OCI President Lee Woo-hyun holds a news conference to announce 

the company’s financial results for the 2nd quarter of 2014 on July 23. (photo: OCI)

OCI President Lee Woo-hyun said his company will explore more investment opportunities in the photovoltaic power generation field after securing financial stability by reducing its debt ratio by 10 percent by the end of this year. 

Lee made the remarks at a news conference to announce OCI’s financial results for the second quarter of 2014 at the Shinhan Investment Building in Yeouido, Seoul, on July 23. “OCI’s debt ratio has increased from 123 percent in 2013 to 127 percent in 2014, so for a manufacturing company, huge debts are burdensome, and cost reduction efforts and the disposing of non-core assets will be employed to secure financial stability,” he said. 

For Q2 of 2014, the company chalked up 756.9 billion won in sales, up 6 percent over the same quarter of 2013, and 34.2 billion won in operating income, a 93 percent increase over the same period last year. But Q2 sales for 2014 declined 5 percent over the previous quarter as the Korean won has appreciated and polysilicon shipments have decreased due to lower installation rates in China than expected. Constant companywide cost reduction efforts improved operating margins.

A 50 won change in the won/dollar exchange rate adversely affected 30 billion won in quarterly sales revenue and 17 billion won in quarterly gross profit.

OCI’s charming performance in photovoltaic power development in U.S. 

OCI, which has accumulated expertise in inorganic chemistry, petroleum, and coal chemistry, has grown into a global leader of polysilicon, an essential material for photovoltaic power generation. The company has been strengthening its energy project portfolio by landing mega contracts in the photovoltaic power generation and community energy sectors since 2012.

It was in July 2012 that OCI made inroads into the photovoltaic power generation sector. At that time, the company signed a deal to supply power to CPS Energy of the United States via OCI Solar Power, a U.S. subsidiary of OCI. The seven-phase deal calls for the construction of photovoltaic power plants capable of producing a combined 400MW in the San Antonio and Chicago areas over five years and supply power from the facilities to GPS for 25 years. The power production amounts to the power consumption needs of 70,000 households, accounting for 10 percent of San Antonio’s total, and the deal is expected to bring about some $2.5 billion (about 2.55 trillion won) in revenues.

The project involves the construction of the second largest photovoltaic power plant complex in the United States, which covers some 1.52 million square meters, an equivalent to 1,600 soccer stadiums of international standard size. The first phase of the project, constructing 41MW in capacity, kicked off in February 2013 and finished in December of the same year, and the second phase of the project, which was to construct 44MW was wrapped up in March this year. The third and fourth phases of the project are scheduled to be completed between late August and early September, serving as OCI’s cash cow. 

In Korea, OCI plans to build photovoltaic power plants with some 400MW in combined capacity in cooperation with local governments — a 40MW plant in Sacheon City, Gyeongsangnam-do; a 100MW plant in Seoul Metropolitan City; a 100MW plant in Busan Metropolitan City; and a 100MW plant in Jeollabuk-do. 

An OCI official said the expanded supply of new and renewable energy sources is expected to reinvigorate regional economies through job creation. 

OCI was awarded a contract to supply community energy to the Saemangeum Industrial Complex in Gunsan City in October 2011. OCI SE, a subsidiary of OCI, is now building a 303MW-class combined cycle plant to supply heating and power necessary for all heating and cooling facilities to all tenant companies and commercial and residential areas of the complex. The plant is to be fitted with the latest advanced technologies such as the nation’s first fluidized bed boiler, catalyst-type denitrification, and semi-dry process desulfurization facilities. The upcoming combined cycle power plant, to built under new environmental technology standards, is to become the subject of benchmarking from all companies in Korea. 

OCI plans to make inroads into photovoltaic power generation, community energy, and other independent power projects to make them a new growth axis, the OCI official said.