Hoku signs 10-year deal


POSTED: Wednesday, March 11, 2009

Hoku Materials Inc. has signed a 10-year deal to supply Shanghai Alex New Energy Co. with polysilicon beginning in early 2010.

Alex is a manufacturer of crystalline silicon solar cells, modules and photovoltaic (PV) products.

The deal by the Honolulu-based Hoku Scientific Inc. subsidiary is part of a newly amended agreement in which Alex will purchase some of the polysilicon from Jiangxi Jinko Solar Co. in east China, which already had a supply agreement with Hoku.

Instead of paying Hoku $178 million for the total contract, Jinko will now only pay $119 million while Alex will foot another $119 million. That amounts to a combined total of $238 million, payable during the 10-year period.

Hoku is currently building a polysilicon plant in Pocatello, Idaho.

“;Alex New Energy is an innovative, diversified company and an emerging leader in the solar industry,”; said Dustin Shindo, Hoku's chairman and chief executive officer. “;Hoku is very pleased to have established this long-term relationship in a manner that will benefit all three companies — Hoku, Jinko and Alex.”;

As part of the new deal, Jinko's required prepayments were reduced to $20 million (of which $15 million was already paid). Alex's prepayment is also $20 million (of which $7 million has been paid).

Jinko still will offer Hoku discounted wafer manufacturing services while Alex will provide discounted original equipment manufacturing services.

Hoku's first shipment to Jinko is expected in the second half of this year, and its first shipment to Alex is expected in the first half of next year.