Høvik, October 24, 2006
REC has entered into a long-term agreement for the supply of multi-crystalline silicon wafers to Suntech, one of the largest and fastest growing solar cell and module manufacturers in the world. Under the agreement, REC will deliver wafers to Suntech worth approx. NOK 1.2 billion over the next 5 years.
REC, the world's largest manufacturer of multicrystalline silicon wafers for solar cells, has signed a long-term agreement with Sumitomo Corporation for the supply of wafers to Suntech Power Holdings Co., Ltd. The 5-year agreement, which is structured as a take-or-pay contract with a pre-determined price decrease on an annual basis, has a value of approx. NOK 1.2 billion (USD 180 million). Delivery of wafers under the new agreement starts from the first quarter 2007.
Sumitomo Corporation, with whom REC has had a long standing business relationship, will act as REC's commercial representative towards Suntech.
'This is the fourth long term agreement on wafers that REC has entered into since summer this year. Suntech, which is one of the fastest growing solar cell and module companies in the world, will become a new valuable strategic customer of REC, and this agreement further cements REC's position as the leading manufacturer of multicrystalline silicon wafers and strengthen our platform for further growth ', says Erik Thorsen, President & CEO of REC ASA.
Suntech, based in Wuxi outside Shanghai, China, is a leading solar energy company in the world measured by production volume of solar cells. Production capacity is expected to reach 270 MW by the end of 2006. Suntech is listed on the New York Stock Exchange.
'With this agreement we continue to broaden our customer base and we expect the agreement with Suntech to bring our products into new markets and applications', says John Andersen, Jr., Executive Vice President Wafers of REC ASA.
Including ongoing expansion projects, REC will double its current wafer production capacity to approx. 600 MW. As additional polysilicon becomes available from the expansion projects in REC Silicon, the contract portfolio of REC now forms the basis for further wafer expansion projects going forward.
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. REC Group had revenues in 2005 of 2.454 MNOK and an operating profit of 601 MNOK. Please also see www.recgroup.com
About Sumitomo Corporation
Sumitomo Corporation engages in diverse business activities through its worldwide network. These include various domestic and overseas transactions and import and export of a wide range of goods and commodities, and also providing a wide range of services and investing in fields such as metals, transportation and construction systems, machinery and electricity, media, electronics and network, chemicals, mineral resources and energy, consumer goods and services, materials and real estate, and finance and logistics. Please also see www.sumitomocorp.jp
Suntech designs, develops, manufactures, and markets a variety of high quality, cost effective and environmentally friendly PV cells and modules for electric power applications in the residential, commercial, industrial, and public utility sectors. Suntech's customers are located in various markets worldwide, including Germany, Spain, China and the United States. Suntech is listed on the New York Stock Exchange (NYSE: STP). Please also see www.suntech-power.com.
For further information please contact:
Erik Thorsen, President & CEO; +47 907 56 685
John Andersen Jr., Executive Vice President Wafers; +47 90 17 40 80
Jon Andre Løkke, SVP & Investor Relations Officer; +47 67 81 52 65