Hoku amends supply deal with Chinese customer 

Hoku Scientific, a Hawaii-based solar materials firm building a polysilicon plant in Pocatello, has amended a supply agreement with one of its Chinese customers.

The deal, announced in late November, would reduce by one year the term of the sales agreement with Jiangxi Jinko Solar Co. Ltd. and delay its first shipment of polysilicon from December 2009 to December 2010.

Company officials said in a news release that the adjusted timeline takes into account financing-related delays at the $390 million facility, as well as “the realities of the polysilicon market,” which is experiencing steep price declines amid a global oversupply.

“Jinko maintains its long-term pricing hedge and supply stability, and Hoku will enjoy some additional flexibility during our first year of production, the year in which our production cost per kilogram of polysilicon is expected to be the highest,” stated Hoku CEO Dustin Shindo.

Hoku has struggled in the past year to overcome a funding shortfall that slowed construction at the plant, which is slated for a full capacity of 4,000 metric tons per year.

In September the company announced a deal with another Chinese customer, Tianwei New Energy Holdings Company, for $50 million in debt financing. In exchange, Hoku would forego $50 million in secured polysilicon prepayments from Tianwei and sell the company a 60 percent majority stake.

Following another deal struck earlier this fall with general contractor J.H. Kelly, which had filed a lien to recover $12 million in past-due payments, Hoku ramped up construction for a tentative build-out by the first quarter of calendar 2010.

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