OCI of Korea Purchases U.S. Solar Developer CornerStone Power
Stock Chart for OCI Co Ltd (010060)
OCI Co., a South Korean provider of polysilicon for solar cells, acquired a Chicago-based power developer to increase sales in the growing North American renewable energy market.
OCI’s Atlanta-based OCI Enterprises announced today the purchase of CornerStone Power Development LLC without disclosing a price.
This is at least the third time in two months that an Asian provider of solar products has purchased a U.S. energy project developer. The Chinese panel maker LDK Solar Co. agreed this month to pay $33 million for 70 percent of Solar Power Inc. In November, Sharp Corp., Japan’s biggest solar panel maker, paid $305 million for San Francisco-based Recurrent Energy.
“This acquisition fits with our strategy in North America to diversify into the most promising emerging solar market in the world, where we expect solar capacity to grow fivefold over the next several years,” Kirk Milling, OCI Enterprises’ president and chief executive officer, said in a statement.
LDK and Sharp both make solar panels, which they can sell to their in-house project developers for North American energy plants.
OCI, of Seoul, makes polysilicon that other companies use to make solar cells that are assembled into panels. OCI also sells a variety of chemicals for other industries.
Nathaniel Bullard, lead North American solar analyst with Bloomberg New Energy Finance, compared the OCI deal to the 2009 purchase of developer SunEdison LLC by silicon maker MEMC Electronic Materials Inc. "As with MEMC, OCI is jumping all the way down the value chain to acquire a projects channel, and should also be expected to provide capital foremost, and equipment only later on," he said in an e-mailed statement.
OCI Enterprises will retain CornerStone’s management and the developer will become OCI Solar Power, a unit of OCI’s newly formed energy division.
Anne O’Neill, an OCI spokeswoman, said renewable energy is an “area they want to grow over time,” though no other acquisitions are planned.
CornerStone focuses on ground- and roof-mounted projects as large as 20 megawatts in capacity. It currently has 12 projects totaling 130 megawatts under development in Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, and Ontario, Canada, according to its website.
OCI Solar is expected to have 700 megawatts under development by 2013, O’Neill said.
OCI said in December it would invest 1.9 trillion won ($1.7 billion) to build its fourth polysilicon plant and increase annual output to 62,000 tons from 17,000 tons by 2012.
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