OCI Signs Long-term Polysilicon Supply Contract Worth 930 Billion KRW with Chinese Company

World's No.1 Solar Wafer Company LONGi Solar Signs Contract

[Asia Economy Reporter Hwang Yoon-joo] Energy and chemical company OCI is strengthening its position once again as a global player in the polysilicon sector through a large-scale long-term polysilicon supply contract.

OCI’s Malaysian subsidiary, OCIM Sdn.Bbn. (OCIMSB), announced on the 8th that it will supply polysilicon worth $845.5 million (approximately 930 billion KRW) over three years until February 2024 to China’s LONGi Green Energy Technology Co., Ltd. (LONGi Solar). This amount corresponds to about 35% of OCI’s consolidated sales in 2019. LONGi Solar, a major customer of OCIMSB, is the world’s number one company in the solar wafer sector, manufacturing high-efficiency mono wafers and modules.

This contract is significant as it is the first large-scale new polysilicon contract in three years since 2018. In particular, China installed 48GW of solar power in 2020, increasing demand for high-efficiency solar cells, and this contract was secured by recognizing OCIMSB’s supply capacity of polysilicon for high-efficiency mono wafers. Through this, OCIMSB has secured a stable sales channel for solar polysilicon totaling 35,000 tons, including the current annual production of 30,000 tons at its Malaysian plant and an additional 5,000 tons to be expanded by next year.

The global solar market is expected to continue growing steadily due to countries’ carbon neutrality declarations and the increased interest and support policies for renewable energy from the recently inaugurated Biden administration in the United States. BNEF (Bloomberg New Energy Finance), a specialized renewable energy research institute, analyzed that 130GW of new solar power was installed worldwide in 2020 and estimated that the global new solar installation scale this year will exceed 151GW, continuing a robust growth rate of over 15%.

OCI is focusing on strengthening business capabilities and improving production efficiency in line with the growth of the renewable energy industry. Recently, OCI announced plans to expand the production capacity of its Malaysian solar polysilicon plant, OCIMSB, from 30,000 tons to 35,000 tons by the second half of 2022 through production process improvements (Debottlenecking). It is also concentrating on improving equipment utilization and reducing investment costs by partially utilizing idle facilities in Gunsan. The manufacturing cost of solar polysilicon is expected to decrease by about 15% compared to the 2020 average.