LDK Lands Huge J-V with Q Cells (LDK)

LDK Solar Co., Ltd. (NYSE: LDK) is seeing some small gains this morning on word that the company has formed a joint venture with Q Cells SE.  The venture will focus on photovoltaic systems and market development in Europe and China.  The joint venture is already in discussions with potential buyers of the first turn-key project in Europe, and is in the planning stages for future projects in China.

The two companies intend to take advantage of value chain optimization and integrated cost reduction.  They also noted that a joint project pipeline is already in place and the first 40MW project has commenced.

LDK and Q Cell’s JV projects will utilize solar wafers from LDK Solar and solar cells from Q-Cells.  The interesting part of the venture is that these will not require additional working capital financing nor will they require other funding from the two companies.  This partnership is also not intended to be exclusive, but will focus on developing specific projects with the shared goal of accelerating the move to grid parity.

Q-Cells is not exactly a small partner even if it is not a listed US company (listed on DAX in Germany).  It says it is the largest manufacturer of solar cells worldwide, with some 2,500 employees and as of 2008 it produced solar cells and thin-film modules with a total output of 574 megawatt peak.  What the end result will be is unknown, but this is a large partnership for the likes of an LDK.  Analysts currently expect annual sales for 2009 of roughly $1.5 billion for LDK.

LDK Solar shares are up 1% at $6.80 pre-market on thin trading volume.  Its 52-week trading range is $3.75 to $52.40.

JON C. OGG