Oslo, September 20, 2006: Renewable Energy Corporation (REC) has decided to more than quadruple its solar cell production and double its solar module production within 2008. Annualized revenues from the cell expansion will represent around NOK 3.7 billion, and from the module expansion, around NOK 1.5 billion at current price levels (according to Solar Annual 2006).
REC continues to strengthen its market position by increasing its activities in solar cell and solar module production. The company's production of cells and modules will be increased from today's 45MW level, up to a total of 225MW in cells and 100MW in modules. Both plants will continue to utilize multicrystalline wafers from REC Wafer.
"We are now taking another important step to further implement our integrated business model strategy. Growing our cell and module business will leverage our strong position in polysilicon and wafers, and thus capture more of the value generated in these businesses", says Erik Thorsen, President and CEO of REC ASA.
Both expansion projects will be initiated immediately through extensions of the existing cell plant in Narvik, Norway, and the module plant in Glava, Sweden. The cell expansion will be undertaken in two equal steps. Ramp-up of the first step will start in Q4 2007, and the second step will start in Q2 2008. Total investment related to cell expansion will amount to approximately NOK 700 million and includes a number of important technology steps. The ramp-up of the module capacity which is expected to start Q4 2007, also includes a significant increase in automation of the existing production. Total investment related to the solar module expansion is approximately NOK 100 million. The expansions will create approximately 175 new jobs in Narvik and 20 new jobs in Glava over the next 18 months.
"REC Solar has already today the competencies and resources necessary for continued strong growth. Through further optimizing the size of our existing cell and module plants we are also ensuring that these plants have the necessary scale and competitive edge to strengthen REC's market position going forward", says Thor Christian Tuv, Executive Vice President Solar of REC ASA.
The expansion projects also create room for REC to subsequently introduce its own proprietary technology in both the cell and module manufacturing. With a potential to increase cell efficiency by between 1 - 2 percentage points on multicrystalline wafers, this new technology will contribute to achieve a targeted cost reduction in cells and module manufacturing.
"We are very exited about the prospects of taking the next technology step and thereby moving further down the cost-per-watt curve. The expansions will also allow us to retrofit parts of this new technology into our existing production lines", Erik Thorsen adds.
REC is uniquely positioned in the solar energy industry as the only company with a presence across the entire value chain. REC Silicon and REC Wafer are the world's largest producers of solar grade silicon and wafers for solar applications. REC Solar produces solar cells and solar modules and is gaining market share through strong growth. REC Group had revenues in 2005 of 2,454 MNOK and an operating profit of 601 MNOK. Please also see www.recgroup.com
For more information, please contact;
Erik Thorsen, President & CEO, +47 90 75 66 85
Thor Christian Tuv, Executive Vice President Solar; +47 959 27 203
Jon Andre Løkke, SVP & Investor Relation Officer, +47 67 81 52 65