Hoku, Sanyo extend polysilicon supply contract

Kapolei, Hawaii-based Hoku Scientific (Nasdaq: HOKU) said today its Hoku Materials unit extended an agreement to supply polysilicon for the solar market to Moriguchi, Japan's Sanyo Electric (OTC: SANYY).

Hoku said it expects to receive up to $530 million under the new 10-year contract, a boost from the $371 million it was set to get under the original seven year agreement.

"Our continuing commitment of capital to the design and engineering of our plant, and to the purchase of long lead-time items such as the reactors, has enabled us to stay on schedule for first commercial product deliveries in the first half of 2009," said Dustin Shindo, CEO of Hoku.

"This amendment provides us with added cushion in our construction and ramp up schedule, which improves the certainty and progress of the overall project."

Hoku said today's deal also extends to May 31 the date on which either party may terminate the supply agreement if Hoku is unable to complete the financing for its polysilicon production plant.

Last year, Hoku Scientific contracted the Shaw Group (NYSE: SGR) to build the planned facility in Pocatello, Idaho (see Shaw to build Hoku polysilicon plant).

The $260 million project is expected to handle 2,000 metric tons per year. The Hoku plant is scheduled to be fully operational in 2009.

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