China Sunvim forms solar module JV with German firm

SHANGHAI, Feb 23 (Reuters) - China's Sunvim Group 002083.SZ has agreed to form a solar module production joint venture with German company Aleo Solar AG (AS1Gn.DE: Quote, Profile, Research, Stock Buzz) to meet rising demand in Asia, the two companies said.

The 50/50 joint venture, with a registered capital of 17.5 million euros ($25.9 million), would be located in the eastern Chinese province of Shandong, they said.

Sunvim, a Chinese textile maker and exporter listed on south China's Shenzhen bourse, said in a statement on Saturday the first phase of the joint venture project would start production in the third quarter of this year.

Upon full completion at the end of 2009, the venture would have a total annual capacity of 50 megawatts, the statement said.

Aleo said in a statement that it would be responsible for selling the venture's products to meet growing demand for solar modules in Asia, including China, South Korea and Japan.

China is encouraging solar power production as part of efforts to boost renewable energy and cut its dependence on coal to fuel its booming economy.

A number of Chinese energy plays have sold shares in the United States, including solar cell makers Yingli Green Energy Co. Ltd. (YGE.N: Quote, Profile, Research, Stock Buzz) and LDK Solar Hi-Tech Co. (LDK.N: Quote, Profile, Research, Stock Buzz), and Suntech Power Co (STP.N: Quote, Profile, Research, Stock Buzz) and JA Solar Holdings Co Ltd (JASO.O: Quote, Profile, Research, Stock Buzz).

Tight silicon supplies have been cited as a factor hampering panel production from small solar companies. (1 euro = $1.4827) (Reporting by Rujun Shen, editing by Charlie Zhu and Michael Urquhart)