REC Silicon to build 19,000MT polysilicon plant in China under JV partnership



REC Silicon is licensing its polysilicon FBR technology and forming a joint venture with China-based Shaanxi Non-Ferrous Tian Hong New Energy Co to build and operate a major polysilicon production complex in Yulin, Shaanxi Province.

The polysilicon plant will use REC Silicon’s next generation fluidized bed reactor (FBR) technology and have an initial nameplate capacity of 18,000MT of granular polysilicon.

However, the plant will also house 1,000MT of Siemens-based polysilicon and 500MT of silane gas loading, according to the company, which would enable the JV to offer silane gas, solar and electronic grade polysilicon.

The production joint venture will construct and operate a new plant for the production of silane gas, solar and electronic grade polysilicon, utilizing REC Silicon's next generation fluidized bed reactor (FBR) technology.

The JV plans would almost double REC Silicon’s polysilicon capacity after recently noting production in 2014 would be limited to 19,764MT, down from a peak in 2012 of 21,405MT.

The new plant will be located in Yulin, in the Shaanxi Province, and is expected to have capacity of 18,000 metric tons of granular polysilicon, an additional 1,000 metric tons of Siemens polysilicon, and 500 metric tons of silane gas loading.

Shaanxi Non-Ferrous is expected to provide up-front payments to REC Silicon totalling US$198 million in March and August of 2014, for the production joint venture's rights to use its technology, though this investment figure will be paid back through production and sales revenue.

However, Shaanxi Non-Ferrous is expected to contribute US$254 million in two instalments to acquire a 51% interest in the polysilicon JV.

REC Silicon said it would contribute US$244 million to acquire a 49% equity interest in the JV.

As part of the initial deal, REC Silicon and Shaanxi Non-ferrous will also form a new sales joint venture closer to the start of production ramp. The term of the sales joint venture was said be six years, with each party owning a 50% equity interest.

Tore Torvund, CEO of REC Silicon ASA said, “This joint venture is a key step in the worldwide growth of REC Silicon and will strengthen its leadership position in the industry.  It demonstrates the value of our technology and allows us to expand our capacity without requiring REC Silicon to use its current assets or to raise other funds in order to make its capital contribution.”

However, REC Silicon has been hit with the heaviest import duties by the Chinese government after conducting an anti-dumping investigation. Both its manufacturing facilities are based in the US.

Further details are expected to be disclosed in a conference call to be held this afternoon.

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