Wacker is in accord with terms of startup
by By DAVID DAVIS Managing Editor
Nov 25, 2012 | 3012 views | 0 0 comments | 9 9 recommendations | email to a friend | print
Wacker Chemie AG did not violate any agreements by delaying the start date at its polysilicon production plant until mid-2015.

Wacker announced Oct. 24 it was pushing the date back by about 18 months in response to changing solar market conditions and current overcapacities for polysilicon. The original time of completion was set at the end of 2013.

Cleveland/Bradley Chamber of Commerce Vice President for Industrial Development Doug Berry said Wacker is in full compliance with the terms of a performance agreement.

“The performance agreement doesn’t actually take effect until Dec. 31, 2017,” he said.

“We would like to have all of the jobs today, but when you are dealing with a company and a project on the scale of Wacker, one of the largest in the nation that’s ongoing in the private sector, there needs to be flexibility on both sides to work this through, get it settled and operational and productive for us. The long term is what we’re looking at.”

The Bradley County plant is the company’s largest capital investment outside Germany and is one of the largest continuing private industry investments in the United States.

He said if market conditions improve and if Bradley County provides a good work environment and good employees, efficient, low-cost operations and adequate utility infrastructures, “then hopefully we can convince Wacker to put other divisions and product lines in here because this is an anchor for North America.”

According to the agreement between Wacker and Bradley County, the company would pay a base amount of taxes for three years.

“They pay no taxes other than the baseline property taxes that property was generating at the time they purchased it. That was effective Jan. 1, 2011, to Jan. 1, 2014,” Berry said.

“There will be a reduction of the tax abatement if they fall below $800 million in capital investment and 400 full-time employees by the determination date, which is Dec. 31, 2017.

“Based on our last conversation with them, they already had over 200 employees and invested more than $1 billion,” Berry said. “Wacker has been extremely honest and open with us on decisions they are making and adjustments they are making to their schedule.”

Production equipment is either being fabricated or en route, but the money is spent.

When Wacker Chemie announced the project, the company made it known then it would take time to carefully plan and wait for market conditions to improve. Now that the completion schedule has been refined, Wacker is aligning its construction schedule and staffing ramp-up to correspond with the startup of production.

The key project targets for plant capacity, investment and jobs remain unchanged, according to the October statement.

“We were in the depths of a large recession,” Berry said. “They announced they would start in January 2011 and that’s when they started. What they have delayed is startup [for] 12 to 18 months, which will enable them to basically take a second look at design and improve on the design and the cost effectiveness of that design. I think that’s as much of a driver as the current slowness of the economy.”

Wacker Chemie said in October its decision brought the development of its global polysilicon capacities in line with anticipated customer demand.

Wacker Chemie A.G. announced on Feb. 25, 2009, amid great fanfare at Lee University, plans to build a polysilicon plant west of Charleston near Olin Chemical Corp., which will be a supplier of chlorine used in the purification process of raw silicone.

The initial investment grew from $685 million to $1 billion, then from $1.2 billion to a current estimate of $1.8 billion.

In March 2009, the last “i” was dotted and the final “t” was crossed on a contract for 550 acres of land in north Bradley County where the $1 billion polycrystalline silicon production facility would be built.

The company bought approximately 78 acres from Olin Corporation and a little more than 450 acres from Wright Brothers Construction Co., of Charleston. The property is located along McBryant Road and Lower River Road near Olin Corp.

Wacker Chemie AG officially started construction work on April 8, 2011, with a groundbreaking ceremony attended by area business, state and local government representatives.