China’ GCL Technology [3800:HK], the world’s second-largest manufacturer of polysilicon, is planning to establish its first overseas factory in Saudi Arabia, as reported by Bloomberg on September 5. The company is currently in discussions with local government officials regarding the launch of a polysilicon manufacturing plant. This facility is anticipated to begin operations as early as 2025, with a projected annual production capacity of 120,000 tons. In comparison, GCL shipped 93,900 tons of polysilicon in 2022, double the amount from the previous year. Lan Tianshi, Joint CEO of GCL, praised Saudi Arabia’s well-developed infrastructure and extensive experience in industrial manufacturing. He noted that the country’s abundant sunlight could support its transition from an oil giant to a solar energy producer.

This expansion into Saudi Arabia aligns with the broader trend of China seeking to strengthen its relationship with the Middle Eastern nation beyond traditional oil and gas cooperation. In October of the previous year, energy ministers from both countries agreed to deepen cooperation in the energy supply chain by establishing a regional hub for Chinese manufacturers in Saudi Arabia. They also discussed collaboration in electricity, renewable energy, and clean hydrogen. Additionally, the state-run China Energy Engineering Corp (CEEC) [3996:HK] is constructing a 2.6-gigawatt solar power station in Al Shuaiba, Saudi Arabia, which is poised to become the Middle East’s largest solar project.

Sources:

https://www.bloomberg.com/news/articles/2023-09-05/chinese-solar-firm-gcl-technology-eyes-saudi-arabia-for-first-overseas-plant?srnd=premium-asia#xj4y7vzkg

https://www.scmp.com/economy/global-economy/article/3222615/china-seeks-stronger-economic-ties-saudi-arabia-beyond-crude-oil-middle-east-seeks-ideal-partner

https://www.reuters.com/business/energy/saudi-energy-minister-top-chinese-official-stress-importance-stable-long-term-2022-10-21/