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Suntech Acquires Minority Stake in Shunda

May 29, 2008
Source: New Energy Finance

Chinese solar cell and module manufacturer Suntech has acquired a minority stake in wafer maker Shunda for USD 98.9m.

The exact stake was undisclosed, but was purchase was made from UK-based private equity investor Actis Capital and Hong Kong investment fund Waichun. Actis and Goldman Sachs were disclosed as two of many investors which took a USD 100m stake in Shunda in March 2007.

The purchase of a stake in Shunda by Suntech, one of its main clients, differs in strategy from other Chinese solar PV players, such as Baoding Yingli and Canadian Solar, which are moving or planning on moving upstream by building their own polysilicon and wafer capacity.

Additionally, Suntech and a subsidiary of Shunda signed a 13-year silicon wafer supply agreement for specified annual volumes of 7GW worth of silicon wafers covering a period from 2008 to 2020.

'With this long-term agreement, we are able to increase our silicon secured for 2009 by 50MW to 800MW of silicon with an average cost more than 20% below our average cost of silicon in 2007," said Suntech CEO Zhengrong Shi.

Shunda's 1,500-tonne multicrystaline silicon factory is expected to come online in August 2008. The company plans to eventually develop 5,000 tonnes of high-purity silicon production capacity, the first phase of which will consist of a capacity expansion to 3,000 tonnes at a cost of CNY 1.6bn (USD 230m).