Market News

 August 27, 2011
Vestas poised to green light UK factory if offshore turbine orders materialise

 Vestas, the world's largest wind turbine manufacturer, has confirmed it could build a factory in the UK within a year as soon as it has secured sufficient orders for its new offshore wind turbine.

Speaking to BusinessGreen, chief executive Ditlev Engel said that having secured the option to develop a new factory at a 70-hectare site at Sheerness in Kent, the company was poised to green light the project as soon as sufficient orders are confirmed for its 7MW V164 turbine.

"We have the manufacturing site ready as long as we get the orders to go ahead and manufacture them," he said, adding that if Vestas does proceed with the factory it will create up to 2,000 jobs and could be completed within a year, allowing the company to begin delivering turbines ahead of the next wave of offshore wind farm construction in 2015.

He also revealed that the company was already talking to a number of its customers about the potential orders and investment that would allow it to move forward with its plans for the Kent facility.

The move could complete a remarkable turnaround for Vestas in the UK, after the company controversially closed a smaller turbine blade factory on the Isle of Wight in 2009. The company has subsequently stepped up investment in a number of research and development centres, including a major new facility on the Isle of Wight. However, the Kent site promises to bring turbine manufacturing for the first time.

Engel's comments came as Vestas released its financial results for the first half of the year, confirming that revenues and profits were in line with expectations as the company continued its recovery following a tough 2010.

First-half revenues rose 31 per cent year on year to €2.47bn, while pre-tax profits reached €8m -- a significant improvement on the €219m loss recorded during the first half of 2010.

Engel said the results confirmed that the company's performance had returned to a "normalised level" following a weak first half of 2010.

Significantly, the company reported that it boasted a solid order pipeline with firm and unconditional orders covering almost all the expected revenue of €7bn for 2011.

As a result, the company said it would maintain its outlook for the full year, predicting that it will deliver revenues of €7bn and a pre-tax profit margin of seven per cent.

"In spite of the macro-economic and financial uncertainty, Vestas still expects an intake of firm and unconditional orders of 7,000--8,000MW in a market that remains fiercely competitive," the company said.

By James Murray