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Sep. 19, 2006
Sumitomo Corporation

Sumitomo and REC Scanwafer Sign Long-Term Large-Scale Sales Agreement for Silicon Wafers for Solar Energy

Sumitomo Corporation (Chuo-ku, Tokyo, President and CEO: Motoyuki Oka) entered into a long-term sales agreement for multicrystalline silicon wafers with REC Scanwafer AS (Glomfjord, Norway), the world's largest manufacturer of multicrystalline silicon wafers for solar energy, for which Sumitomo holds a distributorship. The agreement is effective for six years from 2007, and the contract value is worth about 60 billion yen. The wafers will be sold to Sharp Corporation, the Japanese manufacturer with a top share in the global solar cell market. REC Scanwafer AS is a wholly-owned subsidiary of Renewable Energy Corporation (REC) (Hovik, Norway, CEO: Erik Thorsen) in which Sumitomo also has a stake.

REC holds the world largest vertically integrated value chain in solar energy industry, and to further increase supply capacity, began to make a large investment in the production facility of REC Scanwafer AS in the fourth quarter, and started to expand its polysilicon production capacity in the US in August this year. REC was also listed on the Oslo Stock Exchange in May this year, representing the world's largest listing in the field of renewable energy so far this year.

Solar energy industry has been growing at a rate of more than 30% annually for the past three or four years, particularly in Japan and Germany, driven by factors such as mounting global concern about the environment, and the short supply and soaring prices of fossil fuels. The demand for solar energy is expected to increase sharply in other European countries, as well as in California and other US states--where the introduction of solar energy has been slow. Since a similar movement can also be seen in developing countries, such as China and India, it is clear that the diffusion of clean solar energy is now a global trend.

However, the sharp increase in demand has also caused a shortage of materials such as polysilicon, and the industry is currently seeking a way to secure a stable long-term supply of these resources. The agreement signed by Sumitomo and REC Scanwafer AS is significant as it is expected to contribute to the ongoing development of solar energy industry by securing a stable supply of materials. Sumitomo has been expanding its solar material business since it obtained exclusive distributorship in Asia from REC in 2003, and then investing in the company in 2004. Through this long-term agreement, as well as various other projects, Sumitomo continues to be actively involved in the diffusion of solar energy.

 

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