Wednesday, June 27, 2007

Construction on large polysilicon production base starts in southwest China

Xinhua Economic News Service , June 28, 2007 Thursday 5:00 AM EST

CHONGQING, June 28 (CEIS) - Construction on a large polysilicon production base involving total investment of four billion yuan started in Wanzhou District, Chongqing Municipality, southwest China, on June 27.

The project, invested by Daqo Group, will be the largest of its kind in China as its first phase project with an annual capacity of 3, 000 tons, is put into production in June of next year.

When the whole project is completed in 2009, it will be capable of producing 6,000 tons of polysilicon a year.

It is of important strategic significance for China to break the monopoly of foreign companies, ease the shortage of raw material supply for its booming solar industry and sharpen the international competitive edge of its solar industry, said market analysts.

Daqo Group, well-known as a middle-voltage electrical equipment producer with annual sales revenue topping six billion yuan, has obtained the exclusive right of polysilicon production technology in China from a German technology transfer company. It is learned that the technology can help Daqo produce both solar-class polysilicon and electronic-class one, with relatively low energy consumption and cost.

Wanzhou of Chongqing is rich in silicon ore, raw materials for producing polysilicon. After the polysilicon project is launched, Wanzhou will try to extend the production chain to the downstream silicon wafer and solar cell sectors.

China's major solar cell makers including Suntech (NYSE: STP), JA Solar (NASDAQ: JASO) and Solarfun Power (NASDAQ: SOLF) are all likely to be Daqo's key clients, but related cooperation agreements are expected to be signed next year, according to Xu Guangfu, chairman of Daqo Group.

June 27th, Daqo Group Multi Silicon Project Broke Ground in Chongqing. This will be the largest multi silicon production base in China, and the total investment is 4 Billion RMB (400 Million Euro).

Daqo Group plans to start the production in June 2008, and the production capacity will reach 3,000 Ton in 2008 and 6,000 Ton in 2009.