September 20, 2017 / 4:02 PM / 2 years ago

Wacker Chemie expects U.S. polysilicon plant to be out of action for months

BERLIN/MUNICH (Reuters) - German specialty chemicals group Wacker Chemie’s (WCHG.DE) polysilicon plant in Charleston, Tennessee, is likely to remain out of commission for several months after an explosion this month, it said on Wednesday.

Company sign of Wacker Chemie AG is pictured in the south-east Bavarian town of Burghausen April 1, 2014. REUTERS/Michaela Rehle/File Photo

The $2.5 billion U.S. plant, Wacker’s biggest single investment, was completed only last year and accounted for about a quarter of the group’s annual production of polysilicon, which is used to make solar cells.

“Production will not start until a thorough inspection is completed and it is certain that the facility is safe,” said Tobias Brandis, global president of Wacker’s polysilicon division.

“From today’s perspective, restarting will take several months.”

Chief Executive Rudolf Staudigl said on Wednesday that the roughly 60,000 tonnes of capacity at Wacker’s two German polysilicon plants is enough to fulfill all existing contracts.

In addition, the company has built up stocks “in significant volumes” in recent months, he said.

The explosion on Sept. 7 was caused by an unspecified technical defect that led to a leak of hydrogen that subsequently caught fire, Wacker said.

Two workers were injured in the explosion and taken to hospital. Wacker said both were released the same day.

CEO Staudigl said that the financial impact of the explosion would be limited because insurers would compensate Wacker for both physical damage to the plant and lost production.

“We do not need to change our profit forecast because of this,” Staudigl said.

Wacker aims to post 2017 operating earnings before interest, tax, depreciation and amortization of between 900 million euros ($1.1 billion) and 935 million euros.

(This version of the story was corrected to show the plant accounts for about a quarter, not 5 percent, of Wacker’s annual polysilicon production, in second paragraph)

Reporting by Maria Sheahan and Alexander Huebner; Editing by David Goodman

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