SunEdison Announces Cost Reduction Actions In Merano, Italy And St. Peters, Missouri Semiconductor Operations
SunEdison, Inc. (NYSE: SUNE) announced that it will indefinitely close its shuttered polysilicon manufacturing facility in Merano, Italy immediately. This is the conclusion of a process that began with the previously announced 2011 global restructuring plan.
The Merano polysilicon facility was shuttered in December of 2011 as part of a restructuring plan to better align the business with current and expected market conditions and improve overall cost competitiveness. For the past two years SunEdison explored various options to improve the cost effectiveness of the Merano polysilicon facility. Ultimately, the identified cost reductions were not enough to sustain the economic viability of the plant in the current market environment. The indefinite closure will affect approximately 200 employees at the Merano polysilicon plant. In connection with the closure, the associated electronic grade TCS (trichlorosilane) operation, which employs approximately 35 people, will be closed over the next 12 months. As a result of the decision to indefinitely close the polysilicon manufacturing facility and TCS operation, we expect to record approximately $37 million of fixed asset impairments for the year-ended December 31, 2013.
SunEdison will also commence a plan to consolidate its semiconductor crystal operations. The consolidation will include the transitioning of small diameter crystal activities in its St. Peters, Missouri facility to its other crystal facilities in Korea, Taiwan and Italy. The crystal manufacturing consolidation will affect approximately 100 employees in St. Peters and will be implemented over the next 12 months.
"We never take actions like these lightly. However, in light of current market conditions, this announcement is necessary to preserve our strong competitive position and strengthen our future. We will make every effort to provide the necessary assistance to our affected employees," said Shaker Sadasivam, Executive Vice President and President of Semiconductor Materials. "The decision to close the Merano polysilicon and TCS operations and to transition crystal operations is the result of our continuous efforts to improve the performance of our business through solutions that will keep these facilities economically strong."
Sadasivam also noted, "We appreciate all the support provided by the Bolzano Province and by the Italian Government in helping achieve lower power rates. We look forward to continuing to work with them during the transition to help make our Italian operations more competitive. We are focused on maintaining competitive costs across our global footprint, including Italy. This includes continuing to take strategic steps aimed at improving all aspects of our operations including cost, quality and productivity. This will enable us to enhance our business globally and to support our goal of maintaining a strong presence in Italy."
Some of the statements in this press release are "forward-looking" and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These "forward-looking" statements include statements relating to the expected timing of the closure of the TCS operation, the consolidation of the small diameter crystal manufacturing operations, the number of employees affected and the amount we will record as fixed asset impairments for the year-ended December 31, 2013. These statements involve risks and uncertainties that may cause results to differ materially from the statements set forth in this press release. The forward-looking statements in this press release speak only as of the date of this press release and are subject to uncertainty and changes. Given these circumstances, you should not place undue reliance on these forward-looking statements. SunEdison expressly disclaims any obligation or undertaking to release publicly any updates or revisions to such statements to reflect any change in its expectations with regard thereto or any changes in the events, conditions or circumstances on which any such statement is based.
SunEdison is a global leader in semiconductor and solar technology. SunEdison has been a pioneer in the design and development of silicon wafer technologies for over 50 years. With R&D and manufacturing facilities in the U.S., Europe, and Asia, SunEdison enables the next generation of high performance semiconductor devices and solar cells. SunEdison is also a developer of solar power projects and a worldwide leader in solar energy services. SunEdison's common stock is listed on the New York Stock Exchange under the symbol "SUNE."
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