Vestas Wind Systems A/S (VWS), the world’s biggest wind turbine maker, will consider partnerships in China as it seeks to expand in a country that accounted for almost half of all new wind-power installations last year.
“I consider it a good tool in the toolkit,” Chris Beaufait, president of the company’s Asia-Pacific and China business, said yesterday in an interview in Sydney when asked about ventures with other companies, adding that Vestas isn’t currently holding any talks.
Vestas is keen to grow in China after a two-year turnaround program pulled the Danish company out of debt and resulted in its first quarterly profit since mid-2011. Foreign manufacturers have struggled to grab market share in China due to low prices and competition from domestic companies.
“The last two years the company has been focused on getting costs out,” said Beaufait, who is based in Beijing and worked on mergers, acquisitions and partnerships at General Electric Co. before joining Vestas last month. “Now we’re repositioned to be able to grow, and this is exactly the right time to go do what we’re trying to do in the China market.”
Aarhus, Denmark-based Vestas was the 11th-largest supplier of wind equipment in China in 2013 and the top foreign company, according to the Chinese Wind Energy Equipment Association. Xinjiang Goldwind Science & Technology Co. (2208) was the biggest.
“We’re the most successful Western wind manufacturer in China,” Beaufait said. “But it’s not something I would be happy about, nor the board, in terms of market size and our participation, so that’s where a lot of our focus will be.”
Vestas today posted an unexpected profit in the first quarter. The company delivered 6 megawatts of turbines to the Asia-Pacific region, which accounted for 11 percent of revenue in the period. Vestas announced no new orders in the Asia-Pacific region in the first three months of the year.
“We have a small market share in a very big market and we are putting steps in place to improve on that,” Chief Executive Officer Anders Runevad said today in a telephone interview, referring to China. “We will not hunt market share without profitability, so we will have to work on operational excellence so that we get cost out to get more relevant in the market.”
Customers in China are concentrating more on reliability and operating projects efficiently, an opportunity for Vestas, Beaufait said. The company plans to “reposition our products” in China and India to try to boost market share, he said, without offering specifics.
Wind-power installations will climb to a record this year, driven by resurgent U.S. demand and growth in developing nations from Brazil to China, the Global Wind Energy Council said in an April 9 report.
China’s target of reaching 200 gigawatts of installed capacity by the end of 2020, up from 91 gigawatts now, implies an annual market of 15.5 gigawatts a year, a goal they’re “likely to exceed,” the wind energy council said in the report.
India is also a priority for Vestas, Beaufait said. Vestas appointed Jorn Hammer, a senior vice president, to lead its Indian business, Ken McAlpine, its spokesman, said by phone.
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