OCI, an energy and chemicals company, has strengthened its position as a representative business player in the global polysilicon market with a large-scale, long-term polysilicon supply contract.

 

OCI’s Malaysian subsidiary,  OCIM Sdn. Bbn. (OCIMSB) announced on February 8 that it will supply polysilicon worth USD 845.5 million (KRW 930 billion) to LONGi Green Energy Technology Co., Ltd. of China (LONGi Solar) for three years until February 2024. This accounts for about 35% of its sales on a consolidated basis in 2019. LONGi Solar, one of the major customers of OCIMSB, is the world’s leading manufacturer of high-efficiency monocrystalline wafers and modules for the photovoltaic applications.

 

The contract is significant in that it is a large-scale deal for polysilicon supply concluded in three years after 2018.  With 48 GW of new solar PV installed in China in 2020, the demand for high-efficiency solar PV energy is soaring, and this contract demonstrates OCIMSB’s ability to supply polysilicon for high-efficiency monocrystalline wafers. With this deal, OCIMSB secured solid demand for 35,000 mt/yr of polysilicon by adding 5,000 mt/yr of capacity by next year from its plants in Malaysia.

 

Meanwhile, the global solar PV market is projected to continue its expansion amid growing interest in and support policies for renewable energy, such as the declarations of carbon neutrality of countries and the inauguration of the Biden administration in the US. The renewable energy research institute Bloomberg New Energy Finance (BNEF) estimated that 130 GW of new solar PV capacity was added worldwide in 2020 and projected that more than 151 GW of photovoltaic capacity will be added this year, leading to a solid growth rate of more than 15%.

 

OCI is focusing on strengthening its business capability and production efficiency in line with the increasing importance of the renewable energy industry. Recently, OCI announced that it will expand the production capacity of OCIMSB, a polysilicon plant for solar PV in Malaysia, from the current 30,000 mt/yr to 35,000 mt/yr by the second half of 2022, through debottlenecking. The company is going to boost the efficiency of production facilities and reduce investment costs by utilizing part of idle facilities in Gunsan. With this, OCI is expected to cut the manufacturing cost of polysilicon by about 15% compared with the average level of 2020.

 

OCI CEO Kim Teak-Joung said, “With the resurgence of the global photovoltaic market, demand for high-purity polysilicon from OCIMSB is on the rise,” adding that “With this contract as a springboard, we will respond to the growing global photovoltaic market by securing various customers.”