Vestas to sell Danish wind tower factory to China's Titan
Vestas is to sell its tower factory in Denmark to Chinese manufacturer Titan Wind Energy for an undisclosed amount.
The acquisition will help cut fixed costs at Vestas and give Titan Wind – one of China’s largest tower makers – a manufacturing base in Europe.
Vestas had earmarked the tower factory in Varde for closure in January as part of a global cost-cutting drive.
Shenzhen-listed Titan, a supplier to Vestas since 2006, announced last week that it had registered a European subsidiary in Denmark.
It also revealed that it would provide its Singapore unit with $20m in cash to fund a new manufacturing base in Denmark. This cash will go towards the Vestas factory acquisition, Titan Wind chief operating officer Aaron Lee tells Recharge.
The company says the Denmark facility will increase opportunities to expand its global customer base.
Competition in the Chinese wind industry is fierce and tower makers are keen to build up exports to maintain growth.
“The location of our European headquarters in Varde is optimal because we see Denmark as the focal point for the global wind industry. Europe is the region that offers the most promising outlook for the development of offshore wind energy,” says Yan Junxu, founder and chief executive of Titan Wind.
The company has a production capacity of 1,600 towers a year. It is facing steep import duties (26%) in the US after a preliminary investigation deemed the company to receive unfair government subsidies.
It expects to bring cost advantages to its European operations from sourcing of cheaper raw materials in China, adds Lee.
According to a Vestas statement, the Chinese company will “maintain most of the jobs for about 120 employees” in Varde.
Following approval from the Chinese authorities, Vestas will transfer the facility to Titan on 1 September.
The deal was signed ahead of an official visit by Chinese president Hu Jintao to Denmark this week.