South Korea’s OCI Co., a producer of polycrystalline silicon, hydrogen peroxide, said its Malaysian operation has entered 10-year contract to supply polysilicon, a key raw material in the solar photovoltaic (PV) supply chain, to Hanwha Solutions.

Hanwha plans to use the supplies mostly for production of low-carbon solar photovoltaic (PV) modules in the North American European markets.

According to OCI on Thursday, its affiliate in Malaysia, OCIMSB, signed a memorandum of understanding to supply polysilicon for ten years from July 2024 to June 2034. The deal size is likely to be $1.2 billion, around 45 percent of OCI’s consolidated sales as of last year.

OCIMSB produces 35,000 tons of low-carbon polysilicon for low-carbon solar panels per year. It uses eco-friendly hydroelectric power in the production process unlike Chinese rivals using coal power and has greater chance in the European and North American markets with low-carbon regulations.

The company plans to increase production capacity from the current 30,000 tons to 35,000 tons by the end of June. “To meet the rising demand for our high-purity polysilicon, we’ll increase our presence in the solar panel market, which is growing fast, said the company’s vice chairman Lee Woo-hyun.

According to its earnings report for the first quarter, Its operating profit rose 244.6 percent year on to 162 billion won, while sales added 75.4 percent to 1 trillion won. Its shares were up 7.29 percent to 104,500 won midday Friday.

By Park Yun-gu and Jenny Lee

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