IRICO Group New Energy Will Supply PV Glass to GCL System Integration Technology in a Deal Estimated Around RMB 2 Billion- EnergyTrend

IRICO Group New Energy Will Supply PV Glass to GCL System Integration Technology in a Deal Estimated Around RMB 2 Billion

2022-05-30 9:30

GCL System Integration Technology Co. Ltd. announced on May 20 that it has entered into a strategic cooperation agreement with IRICO Group New Energy Co. Ltd. Under the agreement, IRICO will be supplying 3.2mm PV glass to GCL from May 2022 to April 2024. The total quantity and value of the transaction is pending on further negotiations between the two parties and will ultimately depend on the actual procurement orders from GCL. Using the average price of 3.2mm PV glass in the Chinese market in May as a reference, the total value of the transaction is calculated to reach around RMB 2.021 billion (including tax). GCL stated that this latest deal represents an expansion of a partnership that was first established in 2014. The inking of the agreement was first reported by Chinese news outlets.

IRICO Group New Energy (here shortened as IRICO) supplies various types of PV glass products, whereas GCL System Integration (here shortened as GCL) supplies PV modules and provides EPC service for the setups of integrated energy solutions. Both companies are based in China.

According to GCL, the total value of the PV glass it has procured during the recent two years comes to around RMB 160 million. The company noted that its demand for PV glass has been constrained by the structural adjustments made to its module production capacity. Of the RMB 160 million, IRICO and its subsidiary account for about RMB 66 million. GCL further stated that as the production capacity of its module manufacturing base in the Chinese city of Hefei expands, its demand for PV glass also rises. Therefore, it has decided to form a strategic cooperation relationship with IRICO in order strengthen the glass section of its module supply chain. With the latest deal, GCL will ensure the stability of its glass supply. This, in turn, will lessen the impacts of price and supply fluctuations on manufacturing operation and cost structure. Furthermore GCL will be able to expand its module business through improvements in the price competitiveness and profit margins of its products.