Hoku's supply deal grows to $170 million
A German solar-cell maker wants more polysilicon than it had originally sought
Hoku Scientific Inc., positioning itself to capitalize on the growing demand for polysilicon, said yesterday it has increased its planned supply contract with Freiburg, Germany-based Solar-Fabrik AG to $170 million.
The nonbinding agreement previously was valued at $120 million to $140 million.
The memorandum of understanding with Hoku Materials, a division of the Kapolei-based parent company, was expected to have produced a definitive agreement by Monday. But the parties, who announced the pending deal in December, agreed to extend the 60-day deadline and now say they expect to finalize the contract "within the next few weeks."
"Based on recent developments in our contract discussions with Solar-Fabrik, we were pleased to offer them an additional allocation of our planned polysilicon production output," said Dustin Shindo, chairman and chief executive of Hoku Scientific.
Shindo had disclosed on the company's earnings conference call last month that the value of the Solar-Fabrik deal likely would increase but didn't reveal at the time an amount.
"In light of the positive progress that Hoku has made over the past few months with its polysilicon project, and our continuing discussions, we have decided to increase the volume of our planned polysilicon purchases from Hoku," Solar-Fabrik CEO Christoph Paradeis said. "Due to the modified structure of our planned agreement with Hoku, we requested additional time to finalize the contract."
Last month, Hoku signed a $370 million definitive contract with Sanyo Electric Co. Ltd. to supply polysilicon for solar panels.
In announcing that deal, Hoku said it would increase the capacity of its still-to-be-built plant in Pocatello, Idaho, to 2,000 metric tons a year from 1,500 metric tons and boost the cost for the plant to $260 million from $220 million.
Hoku hasn't disclosed the volume for either of its two customers due to competitive reasons.
However, Shindo reiterated yesterday what he said on Hoku's earlier conference call that Hoku is still talking to other companies about purchasing polysilicon.
"We continue to believe we are on the right path and I think we're very pleased with the progress we've made to date," Shindo said.