Vestas turbines starting to blow hot in China
After experiencing several years of stagnancy in China, the Danish wind turbine giant Vestas is making significant inroads in the massive, lucrative market.
Over the first three months of 2015, Vestas secured more orders than it did over the whole of 2014.
“We are focusing more on China now and we have already seen an improvement,” Anders Runevad, the CEO of Vestas, told Børsen business newspaper.
During the spring of 2014, the company unveiled a new Vestas strategy in China to help it become more flexible in tailoring orders to suit Chinese demands and needs.
Vestas had performed well in China until 2010, but then the Chinese market started demanding low-budget wind turbines and many orders began going to Chinese-produced turbines. But last year the Chinese authorities toughened their demands regarding the quality of wind turbines, much to the benefit of Vestas.
Eyeing big markets
Aside from China, Vestas has also stepped up its efforts to gain a foothold in other two major markets, India and Brazil, which along with China make up 50 percent of the global wind turbine market.
“If Vestas can get hold of 5 percent of the market share in China, as they had in 2010, then it could increase its top-line growth by 10-15 percent,” Michael Friis Jørgensen, a head analyst with financial services group Alm Brand, told Børsen. “And if they can also get into the Brazilian market, it would be even better.”
Analysts estimate that Vestas will begin reaping significant results in China in 2016 or 2017.
In related news, Vestas secured an order of 37 V117-3.3 MW turbines from Allianz Capital Partners for one of Sweden’s largest wind power plants in the Ljusdal and Bollnäs municipalities.
Delivery is expected to commence in the first part of 2016, while commissioning is scheduled to begin shortly thereafter.
The contract includes the supply, installation and commissioning of the turbines and a 15-year full-scope service agreement.