Winds of change as Vestas shuts plant


VESTAS, the world's largest wind turbine maker, expects to save 10 million euros (US$12.5 million) by closing a plant in China that produces kilowatt turbines because the company sees low market demand in the coming years.

Production will be halted at the Hohhot factory in Inner Mongolia Autonomous Region in the summer and about 300-350 jobs will be cut but 10 million euros will be saved, Vestas said yesterday.

Closing the factory would phase out the production of the V52-850 kilowatt and V60-850 kilowatt turbines.

"Vestas remains firmly committed to China and has confidence in China's long-term growth in the wind energy industry in spite of the termination," the Danish firm said.

Following the closure, Vestas' overall workforce of 2,600 in China will be located in two plants in Tianjin and Xuzhou, Jiangsu Province and two offices in Beijing and Shanghai.

Separately on Saturday, India's largest wind turbine maker Suzlon Energy Ltd said it will sell its Chinese production unit to China Power (Tianjin) New Energy Development Co for US$60 million.

Chairman Tulsi Tanti said the sale disposes non-critical assets to reduce its long-term debt.

"The dynamics of the wind energy market have changed considerably over the past year, and we are realigning our strategy to the China market with an agile, asset-light business model to achieve the high growth and margins but with lower investments," Tanti said.

Suzlon started its marketing operations in China in 2005, followed by the set-up of its wholly-owned factory in 2006. So far the company has installed more than 900 megawatts of wind capacity in China.

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