Securities code: 603185 securities abbreviation: Wuxi Shangji Automation Co.Ltd(603185) Announcement No.: 2022-014 Wuxi Shangji Automation Co.Ltd(603185)
Announcement on investment and construction of 150000 tons of high-purity industrial silicon and 100000 tons of high-purity crystalline silicon projects
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Important content tips:
Name of investment target: 150000 tons of high-purity industrial silicon and 100000 tons of high-purity crystalline silicon project. The whole project is divided into two phases. The design capacity of the first phase is 80000 tons of high-purity industrial silicon project and 50000 tons of high-purity crystalline silicon project. The second phase of the project will be promoted according to the market situation.
Estimated total investment: the total investment of the project is expected to be RMB 11.8 billion, and the investment of phase I project is expected to be RMB 6 billion.
Special risk tips:
1. This investment matter still needs to be submitted to the general meeting of shareholders of the company for deliberation.
2. The implementation of the project is affected by many factors, such as the risk of delay, change or termination of the project due to the adjustment of relevant government policies and the change of project implementation conditions.
3. The total investment amount of the project is large, and the sources of funds include but are not limited to self owned funds, loans from financial institutions or other financing methods. The company will make reasonable planning and adjustment on the implementation progress of the project according to the actual capital situation.
4. The business development of high-purity industrial silicon and high-purity crystalline silicon has certain complexity. The company has not been engaged in the production and sales of relevant products, and there are risks in capital, technology, market, project management, organization and implementation, etc. At the same time, the future development of the new project company will also be affected by the upstream and downstream environment of the industry, market promotion, industry competition and other factors.
1、 Investment overview
Since 2019, the company has invested in the construction of photovoltaic monocrystalline silicon business, continued to expand production capacity, and gradually increased the demand for raw materials in the production process. In order to ensure the supply of raw materials, the company plans to invest in the construction of a production project with an annual output of 150000 tons of high-purity industrial silicon and 100000 tons of high-purity crystalline silicon in Guyang County, Baotou City, Inner Mongolia, so as to expand new silicon supply channels and further enhance the company’s comprehensive competitive advantage and profitability. The total investment of the project is expected to be RMB 11.8 billion. Among them, high-purity crystalline silicon is the raw material for the company to produce monocrystalline silicon, and high-purity industrial silicon is the raw material for the production of high-purity crystalline silicon.
The project is divided into two phases for specific implementation. The design capacity of the first phase is 80000 tons of high-purity industrial silicon project and 50000 tons of high-purity crystalline silicon project. The total investment of the project is expected to be 6 billion yuan. The second phase of the project will be promoted according to the market situation. Subsequently, the company and Guyang County People’s government will sign the project investment agreement.
Wuxi Shangji Automation Co.Ltd(603185) (hereinafter referred to as ” Wuxi Shangji Automation Co.Ltd(603185) ” and “the company”) held the 40th meeting of the third board of directors on February 24, 2022, deliberated and adopted the proposal on investing in the construction of 150000 tons of high-purity industrial silicon and 100000 tons of high-purity crystalline silicon projects.
The project investment involved in this Agreement does not constitute a connected transaction, nor does it constitute a major asset reorganization specified in the administrative measures for major asset reorganization of listed companies. According to the Listing Rules of Shanghai Stock Exchange, the articles of association and other relevant provisions, this investment needs to be submitted to the general meeting of shareholders of the company for deliberation.
2、 Basic information of the counterparty of the investment agreement
1. Name: Guyang County People’s Government
2. Address: No. 1, Minzhu street, Jinshan Town, Guyang County, Baotou City, Inner Mongolia Autonomous Region
3. Nature of unit: local government organization
4. Relationship with listed companies: no relationship
3、 Basic information of investment projects
1. Project Name: 150000 tons of high-purity industrial silicon and 100000 tons of high-purity crystalline silicon.
2. Project content: invest in the construction of 150000 tons of high-purity industrial silicon and 100000 tons of high-purity crystalline silicon projects in Jinshan Industrial Park, Guyang County, Baotou City, Inner Mongolia Autonomous Region. The total investment of the project is expected to be RMB 11.8 billion. The whole project is divided into two phases. The design capacity of the first phase is 80000 tons of high-purity industrial silicon project and 50000 tons of high-purity crystalline silicon project. The total investment of the project is expected to be 6 billion yuan. The second phase of the project will be promoted according to the market situation.
3. Project land: it is proposed to be located in Jinshan Industrial Park, Guyang, Baotou city.
4. Investment progress: it is expected to reach production in 2023.
5. Source of funds: including but not limited to self owned funds, loans from financial institutions or other financing methods. The company will reasonably plan and adjust the implementation progress of the project according to the actual capital situation.
4、 Main contents of the investment agreement to be signed
Party A: Guyang County People’s Government
Party B: Wuxi Shangji Automation Co.Ltd(603185)
(I) project content
1. Main contents of the project:
Party B plans to set up a pure silicon industrial company in Baoyang city and a subsidiary of Party B. Party B intends to carry out the production project of 150000 tons of high-purity industrial silicon and 100000 tons of high-purity crystalline silicon through its holding subsidiary. The total investment of the project is expected to be RMB 11.8 billion. The whole project is divided into two phases. The design capacity of the first phase is 80000 tons of high-purity industrial silicon project and 50000 tons of high-purity crystalline silicon project. The total investment of the project is expected to be 6 billion yuan. The second phase of the project will be promoted according to the market situation.
Party A shall provide Party B with a total of 3.8gw photovoltaic power plant index and 1.7gw wind power plant index, and the project shall be declared and implemented in batches.
2. Project land
The project is located in Jinshan Industrial Park, Baotou.
(II) main rights and obligations of both parties
1. Party A shall set up a special team for Party B’s project, which shall be responsible for coordinating the relationship between various departments of districts, cities and counties (such as project approval, land, power grid, etc.), index implementation, power grid procedures, etc. within the scope of authority.
2. Within the scope permitted by laws and policies, Party A shall actively assist the project company in striving for preferential policies, give support to the joint venture project company, and actively help Party B obtain project documents such as project initiation, fire protection, environmental impact assessment, safety assessment, energy assessment, water and soil conservation, occupational health, land, planning, construction permit and sewage discharge permit that meet the requirements of national laws, regulations and relevant policies.
3. Party A is responsible for removing (including but not limited to) high-voltage transmission lines, diversion channels, auxiliary pipelines, other structures and buildings on the ground and other influencing factors in the project land to ensure that the above site selection meets the requirements of the project site selection.
4. Party B promises that the project implemented by the project company will use the most advanced technology mastered by Party B, and the energy consumption and environmental emission indicators per 10000 yuan of GDP will reach the advanced value of the industry access standard.
(III) liability for breach of contract
1. If the relevant provisions of this agreement cannot be implemented due to changes in national laws, regulations and policies, it shall not be deemed as a breach of contract and shall be solved by all parties in a fair and reasonable manner.
2. If one party breaches the contract, the observant party has the right to investigate the losses caused by the breach from the breaching party.
(IV) effectiveness of the agreement
1. This Agreement shall come into force after being signed and sealed by the legal representatives or authorized representatives of both parties.
2. Notwithstanding the provisions of paragraph 1 of this article, the effectiveness of this Agreement shall be subject to the approval of the competent authority of Party B. 3. This agreement is made in quadruplicate, with Party A and Party B holding two copies respectively, which have the same legal effect.
5、 Impact of this investment on the company
The investment of the company is 150000 tons of high-purity industrial silicon and 100000 tons of high-purity crystalline silicon. High purity crystalline silicon is the raw material for the production of monocrystalline silicon, and high-purity industrial silicon is the raw material for the production of high-purity crystalline silicon.
At present, the market supply of raw material polysilicon is relatively tight, and the price increases greatly. The company’s monocrystalline silicon production capacity continues to expand. The existing monocrystalline silicon production capacity has reached 30GW, and the demand for raw materials gradually increases in the production process. This investment will help the company to obtain new channels for stable supply of silicon materials and ensure the supply of raw materials; It is beneficial for the company to strengthen its advantages in raw material quality assurance, supply cycle and transportation cost, and ensure the safety and stability of production and operation; It is beneficial for the company to seize the development opportunity of silicon material market and further improve the company’s comprehensive competitiveness and profitability. This investment is in line with the company’s strategic layout in the photovoltaic industry chain and the company’s long-term development plan.
In this investment, there is no new related party transaction and horizontal competition, and there is no damage to the interests of listed companies and shareholders.
6、 Risk analysis of this investment
1. This investment matter still needs to be submitted to the general meeting of shareholders of the company for deliberation.
2. The implementation of the project is affected by many factors, such as the risk of delay, change or termination of the project due to the adjustment of relevant government policies and the change of project implementation conditions.
3. The total investment amount of the project is large, and the sources of funds include but are not limited to self owned funds, loans from financial institutions or other financing methods. The company will make reasonable planning and adjustment on the implementation progress of the project according to the actual capital situation.
4. The business development of high-purity industrial silicon and high-purity crystalline silicon has certain complexity. The company has not been engaged in the production and sales of relevant products, and there are risks in capital, technology, market, project management, organization and implementation, etc. At the same time, the future development of the new project company will also be affected by the upstream and downstream environment of the industry, market promotion, industry competition and other factors.
7、 Documents for future reference
Resolution of the 40th meeting of the Wuxi Shangji Automation Co.Ltd(603185) third board of directors
It is hereby announced.
Wuxi Shangji Automation Co.Ltd(603185) board of directors February 25, 2022
