Taipei, July 9 (CNA) United Renewable Energy Co. (UREC), the largest solar energy company in Taiwan, said Tuesday that it will cut its workforce by 10 percent-20 percent by the end of this year, particularly because of losses incurred by solar cell operations.
UREC was created through a merger of Neo Solar Power Corp., Gintech Energy Corp. and Solartech Energy Corp. in October 2018 as part of the government's efforts to develop renewable energy, and is currently capitalized at about NT$25.15 billion (US$806 million).
The merger had previously been aimed at boosting the combined company's competitiveness by boosting production capacity, but the new manufacturer remained in the red, which forced management to streamline operations and shed losses through a reduction of employees, UREC said.
According to its annual report, UREC had a workforce of about 2,840 as of Feb. 28.
In the first quarter of this year, UREC posted NT$0.26 in loss per share after NT$1.53 in earnings per share in the fourth quarter of last year, when the company took advantage of its financial management to offset the impact resulting from the weakness of its solar cell operations.
Despite the earnings in the fourth quarter, the company still incurred NT$0.34 in loss per share.
In a statement posted on the Taiwan Stock Exchange, where UREC shares are traded, the company said it has been speeding up its pace of restructuring and in order to get the business transformation done, it is necessary to cut redundancy in its solar cell operations through business consolidation.
With the cut in solar cell production, UREC said, the company will expand production in back-end solar cell modules and solar energy generation systems.
According to UREC, the current solar production capacity ranges between 2.5 gigawatts and 3GW. Local news media have reported that the company is likely to cut capacity to 1-1.5GW.
The reports said UREC is likely to lease out its plants in Linkou, New Taipei and in the Hsinchu Science Park, to seek more revenue, but continue to run its plants in Chunan Township, Miaoli and in the Southern Taiwan Science Park for solar cell module and solar energy generation system production.
UREC said it will help the affected employees to transfer to other divisions of the company or help them land new jobs.
In mid-October, UREC received a fund injection of more than NT$2.7 billion from the government in a private placement at a time when the government is pushing for its "5 plus 2" industrial initiative, including green energy development.
After the private placement, through investment from the National Development Fund (NDF) under the Cabinet and the government-controlled Yao Hwa Glass Co. Ltd, the firm has secured two seats on the EREC board of directors.
Market analysts have said that amid escalating competition in the global market, solar energy developers in Taiwan remain largely unprofitable and it is not easy for them to make an immediate turnaround.
In the wake of the workforce cut, shares of UREC fell 1.51 percent to close at NT$9.14 on the local main board Tuesday, when the benchmark weighted index ended down 0.45 percent at 10,702.78.