Expansion Momentum In Wafer Business Boosted
GCL-Poly Energy Holdings Limited has announced that the acquisition of Konca Solar Cell Co., Ltd. ("Konca Solar"), a leading supplier of solar wafers in the PRC has been completed after all conditions precedent under the acquisition agreements have been fulfilled. After the completion of the acquisition, Konca Solar became a subsidiary of the Company.
GCL-Poly announced the proposed acquisition of a controlling stake of 70.19% in Konca Solar on 8 January 2010, at a consideration of RMB$854 million, which will be settled by cash. The completion of the acquisition of the equity interest as mentioned above is subject to the requirements of the Listing Rules regarding major transactions, and approval from the relevant PRC government authorities.
Established in Wuxi, Jiangsu Province in July 2005, Konca Solar principally engages in the research and development, production and sales of monocrystalline and multicrystalline ingots and wafers. Since its establishment, Konca Solar has enjoyed stable growth and is a highly-regarded industry leader in terms of technology, quality and cost control measures. As of the end of 2009, Konca Solar has an annual production capacity of 300MW.
The acquisition of Konca Solar is an important initiative under the Group's wafer expansion strategy. The acquisition allows the Group to expedite the expansion of its wafer business, effectively ramp up its wafer production capacity and enhance its competitiveness.
The construction of the wafer production facilities of the Group has been progressing well. The operation at Xuzhou Phase One 500MW Project and its products are already among the best in China after the production facilities commenced operation in February 2010, and the facilities is expected to be fully ramped up by the end of June 2010. Meanwhile, the business momentum at Konca Solar year-to-date has been encouraging, and the Group is planning to significantly expand its production capacity after the completion of the acquisition. The Group also commenced the construction of wafer production facilities at other locations such as Changzhou, Jiangsu Province. The Group's wafer production facilities are close to polysilicon production in the upstream and cell and module customers in the downstream, and the Group's co-location strategy has been roughly in place.
The Group's annual wafer production capacity is expected to reach 2GW by the end of 2010, and the expected wafer production volume will exceed 1GW in 2010. The Group expects that the wafer business will become a major revenue and profit contributor in the near future.
