In the June edition of Photon International, Rene Boisvert, the head of Timminco Limited’s (TSX: TIM $23.70) subsidiary Becancour Silicon, states that Timminco’s customers are “declining to return the more highly contaminated ingot tops and tails for extra credit offered by Timminco.” This statement raises questions not only on the purity of Timminco’s product, but also on the nature of Timminco’s customer relationships. It also raises questions about Timminco’s sales recognition and accounting of the liability to pay customers the “extra credit.”
As reported yesterday on asensio.com (see “Timminco’s Boisvert Makes Questionable Statements on DSS”), the Photon article also included a statement that Timminco would be having its own DSS furnace installed for ingoting. Who might purchase the DSS furnace? What are the added costs associated with it? How will DSS processing impact existing contracts? Does adding DSS processing mean Timminco’s earlier purity claims about its rotary oxy-fueled furnace have changed?