Silex acquires solar manufacturing facility at Sydney Olympic Park

SYDNEY, AUSTRALIA: Silex Systems Ltd (Silex) is pleased to announce the conditional acquisition of all the manufacturing assets and equipment of the Sydney Olympic Park (SOP) Solar manufacturing facility. This follows the signing of a Heads of Agreement with BP Solar Pty Ltd, who operated the facility until the end of March 2009.

In a separate arrangement, Silex has also signed a conditional lease for the building which houses the SOP Plant, meaning that once the transactions are completed, the manufacturing facility including infrastructure and services will be secured relatively intact. It is expected that both transactions will be completed before the end of June 2009.

Subject to this, Silex anticipates that new manufacturing operations will involve a progressive roll-out of advanced technology and innovations, potentially including novel materials being developed by Silex’s Silicon Valley subsidiary Translucent Inc.

“This is a unique opportunity for Silex to kick-start its commercial solar operations” Dr Michael Goldsworthy, Silex CEO said. “More importantly, it opens the door for Silex to begin implementing some potentially exciting technical innovations aimed at higher efficiency solar cells. While the SOP Plant provides a solid platform for the production of high quality silicon solar cells, our aim is to ultimately become a leader in the Solar industry through technology innovation” he added.

The SOP Plant is the largest solar manufacturing facility in the Southern Hemisphere, with over 50MW of solar cell production and 10MW of module production annually under previous BP Solar operations. It is estimated that the future capacity of the plant could potentially be expanded to 200MW, and possibly more with improvements in solar cell efficiencies. Initially, the plant will operate at a much reduced capacity of 10MW ~ 15MW in 2010CY, ramping up to full capacity by 2012 to 2015CY, depending on market demand.

The time to market with product from the SOP Plant, regardless of cell technology, is dictated by the product qualification process, which is expected to take approximately six months to complete. This is a mandatory process for any manufacturer in the solar industry.

During this period -– planned to commence in July 2009 following finalization of the abovementioned transactions -- Silex Solar will undertake maintenance and recommissioning activities, and produce the product samples needed for qualification testing later in the year.

The existing manufacturing equipment and facility is in good condition, although we have budgeted up to A$0.5 million in costs associated with the re-commissioning effort over the remainder of 2009. A team of ~20 engineers and technicians is currently being assembled to undertake this effort. If all goes to plan (noting that delays are possible), Silex Solar will aim to generate its first sales in Q1 2010 CY.

“We believe this is a very opportune time to be gearing up for a new solar manufacturing enterprise” Dr Goldsworthy said. “With the current economic downturn, the global solar industry is taking a ‘breather’ -– with forecast growth this year around 10 percent instead of the 30 percent+ per annum growth seen for the five years to the end of 2008. Despite this, strong growth continues in the local Australian market with the increasing support of State and Federal initiatives.

"Looking forward, stronger growth is expected to return to the global market once economic conditions improve. An important factor going forward is the global swing towards renewable energy sources such as solar, supported by strong government policy initiatives around the world, and ever decreasing solar power costs as solar technology improves. With its strong focus on technology innovation, Silex Solar
will be in good position to take advantage of these positive market factors over the next decade” he explained.