March 20 (Bloomberg) -- Yingli Green Energy Holding Co., the world’s biggest solar panel maker by shipments, agreed to buy raw materials from GCL-Poly Energy Holdings Ltd. as part of a three-year accord.
Baoding, China-based Yingli will purchase polysilicon and solar wafers from GCL-Poly to meet future expansion needs and get cheaper prices for bulk orders, the two companies said today in a joint statement in Beijing. GCL-Poly will use Yingli’s products for its solar farms as part of the accord.
The agreement between the world’s two largest solar-component producers comes as an industry surplus and slowing demand depress profits and gut margins. The average spot price of polysilicon has increased 11 percent this year, while wafer prices are up 6 percent, according to data compiled by Bloomberg.
“It’s an initial accord to explore cooperations,” Wang Yiyu, Yingli’s chief strategy officer, said in Beijing. “We hope to take advantage of GCL-Poly’s wafer production and our panels to team up and to co-develop downstream power plants in the future.”
Yingli expects panel sales to be 3.2 gigawatts to 3.3 gigawatts this year, up about 40 percent from a year earlier, according to the statement.
GCL-Poly plans to invest in solar power plants in the U.S. and South Africa this year, Sean Tzou, the company’s chief operating officer, said in Beijing today.
To contact the editor responsible for this story: Reed Landberg at email@example.com