Charles & Colvard, Ltd. and Norstel AB today announced the signing of a Long Term Supply Agreement for the supply of silicon carbide (SiC) for use in the manufacturing of Charles & Colvard’s moissanite jewels. The initial phase of the contract is for three years, and involves the supply of material worth a minimum of $4,100,000.
The agreement gives Charles & Colvard the exclusive right to purchase silicon carbide from Norstel for the purpose of fabricating, distributing or selling faceted jewels. The minimum purchase commitment during the first thirteen months of the agreement is relatively small at approximately $307,000 while Norstel’s recently announced silicon carbide plant in Norrköping, Sweden, is being constructed. As the plant becomes operational in 2006 deliveries are scheduled to increase. The agreement provides Charles & Colvard an option to extend the term of the agreement for a four year period.
Norstel’s operations are currently located on the premises of Linköping University in Sweden, where it has focused on the development of SiC ingots, wafers and epitaxy. The unique crystal growth technique HTCVD, developed by Norstel, is particularly well suited for growing the pure and defect-free crystals required for the manufacturing of moissanite jewels.
“A relationship with Norstel AB will allow Charles & Colvard to have a second source for our raw material, silicon carbide,” said Robert Thomas, President and CEO of Charles & Colvard.
Mr. Thomas continued, “Norstel AB has demonstrated, on a limited basis, the ability to provide silicon carbide in the quality that meets our stringent standards. We look forward to their new facility coming on line and seeing them consistently growing larger quantities of crystals.”
Dr. Asko Vehanen, CEO of Norstel AB, said, “I am pleased that by signing this agreement, and at the same time completing the financing of our new facility, we will be able to participate in the growth of Charles & Colvard. We view this as the beginning of a mutually beneficial long term relationship.”
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