Solar photovoltaic ("PV") module manufacturer Trina Solar Ltd.TSL announced the commencement of operations at its new manufacturing facility in Thailand as well as the signing of a financing facilities agreement for a total of approximately $143 million.
Located in Rayong, Thailand, this manufacturing facility has an annualized module production capacity of 500 megawatts ("MW"), which can be increased to over 600 MW, depending on worldwide demand. For manufacturing cells, the annualized production capacity is 700 MW.
The facility began operations using the company's state-of-the-art high-efficiency assembly line method - Honey. So far, it has accomplished each target as per schedule, such as foraying into production and serving its overseas markets, which is estimated to occur by March end.
Apart from this, Trina Solar has also signed a loan agreement of $100 million with The Siam Commercial Bank Public Company Limited ("SCB"), one of the top three domestic banks in Thailand, and China Minsheng Banking Corporation Ltd. ("CMBC"), which is slated to mature in Jun 2020. These funds will be used as capital expenditure for the new production facility. Additionally, Trina Solar has received approval for a line of credit by SCB for about $43 million to be used as working capital.
Notably, this $100 million syndicated loan marked the beginning of cooperation between CMBC, SCB and the world's largest solar module manufacturer.
According to SCB, this agreement will help improve Thailand's economy and create job opportunities apart from supporting the Thai government's policy and the bank's strategy of promoting clean energy.
Trina Solar believes that investing in Thailand is in line with its strategy of prudent capacity expansion in certain overseas markets to deliver industry leading products to U.S. and European customers specifically. This, in turn, is expected to boost the company's profitability significantly.
Zacks Rank & Key Picks
Trina Solar presently has a Zacks Rank #2 (Buy). Some other favorably placed stocks in the solar space include SunPower Corporation SPWR , JinkoSolar Holding Co., Ltd. JKS and ReneSola Ltd. SOL , each sporting a Zacks Rank #1 (Strong Buy).