Shanghai, China [RenewableEnergyAccess.com] Solarfun Power Holdings Co., Ltd., an established manufacturer of both photovoltaic (PV) cells and modules in China, recently announced that it has entered into an agreement to acquire a 52% equity interest in Jiangsu Yangguang Solar Technology Co. Ltd. for approximately US$8 million from Nanjing Linyang Electric Power Investment Co., Ltd.
Yangguang Solar, an early stage company, is engaged in silicon wafer production. It was founded by Jiangsu Zhongneng PV Technology Development Co., Ltd., a polysilicon supply company in China.
“This acquisition is a very positive strategic development for Solarfun,” said Yonghua Lu, Chairman and CEO of Solarfun. “It allows us to secure access to a steady supply of silicon wafers at a reasonable price. Moreover, in an industry where quality is paramount, competition intense, and raw materials often in short supply, acquiring Yangguang Solar ensures that we will be able to provide our customers with top quality products at a competitive price.”
Yangguang Solar plans to commence operations in October 2007 with an annual production capacity of 15-20 MW of 5-inch silicon wafers. Total production in 2007 is expected to be 3-5 MW. The company intends to install additional equipment to enable it to gradually move to 6-inch silicon wafer production in 2008.
Total production capacity is expected to be 60-80 MW in 2008, with expected annual production of 50-60 MW.
Yangguang Solar has secured 1,950 tons of polysilicon supply over a three-year period from Zhongneng. The agreement calls for delivery of 50 tons in 2007, 700 tons in 2008 and 1,200 tons in 2009. Solarfun has the option to acquire all or any portion of the wafers produced by Yangguang Solar if the products meet Solarfun’s testing standards.
Zhongneng has agreed to provide Yangguang Solar a 3% discount to market price for all polysilicon purchased by Yangguang Solar over the three-year supply period and Yangguang Solar has similarly agreed to provide Solarfun a 3% discount to market price for all wafers purchased from Yangguang Solar by Solarfun, if any.