sunsi executive summary december 2011
TRANSCRIPT
COMPANY OVERVIEWDecember 2011
45 Main Street, Suite 309Brooklyn, New York, 11201Tel: [email protected]
About SunSi Energies:
SunSi Energies’ goal is to acquire and develop a portfolio of high quality Trichlorosilane (TCS) producing facilities that are strategically located and possess a potential for future growth and expansion. Relatively unknown, but essential to the solar industry, TCS is its main feedstock due to its use in the production of polysilicon (a component of solar panels). The solar photovoltaic value chain (diagram shown below) consists of a specific and distinct number of steps, from the TCS production (first step in the value chain) to the solar systems (last step in the value chain).
TCS producers and polysilicon manufacturers tend to achieve the highest profit, followed by the ingots and wafers. In other words, SunSi is entering the solar market at the perfect place. It is believed that SunSi is the first and only "pure play" public company in the world honed on the production of TCS.
The Story:
SunSi Energies owns 100% of a Hong Kong-based company, SunSi Energies Hong Kong Inc. (SunSi HK), through which SunSi Energies has acquired a Chinese TCS production facility and a TCS distribution company.
On December 9th, 2010, SunSi HK completed the acquisition of 90 % of Zibo Baokai Commerce and Trade Co. (“Baokai”), a distribution company. With this acquisition, SunSi gained the exclusive access to distribute 25,000 MT of TCS produced by the Zibo Baoyun Chemical Plant (“ZBC”) located in Zibo China for both the local Chinese and the international markets. Additionally, this acquisition enabled SunSi to emerge from a development stage into an operating company during the quarter ended February 28, 2011 and create a presence within the Chinese TCS markets.
On March 18th 2011, SunSi HK completed the acquisition of 60% of Wendeng He Xie Silicon Co. Ltd (“Wendeng”) located in Weihai City. All of the management and employees of Wendeng were retained. Under the terms of this agreement, SunSi acquired 60% equity interest in Wendeng. Under the terms of the agreement, SunSi paid the sole shareholder of Wendeng $455,000 in addition to the issuance of 1,349,628 redeemable common shares of SunSi. As part of the transaction, an existing shareholder of SunSi contributed 1,574,566 shares of SunSi common stock to the Wendeng shareholder. Currently Wendeng's nameplate capacity is at 30,000 metric tons (MT) since we recently completed the expansion of an additional 10,000 MT.
In early June 2011, SunSi paid the $455,000 to the shareholder of Wendeng. Additionally, on June 15, 2011 this shareholder elected to waive his right to redeem 1,349,628 shares for approximately $2.7
million and instead chose to retain those shares. As a result the Company has completed all of its acquisition payments due to the shareholder of Wendeng.
Minor preliminary construction of a second expansion commenced at the facility in July 2011, however approximately $15.0 million in additional capital is necessary to complete the expansion. The Company’s contribution toward this expansion is expected to be $9.0 million, with approximately $5.0-$6.0 million contributed by Wendeng’s 40% minority partner. The total expansion which will increase Wendeng's capacity to 75,000 MT is expected to be completed approximately six months after the Company successfully raises approximately $5.0 million of the initial tranche of capital. Additionally, the current executive management team of Wendeng will provide its technical expertise for the construction, training and operation of the facility and its expansion.
SunSi Energies is in the process of evaluating additional acquisition opportunities in China as it foresees a growth, both in geographic terms and TCS demand. Our objective is to acquire TCS facilities through expansion and/or acquisition that will have a combined total capacity of over 140,000 MT/year within the next three years. In view of its expansion plan, SunSi has already identified North America and Europe as high potential markets for its TCS. Countries, such as Germany and Spain, have led the demand for solar PV in recent years, while the United States is expected to experience a significant growth in the renewable energy and solar markets. Moreover, SunSi expects to become a key supplier to the emerging Chinese and Asian polysilicon and solar energy markets.
SunSi Energies Inc. is trading on the OTCQB under the ticker "SSIE".
We recently applied for an up listing to the NASDAQ Capital Market and are progressing through their qualification process. As of November 18, 2011, we have a total of 486 shareholders. As of August 31, 2011 we had $7.7 million in shareholders’ equity.
2011 and Recent Highlights
Closed its first acquisition of 90% of a TCS distribution company, Baokai, in December 2010.
Closed its second transaction with the acquisition of a 60% equity interest in a TCS manufacturing company, Wendeng, in March 2011.
In 3Q11, emerged from development stage status to an operating entity.
In 4Q11, began generating significant revenues and recorded the first profitable quarter in Company history.
In June 2011 the Company fulfilled its payment obligation to Wendeng when $2.7 million in redeemable SunSi common stock was converted to equity.
Shipped first TCS order outside of China to Nitol Solar(Russia).
Initiated the up-listing process to NASDAQ
Completed Due Diligence on potential acquisition of a 20,000 MT facility
The Opportunity
SunSi Energies is in the process of increasing capacity at the Wendeng facility. In order to accomplish these objectives, the Company is seeking to raise an amount of $ 9,000,000 USD, which will be used as follows:
Expand capacity by 45,000 MT of TCS $ 8,000,000
Estimated commission and expenses $ 1,000,000
Main Trichlorosilane Customers:
Historically, we have sold our TCS to some of the largest polysilicon companies in the world and other significant Tier II polysilicon companies. Due to the nature of the nature of the industry the amount of TCS we supply to these entities varies from quarter to quarter based upon market demand. The fact that our TCS from both Baokai and Wendeng meets these entities high quality standards is indicative of our capabilities
Baokai has supplied TCS to:
1. Luo Yang Zhong Silicon Hi-tech Technology Development Co. Ltd.
2. Jiangsu Zhong Neng Silicon Industry Technology Development Co. Ltd.
3. LDK Solar
Wendeng has supplied TCS to:
1. Luo Yang Zhong Silicon Hi-tech Technology Development Co. Ltd.
GCL Silicon Technology Holdings Inc. - www.gclsolarenergy.com
2. Wuxi Zhong Cai Technology Co. Ltd.
3. Lian Yu Gang Zhong Cai Technology Co. Ltd.
4. Zhe Jian Xie Cheng
5. Wendeng Huahai Chemical Co. Ltd.
Competition:
We believe that there are approximately 25 TCS producers, whose capacities are comparatively small, as fewer than 10 have a production capacity of over 2,000 MT per year. As a result of the recent oversupply of polysilicon and the reduction of TSC pricing to historically low levels, that many of these companies will be put out of business
Today the number of TCS producers has grown to over 20, holding a combined production capacity exceeding 145,000 MT per year. China’s TCS producers are mainly located in Jiangxi, Tangshan of Hebei, Zibo of Shandong, Chongqing of Sichuan, Wuhan of Hubei, and Shanghai.
Our Executive Team:
North America:
The U.S. team has a significant international experience in operating businesses across national boundaries. Each member possesses a wealth of experience dealing with listed public companies and asset management. It is a team endowed with a solid leadership that shares a common vision for the business, as well as envisions a strong growth and rapid expansion into China and beyond.
U.S. Team Members and Board Members:
Richard St-Julien, Chairman & Chief Legal Officer, Member of the Board of DirectorsDavid Natan, Chief Executive Officer, Member of the Board of Directors.
Jason Williams, Chief Financial OfficerYifeng Song, Vice-President of Global DevelopmentKebir Ratnani, Member of the Board of DirectorsDavid Vanderhorst, Member of the Board of DirectorsAdrian Auman, Member of the Board of Directors
Chinese Management Team at Wendeng:
Wendeng benefits from the experience and technology expertise of Zhang Fahe. Mr. Zhang brings over 30 years of experience in the Chinese chemical industry, 10 of which honed on working with TCS. During that time, he has directly contributed to the development of advanced TCS production technologies by optimizing key technological processes. He has designed various TCS facilities, including the Wendeng facility.
Chinese Management Team at Baokai and ZBC:
The production facility management team in China is led by Mr. Yihua Song. This team holds a combined work history of over 30 years with the organization. Stability and future growth are ensured by keeping this knowledgeable and experienced team in place to manage the day-to-day operations.
Conclusion:
SunSi Energies is in the position of being able to capitalize now, before the recovery, on one of the fastest growing markets in the world – alternative energy. Another exciting angle for investors is the fact that SunSi is the only publicly listed company in the USA that allows for a “pure play” in the TCS sector. Other companies producing Trichlorosilane are either private companies or, if they are a public company, their TCS production component is very small.
We offer a unique opportunity to become involved with a company that already holds value, has a strong management team, is generating revenues and has a solid plan for significant future expansion both through acquisition and organic growth. For more information, please contact Richard St-Julien at [email protected]
Wendeng He Xie Silicon Co. Ltd, Shandong, China:
Zibo Baoyun Chemical Plant, Shandong, China: