(Yicai) Sept. 12 -- Chinese solar parts manufacturer Hongrida Technology and photovoltaic module maker Sunna are investing USD34 million to build a solar panel and accessories factory in Vietnam as many major customers shift production to the Southeast Asian country.

The new facility, which will be located in Thai Binh city, will have an annual output of 1.2 gigawatts of high-efficiency photovoltaic modules and supporting junction boxes, Kunshan, eastern Jiangsu province-based Hongrida said yesterday.

Due to shifts in the global supply chain, many of Hongrida’s main clients in the consumer electronics sector are migrating to Southeast Asia and especially Vietnam, the maker of solar panel connectors and junction boxes said. Therefore, the Vietnam base will help the company better respond to customer needs and enhance its overall anti-risk ability.

The duo will also construct a smart factory that will produce 300 million consumer electronic connectors and spare parts a year, Hongrida said. The payback period of the project is around two years, including the six-month construction period.

Hongrida’s unit in Singapore and Hong Kong-based Sunna, which has many years of experience of production in Vietnam, will set up a joint venture in the country that will be responsible for the investment, construction and operation of the project. The Singapore subsidiary will own 71.5 percent of the JV.

The news did not boost Hongrida's share price [SHE: 301285], which was trading down 1.4 percent at CNY15.35 (USD2.10) as of 2 p.m. China time today. Earlier in the day it sank 4.5 percent to CNY14.86.

Editor: Kim Taylor