Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (NASDAQ: HOKU) established to manufacture and sell polysilicon for the solar market, and Shanghai Alex New Energy Co., Ltd. (Alex), a manufacturer of crystalline silicon solar cells, modules and photovoltaic (PV) products in China, today announced the amendment of the polysilicon supply agreement in effect between the two companies.
According to the terms of the amendment, both companies have agreed to delay the first shipment of polysilicon by Hoku to Alex from the first quarter to the third quarter of calendar year 2010. The other commercial terms of the supply agreement remain unchanged, including pricing, contract duration, and shipment volumes, among others.
"This amendment adjusts the timing of our first delivery to Alex to a date that is amenable to both companies," said Dustin Shindo, chairman and chief executive officer of Hoku Scientific. "Hoku was prepared to ship third-party product in accordance with our contract, but the updated schedule more closely matches Alex's revised supply chain forecasts while still conforming nicely to our projected production ramp. We look forward to the commencement of our regular deliveries of polysilicon to Alex in 2010."
"We are pleased by this amendment because it provides clear benefits to both companies, and reflects the continued strong partnership between Hoku and Alex," said Alex's president, Lian Wen Zhang.
Subsequent to the recent closing of its financing with Tianwei New Energy, Hoku reported it was now preparing for a reactor test demonstration in the first quarter of calendar year 2010, followed by a phased ramp-up to a planned initial production capacity of approximately 2,500 metric tons of polysilicon per year. The Company noted that the reactor test demonstration was pushed back slightly due to the timing of the close of the transaction with Tianwei.
Hoku explained that this first phase of production would be completed using third-party trichlorosilane (TCS), initial quantities of which had already been procured and delivered to the Company's Pocatello facility. Hoku further explained that this revised ramp up and production schedule was expected to provide sufficient polysilicon to fully satisfy the Company's current contractual delivery obligations.
Hoku reported that it expected to continue adding reactor capacity throughout calendar 2010 until reaching the plant's full annual production capacity of 4,000 metric tons in the second half of the year. Hoku also said that it planned to bring its on-site TCS production facility online by the end of calendar 2010, which would eliminate the Company's need to procure third-party process chemicals.
About Hoku Scientific, Inc.
Hoku Scientific (NASDAQ: HOKU) is a diversified clean energy technologies company with three business units: Hoku Materials, Hoku Solar and Hoku Fuel Cells. Hoku Materials plans to manufacture, market and sell polysilicon for the solar market from its plant currently under construction in Pocatello, Idaho. Hoku Solar markets and installs turnkey photovoltaic systems and related services in Hawaii. Hoku Fuel Cells has developed proprietary fuel cell membranes and membrane electrode assemblies for stationary and automotive proton exchange membrane fuel cells.
Hoku, Hoku Solar, and the Hoku Scientific logo are trademarks of Hoku Scientific, Inc., and Hoku Materials is the trademark of Hoku Materials, Inc., all rights reserved. All other trademarks, trade names and service marks appearing in this press release are the property of their respective holders.
About Shanghai Alex New Energy Co., Ltd.
Shanghai Alex New Energy Company, Ltd. and Shanghai Alex Solar Energy Science and Technology Company, Ltd. are solar industry holding companies and subsidiaries of Shanghai Huayi Enterprises Group in China. The two companies and their subsidiaries are comprehensively engaged in R&D, manufacturing, sales and technical service of crystalline silicon solar cells, modules and other photovoltaic applications, systems and products. Alex Solar Modules Co., Ltd. produces solar panels that are UL-listed, CE and TUV certified, and that are designed and produced in strict compliance with IEC and ISO quality and environmental standards. Alex Solar Cell Co., Ltd. produces high efficiency crystalline silicon solar cells.
Shanghai Huayi Enterprises Group is a privately-held, diversified consortium of nine holding companies and two joint ventures. Group subsidiaries are active in a variety of lines of business, including: management, manufacturing, construction, trade, investment, real estate, and energy. The Group is headquartered in China, and is active both domestically and internationally in New Zealand and Hong Kong.
This press release contains forward-looking statements that involve many risks and uncertainties. These statements relate to Hoku Scientific's (including Hoku Materials') ability to successfully ramp up production to make commercial quality product and ship to Alex by Q3 CY10; Hoku Scientific's (including Hoku Materials') ability to complete a reactor test demonstration in Q1 CY10; Hoku Scientific's (including Hoku Materials') ability to manufacture solar-grade polysilicon using trichlorosilane procured from third-party manufacturers; Hoku Scientific's (including Hoku Materials') ability to ramp up to an annualized production capacity of 2,500 metric tons; Hoku Scientific's (including Hoku Materials') ability to meet its contractual delivery obligations; Hoku Scientific's (including Hoku Materials') ability to ramp up to an annualized production capacity of 4,000 metric tons by the second half of CY10; Hoku Scientific's (including Hoku Materials') ability to bring its trichlorosilane production plant online by the end of CY10; Hoku Scientific's (including Hoku Materials') future financial performance; Hoku Scientific's (including Hoku Materials') business strategy and plans; and objectives of management for future operations. In some cases, you can identify forward-looking statements by terms such as "anticipate," ''believe," ''can," ''continue," ''could," ''estimate," ''expect," ''intend," ''may," ''plan," ''potential," ''predict," ''project," ''should," ''will," ''would" and similar expressions intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause Hoku Scientific's actual results, performance, time frames or achievements to be materially different from any future results, performance, time frames or achievements expressed or implied by the forward-looking statements. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. In evaluating these statements, you should specifically consider the risks described in Hoku Scientific's filings with the Securities and Exchange Commission, as applicable. Except as required by law, Hoku Scientific does not assume any obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.