POCATELLO, ID and CHENGDU, CHINA -- 08/05/08 --
Hoku Materials, Inc., a
wholly owned subsidiary of Hoku Scientific, Inc. (NASDAQ: HOKU) established
to manufacture and sell polysilicon for the solar market, and Tianwei New
Energy (Chengdu) Wafer Co., Ltd., a subsidiary of Tianwei New Energy
Holdings Co., Ltd. that manufactures silicon wafers, photovoltaic cells,
and modules in China, today announced the signing of a definitive contract
for Hoku's sale and delivery of polysilicon to Tianwei over a ten-year
period beginning in early 2010.
According to the contract, up to approximately $284 million may be payable
to Hoku during the ten-year period, subject to product deliveries and other
conditions. The take-or-pay contract provides for the delivery of
predetermined volumes of polysilicon each year, with the first shipment in
the first half of 2010 and the remainder over a ten-year period at set
prices that will decline throughout the term of the agreement. The contract
also provides for a deposit of $15 million to Hoku in August 2008, and
requires that Tianwei make additional deposits for products in the amount
of $15 million by November 15, 2008, $10 million by January 15, 2009, and
$5 million upon first shipment. Under the agreement, Hoku will grant to
Tianwei a security interest in its polysilicon assets to secure Hoku's
obligation to repay $45 million to Tianwei as a credit against product
shipments over time.
"We look forward to a long and mutually-beneficial business relationship
with Hoku," said Tianwei's general manager, A. Guo. "We evaluated many
potential polysilicon manufacturers and are very confident in our selection
of Hoku as one of our key suppliers."
"We are pleased to enter into this long-term supply agreement with
Tianwei," said Dustin Shindo, chief executive officer of Hoku Scientific.
"Tianwei Group is an established leader in the power transmission equipment
market in China, with plans to invest heavily in the growth of their PV
business. Their diversified business and strong PV expansion plans make
them an excellent strategic partner for Hoku."
Commenting on Hoku's aggregate sales volume, Dustin Shindo said, "Adding
together our volume allocation under this contract, together with the
allocations under our recently announced contract with Kinko Energy, and
our contracts with Solarfun, Suntech, Sanyo, and Global Expertise Wafer
Division, we are over-subscribed on our 3,500 metric tons per year of
planned polysilicon production output. Over the next several weeks, we
intend to realign our customer allocations within our available capacity as
part of our on-going contract amendment discussions with Sanyo and Global
Expertise Wafer Division."
About Hoku Scientific, Inc.
Hoku Scientific, Inc. (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 provides turnkey photovoltaic
systems in Hawaii. Hoku Fuel Cells has developed proprietary fuel cell
membranes and membrane electrode assemblies for stationary and automotive
proton exchange membrane fuel cells. For more information visit
www.hokuscientific.com.
Hoku ®, Hoku Scientific ®, Hoku Solar(TM) and Hoku Fuel Cells(TM) are
trademarks of Hoku Scientific, Inc., and Hoku Materials(TM) is a trademark
of Hoku Materials, Inc.
About Tianwei New Energy (Chengdu) Wafer Co., Ltd.
Tianwei New Energy (Chengdu) Wafer Company is a wholly owned subsidiary of
Tianwei New Energy Holdings Co., Ltd. (TWNE), with first class silicon
wafer facilities in China's Sichuan Province. By the first half of 2009,
it will have installed wafer capacity of 300 MW, with plans to expand to
600 MW from 2009. Its parent company, TWNE, is also based in Sichuan,
China. TWNE owns wafer, photovoltaic (PV) cell and module facilities. By
the end of 2008, TWNE will have 100MW of installed PV cell capacity and
60MW of installed PV module capacity, with plans to increase PV cell and
module capacity to 300 MW each in 2009. TWNE is a wholly owned subsidiary
of Baoding Tianwei Group Company, Ltd., a leading manufacturer of power
transmission equipment and green energy products in China, originally
founded in 1958. Baoding Tianwei Group Company, Ltd. has approximately
8,000 employees. For more information visit www.twnesolar.com.
Forward-Looking Statements
This press release contains forward-looking statements that involve many
risks and uncertainties. These statements relate to Hoku Materials's
ability to successfully derive revenues from the sale of polysilicon to
Tianwei New Energy (Chengdu) Wafer Co., Ltd., Solarfun, Suntech, Sanyo, and
Global Expertise Wafer Division; Hoku Materials's ability to amend its
contracts within the next several weeks with Sanyo and Global Expertise
Wafer Division; the timing, and the terms and conditions of any such
amendments with Sanyo and Global Expertise Wafer Division; the timing of
Hoku Materials's receipt of future prepayments in the aggregate amount of
$45 million from Tianwei; its ability to successfully raise sufficient
funds to establish a polysilicon manufacturing plant; its ability to
engineer and construct a production plant for polysilicon; its ability to
manufacture polysilicon; its ability to meet the delivery schedule in its
agreement with Tianwei; the quality of polysilicon to be manufactured; Hoku
Materials's costs to manufacture polysilicon, and its ability to offer
pricing that is competitive with competing products; Tianwei's plans to
expand its silicon wafer, PV cell, and PV module businesses; Hoku
Scientific's future financial performance; its business strategies 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 assumes no 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.
CONTACTS for Hoku Scientific:
Tel: 808-682-7800
Email Contact
CONTACTS for Tianwei:
Tel: +86 (28) 67055001
Email Contact
