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Suntech Power Holdings has signed an eight-year (2009 to 2016) polysilicon supply agreement with DC Chemical Co. Ltd valued at approximately $631 million for the term of the supply contract.
"The funds from our recent convertible senior notes offering have put us in a strong position to enter into large, long-term contracts such as this one with DC Chemical,” commented Dr. Zhengrong Shi, Suntech's Chairman and Chief Executive Officer. “We highly respect DC Chemical's ability to rapidly develop commercial scale production of polysilicon and contribute to the growth of the solar industry. Partnering with DC Chemical for high quality polysilicon will help to expand Suntech's relationship with companies in the South Korean solar industry as well as building our long-term supply pipeline and accelerating our path to grid parity solar."
DC Chemical of Korea is a new entrant to the polysilicon market having started construction of a 5,000 ton polysilicon plant in 2006 at an estimated cost of approximately $350 million. Initial production started in January 2008. An expansion plan is in place to boost annual production by a further 10,000 tons, starting in the first half of 2009 at a cost of $780 million.
