SolarWorld to build first production plant in Asia

FRANKFURT, Feb 8 (Reuters) - Germany's SolarWorld (SWVG.DE: Quote, Profile, Research) paved the way for its first production site in Asia as it signed an agreement with joint-venture partner SolarPark Engineering for a solar module plant in South Korea, it said on Friday.

The facility, which is due to go on stream in 2009, would initially have a production capacity of 120 Megawatt (MW) and could reach 240 MW at a later stage.

The two companies would keep the option open to set up a solar cell production at the same location, the company added.

SolarWorld's Chief Executive Frank Asbeck told Reuters the site would absorb an investment of around 60 million euros ($87 million).

"With our first Asian solar module production we are responding to the increasing solar demand in the growth markets of Asia," Asbeck said in a statement.

"Especially in Korea and Japan we are expecting a rapidly rising demand for modern solar power technology," he added.

South Korea is expected to have a market volume of 800 MW in 2012, up from 50 MW in 2007.

SolarWorld so far has production sites in Germany and the United States.

SolarWorld shares ended 2 percent higher at 27.07 euros, outperforming Germany's technology index .TECDAX, which was up almost 1 percent. (Reporting by Eva Kuehnen and Anneli Palmen in Duesseldorf; Editing by David Holmes)