SunSi Energies, Inc. (OTC-BB: SSIE) is a development-stage company focused on acquiring trichlorosilane (TCS) production facilities and production rights in China. TCS is a key raw ingredient used in most photovoltaic solar modules on the market. As an aspiring provider, the Company’s goal is to become the only publicly traded pure play and offers investors exposure to the top of the solar value chain.
SunSi Exploits the Top of the Solar Value Chain
Trichlorosilane (TCS) (SiHCl3) is a chemical compound containing silicon, hydrogen and chlorine that decomposes at high temperatures to produce silicon. As a result, purified trichlorosilane is the primary source of ultrapure silicon in the semiconductor and solar industries. The commodity is produced by blowing hydrogen chloride through a bed of silicon powder at 300 degrees Celsius.
Since polysilicon is the primary component in solar cells and wafers, TCS stands at the very beginning of the solar value chain. And as most commodities companies can testify, the supplier of raw materials can often command the greatest pricing power and margins in the industry. As a result, investors may want to pay attention to SunSi Energies as it works to dominate this industry.
The company is currently in the process of acquiring worldwide distribution rights to a key TCS production facility in China (Zibo Baokai Commerce and Trade Co., Ltd.), and is in the process of completing its due diligence for acquiring 60% of a state-of-the-art facility in China (Wendeng He Xie Silicon Co., Ltd.). Once successful, these acquisitions will effectively control 45,000 metric tons of production, becoming one of the largest TCS suppliers in China and the only pure-play TCS stock in the world.
Solar Industry Continues to Grow with China’s Boost
China has been one of the leading suppliers of solar technologies around the world after having positioned itself as a key producer of solar equipment years ago. Despite this rapid growth, the country has been largely ignoring its enormous domestic market in order to meet foreign demand, but that may be changing with declining unit costs and government initiatives to support a solar build-out.
The market for solar technology is also rapidly expanding outside of China, according to many industry sources. The global solar industry has grown more than 849% since 2000, from an installed capacity of 877MW in 2000 to more than 10,000MW at the end of 2008, representing an annual growth rate (CAGR) of almost 40% at a time when many industries were experiencing a slowdown.
Conclusion
SunSi Energies, Inc. (OTC-BB: SSIE) is positioning itself to capitalize on growing solar demand by increasing its TCS capacity to 125,000 metric tons annually within three years, making it one of the largest TCS producers in China’s emerging market. Being at the bottom of the supply chain, the firm stands to enjoy high and steady margins that could create enormous value for shareholders over the long-term.