of this year.
To address the uncertainty of U.S. tariff policies, OCI Holdings announced a short-term strategy to secure new customers and manage inventory in low-tariff countries such as Africa and the Middle East. For the mid- to long-term, the company aims to build a total of 2GW capacity at its Texas cell plant by next year, based on OCI Terrasus's polysilicon. OCI Holdings plans to invest a total of $265 million (approximately KRW 380 billion) to start producing 1GW of cells in the first half of next year, and then gradually add another 1GW in the second half, securing a total production capacity of over 2GW.
Prior to building the new cell plant in the United States, OCI Holdings has also been working to secure talent in the solar sector, including a donation of $250,000 (about KRW 350 million) in scholarships to the University of Texas at San Antonio (UTSA) in December last year.
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