SOURCE: Hoku Scientific, Inc.

January 22, 2007 05:30 ET

Hoku Signs Contract for Polysilicon Reactors

KAPOLEI, HI -- (MARKET WIRE) -- January 22, 2007 --Hoku Materials, a division of Hoku Scientific, Inc. (NASDAQ: HOKU) established to manufacture polysilicon for the solar market, today announced the signing of a definitive contract with Graeber Engineering Consultants GmbH, and MSA Apparatus Construction for Chemical Equipment Ltd., for the purchase and sale of hydrogen reduction reactors and hydrogenation reactors used in the production of polysilicon, and related engineering and installation services. Under the contract, Hoku will pay Graeber and MSA up to a total of approximately 21 million Euros for equipment to produce up to 2,000 metric tons of polysilicon per year. Hoku is obligated to pay Graeber and MSA a 15% initial deposit within six months after signing the contract. Delivery of equipment capable of producing 1,500 metric tons per year is scheduled to occur within 15 months after Hoku pays the initial 15% deposit, with the balance of the equipment scheduled for delivery within three months thereafter.

"We conducted an extensive search throughout the world for an experienced provider of polysilicon reactors," said Dustin Shindo, Chief Executive Officer of Hoku Scientific. "We are extremely impressed with Graeber and MSA's reputation in the polysilicon industry, and are confident in their ability to execute."

Heinz Graeber, Chief Executive Officer of Graeber, said, "We have been approached by dozens of companies wanting to either expand or get into the space and can only work with the best of them. Hoku's approach and team made them an easy choice for us."

Last week Hoku announced a $370 million seven-year polysilicon supply agreement with Sanyo with shipments planned to begin in January 2009. Hoku is working with CH2M Hill Lockwood Greene to build the polysilicon plant in Pocatello, Idaho, which Hoku anticipates will cost approximately $260 million to complete, including the payments to Graeber and MSA. Hoku plans to fund the construction costs through customer pre-payments and approximately $130 million in debt capital.

About Hoku Scientific, Inc.

Hoku Scientific (NASDAQ: HOKU) is a clean energy technologies company that develops and manufactures fuel cell membranes and membrane electrode assemblies for stationary (including residential and back-up power applications) and automotive proton exchange membrane fuel cells. The Company is currently planning to expand its business to manufacture solar modules and polysilicon for the solar market. For more information visit www.hokuscientific.com.

Forward-Looking Statements

This press release contains forward-looking statements that involve many risks and uncertainties. These statements relate to Hoku Scientific's ability to successfully derive revenues from the sale of polysilicon to Sanyo; its ability to successfully raise sufficient funds to build polysilicon manufacturing facilities; its ability to engineer and construct a production plant for polysilicon; the Company's relationships with Sanyo, Graeber, MSA and other contracting parties; its ability to manufacture polysilicon; its ability to meet the delivery schedule and quality requirements in its agreement with Sanyo; Graeber and MSA's ability to meet the delivery schedules in their agreement with the Company; the Company's ability to license any necessary intellectual property rights to enter the polysilicon business; the quality of polysilicon to be manufactured by the Company; Hoku Scientific's costs to manufacture polysilicon, and its ability to offer pricing that is competitive with competing products; Hoku Scientific's future financial performance; Hoku Scientific's business strategy and plans; and objectives of management for future operations. In some cases, you can identify forward-looking statements by terms such as "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "will," "would" and similar expressions intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause Hoku Scientific's actual results, performance, time frames or achievements to be materially different from any future results, performance, time frames or achievements expressed or implied by the forward-looking statements. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. In evaluating these statements, you should specifically consider the risks described in Hoku Scientific's filings with the Securities and Exchange Commission. Except as required by law, Hoku Scientific assumes no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Hoku, Hoku Materials, and the Hoku Scientific logo are trademarks of Hoku Scientific, Inc., all rights reserved.

Contact Information

  • CONTACTS For Hoku Scientific:
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    Hoku Scientific
    Tel: 808-682-7800
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