Hoku Scientific to expand into solar
By Sean Hao
Advertiser Staff Writer
Hoku Scientific Inc., the Kapolei-based maker of fuel cells, yesterday said it plans to raise $250 million to fund a foray into solar energy technology.
However, the expansion will not occur here. It more than likely will take place in Singapore, where it is cheaper to do business and which offers better incentives than Hawai'i, according to Hoku.
"It's very positive for Hawai'i even though it's not going to be manufactured here," said Mike Fitzgerald, president and chief executive of Enterprise Honolulu, an economic development agency. "It solidifies them as a worldwide, global company that's based in Hawai'i."
The solar power market is a logical expansion into other clean energy technologies, said Dustin Shindo, president and chief executive of Hoku. The company, which has about 20 employees, currently makes membranes used in fuel cells for home and automotive markets.
"While the market for fuel cell products is still emerging, the solar market is already a rapidly growing industry," Shindo said in a news release.
Hoku said it plans to manufacture photovoltaic modules, the basic element of a photovoltaic system, which converts sunshine into electricity. Hoku also will manufacture polysilicon, one of the key materials used in the production of photovoltaic, or solar, modules.
"With our plans to enter the solar and polysilicon markets, Hoku Scientific is positioning itself to become a world leader in diversified clean energy technologies," Shindo said in a statement.
THREE BUSINESS UNITS
Hoku, which went public on Aug. 5, 2005, plans to finance the expansion by borrowing money and possibly using cash down payments by customers. The $250 million price tag for the expansion is nearly three times the current market value of Hoku.
The company said it plans to create three business units:
The plan calls for Hoku Solar to begin making photovoltaic modules beginning in the second half of 2007 with initial manufacturing capacity of 30 megawatts per year.
MAKING KEY MATERIAL
Hoku Materials is expected to begin production of polysilicon in the second half of 2008, initially producing up to 1,500 metric tons of polysilicon per year, the company said.
"One of the primary limits to the growth of the solar market is supply constraints of polysilicon, the key material used in solar modules and integrated circuits," Shindo said. "To address these supply constraints, we also plan to manufacture sufficient quantities of polysilicon to meet our initial and future expected demand."
"Hoku will explore basing these manufacturing operations in Singapore," the company said in a news release.
Hoku Fuel Cells will remain in Kapolei. That business has benefited from $240,000 in state research tax credits during the nine months ended Dec. 31, 2005. That was on top of $193,000 in credits claimed during the prior-year period, according to a filing with the Securities and Exchange Commission.
Shares of Hoku closed down 25 cents, or 4.6 percent, at $5.20 on the Nasdaq National Market yesterday. Hoku's announcement was made after the markets closed.
Reach Sean Hao at shao@honoluluadvertiser.com.
