OCI’s polysilicon business mainly depends on customer Longi
The Malaysian polysilicon subsidiary of South Korean chemicals group OCI has signed a three-year supply contract with Longi, the world’s largest maker of monocrystalline solar wafers. OCI will deliver 77,700 metric tons (MT) from March 2021 through February 2024. The agreement seamlessly follows a previous three-year contract closed between the two parties in February 2018.
OCI has been producing solar-grade polysilicon solely in Malaysia since it shut down a capacity of 45,500 MT in South Korea in February 2020. Therefore, Longi’s average annual contract volume of 25,900 MT will fill OCI’s production capacity for the most part: The company increased the capacity in Malaysia from 27,000 MT to 30,000 MT in the third quarter of 2020 and is planning to expand it further to 35,000 MT through debottlenecking by the second half of 2022.
Thanks to increasing polysilicon prices and full utilization of the Malaysian plant in the second half of 2020, the EBITDA margin of OCI’s basic chemicals division strongly increased from -15% in the second quarter to 18% and 17% in the third and fourth quarter, respectively, as the company reported in the presentation of its fourth-quarter results.
- production capacity
- solar grade
- South Korea
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