I have discussed Ceradyne’s (CRDN) operating leverage in the past, and noted that what is more important than the quarterly results is whether they will prove sustainable. To that end, the company’s latest press release is interesting:
Ceradyne, Inc. announced the opening ceremonies for its new 98,000 square foot factory in Tianjin, China. This newly constructed factory will produce high purity ceramic crucibles for the forming of large polysilicon ingots for use in the manufacturing of photovoltaic silicon solar cells.
Wow! China and solar energy. Can’t get much growthier than that. Of course, they are making the crucibles that will make the ingots that will make the solar cells… kind of like saying a cement company makes the product used to build buildings in which cutting-edge pharmaceuticals are developed.
Breathless headlines aside, however, the plant marks a step in the right direction. Namely, diversification away from the body armor products that are approaching their natural demand limits.