Wacker progressing
Jan 23, 2013 | 683 views | 0 0 comments | 4 4 recommendations | email to a friend | print
While not yet a cause for local alarm, last week’s announcement that a new Clarksville plant in Middle Tennessee is laying off three-fourths of its workforce just ahead of production startup nonetheless has captured the attention of more than a few economic development and government leaders.

As reported in a front-page article by our newspaper, Hemlock Semiconductor is nearing the completion of its $1.2 billion plant which will produce polycrystalline silicone, the same product the new Wacker Polysilicon North America facility near Charleston will manufacture once operations kick off in mid-2015.

At issue is Hemlock’s disclosure that it is already sidelining 300 of its 400 employees in Clarksville, and another 100 workers at its Michigan plant. The cause is what company officials are calling a significant oversupply of polysilicon and the threat of protective tariffs on these products that are sold to customers in China.

Obviously, the most asked question locally is: If one new manufacturer of polycrystalline silicone within our state is already rolling back its payroll based on product demand, is the same likely to happen to someone else pursuing the same consumer market?

It’s a legitimate concern, but Wacker, local economic development and Cleveland/Bradley Chamber of Commerce leaders believe the new Bradley County employer is not headed down the same path.

True, last October Wacker announced a rollback of its production startup by 18 months, from late 2013 to mid-2015. The reasoning, as explained then, was a softer-than-expected market for polycrystalline silicone, a component used in the manufacture of solar panels. High inventory and weak demand had pushed down prices for Wacker’s planned product.

But it didn’t mean Wacker was abandoning its $1.8 billion investment, an aggressive initiative whose north Bradley County commitment grew over time from an original $685 million development.

According to William Toth, Wacker Chemical Corp. manager of Corporate Communications, the company is aligning its staffing needs to correspond with production startup. As such, the company plans no layoffs from the Charleston plant workforce that has already been hired.

Shared concerns were recently discussed in a gathering that included Ross Tarver, chairman of the Economic Development Council; Gary Farlow, president and CEO of the Chamber of Commerce; Doug Berry, vice president of Economic Development for the local Chamber; and Dr. Ingomar Kovar, president and CEO of Wacker Polysilicon North America.

Tarver told our newspaper later, “This project is still moving forward with the same speed they recently announced, so I don’t think we’re having the same issues as Hemlock.”

Berry’s assessment parallels Tarver’s, but he also points to a distinct difference in customer base between Hemlock and Wacker. Hemlock is U.S.-based with an existing domestic market share; however, part of the company’s strategy is to disperse product internationally into China and emerging markets. Wacker, on the other hand, has a manufacturing footprint focused more on North America.

In Berry’s words, “What you have is a broader global perspective in the Hemlock operational perspective and Wacker saying they are establishing themselves for the growing and emerging U.S. market.”

Accordingly, a recent business analysis by Bernreuter Research — a German company specializing in market research on the polysilicon and solar industries — projects a production increase within the industry of 6.5 percent in 2013.

We hope the research is accurate.

In the meantime, we would caution naysayers against sounding undue alarms.

Let us await the numbers. Then we can assess the future.