Q-Cells in new silicon supply contract, raises outlook

Bitterfeld-Wolfen, Germany-based Q-Cells announced today that it secured a contract for 3,410 tons of solar grade silicon and raised its sales outlook for this year and for 2009.

The solar cell maker also expanded its production plans on the new supply deal.

Q-Cells said Canada's Bécancour Silicon, a subsidiary of Timminco (TSX: TIM), would supply 410 tons of silicon this year and 3,000 tons in 2009 at fixed prices, with deliveries to begin immediately.

The companies said they would negotiate a further contract covering 6,000 tons of silicon per year between 2010 and 2013.

In February, Q-Cells said it surpassed Sharp (OTC: SHCAY) as the world's largest manufacturer of solar cells for 2007 (see Q-Cells to expand with factory in Malaysia).

Q-Cells said today it expected its sales to rise to $2.01 billion this year, up from a previous target of $1.9 billion.

The company also upped its forecast for 2009, to $3.1 billion up from $2.7 billion.

Because of the new silicon supply, the company said it now plans to produce wafers at its Malaysian plant, to be constructed this year.

In addition, Q-Cells said it would start manufacturing silicon ingots at a test plant in Germany, eventually setting up ingot production in Malaysia.

The company is also boosting its thin-film business and expanding into the development of large-scale solar facilities.

Q-Cells said its Sontor thin-film unit would extend its production capacity for micromorph thin-film solar modules to 85 MW, up from the planned 25 MW at Sontor's first factory, still under construction in Bitterfeld-Wolfen.

For large-scale facilities, Q-Cells said it would operate as a developer of ground-mounted and roof top solar power plants, making use of thin-film modules produced by its subsidiaries.

An initial project in Saxony-Anhalt is already being implemented, according to Q-Cells.