Solar manufacturer Suntech Power Holdings Co., Ltd. (NYSE: STP ) today announced that it has acquired a minority stake in Shunda Holdings Co. Ltd, a manufacturer of solar wafers based in China, for $98.9 million.
Suntech also announced a 13-year supply agreement has been signed with a subsidiary of Shunda Holdings Co. Ltd. for silicon wafers with a total volume of approximately 7 gigawatts (GW) from 2008 to 2020. Financial terms of the deal were not disclosed.
Suntech Power bought its share of Shunda Holdings from Actis, a private equity investor in emerging markets, and Waichun Investment Fund.
Shunda is building a polysilicon plant in Yangzhou, Jiangsu province, China with a first phase capacity of 1,500 metric tons. Shunda intends to initiate production of solar grade polysilicon in the third quarter of 2008.
The polysilicon plant will utilize Siemens technology, with a closed-loop recycling system, and employ equipment and engineering services from vendors including GT Solar Incorporated.
Dr. Zhengrong Shi, Suntech’s Chairman and CEO, said, "Located in our home province of Jiangsu, Shunda’s proximity to Suntech will enhance the synergies that we can achieve by integrating polysilicon refinement right through to the manufacture of premium quality solar modules. Shunda’s clear commitment to maintaining the highest environmental standards in the production of polysilicon was another key factor considered in the lead up to this partnership. We look forward to building a close and mutually supportive relationship with Shunda."
Dr. Shi continued, "The relatively small quantities of silicon wafers to be supplied in 2008 from Shunda will replace some of our higher-priced spot market silicon and will make an important contribution towards the completion of our 2008 production target of 530MW. With this long-term agreement, we are able to increase our silicon secured for 2009 by 50MW to 800MW of silicon with an average cost more than 20% below our average cost of silicon in 2007."
About Suntech
Suntech Power Holdings Co., Ltd. is a leading solar energy company as measured by both production output and capacity of solar cells and modules. Suntech designs, develops, manufactures, and markets a variety of solar products for electric power applications in the residential, commercial, industrial, and public utility sectors. Suntech also offers building integrated photovoltaic (BIPV) products under the MSK Solar Design Line(TM).
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