Vestas restarted production in China on Saturday and fellow global wind giant Siemens Gamesa had already done so, Recharge has learned, as the latter said it will look to India to reduce its reliance on China amid the coronavirus outbreak that's impacting its supply chain there.
The two wind OEMs are among the countless industrial companies that have seen their operations in limbo as the epidemic stopped a resumption of normal activity after the Chinese New Year holidays, and are now preparing to see what state their wider supply chains are in as working life in the nation resumes but the death toll from the virus mounts.
Siemens Gamesa, which employs about 1,300 in China, told Recharge it has resumed production in its Lingang and Tianjin factories with “comprehensive preventive actions taken to make sure our employees are safe when returning to work”.
It added that an assessment of the situation is underway as “the virus is having an impact on the Chinese supply chain, the movement of components/people and the operation of manufacturing facilities. As soon as it is ready we will communicate it to the market”.
And the Spanish-German wind group added: “At the same time, we have started to develop India as a global hub to reduce our dependency from China.”
Siemens Gamesa has a significant and established production base in India, where it is market leader. India’s wider wind power supply chain – which is theoretically geared up to support production of 10GW annually – is currently serving domestic volumes barely a quarter of that figure, and the Indian government is keen to promote it as an exporter.
Vestas told Recharge on Friday last week that it will restart production on Saturday and “gradually ramp-up as the conditions allow”. CEO Henrik Andersen said after the group’s annual results on 5 February that the Danish group was working on the basis of a restart a week or so later, after which it would see how the supply chain performs.
Despite the factory restarts, insiders in China warned that restrictions on movement of people and goods mean any expectations of business as usual will be wide of the mark. The global OEMs also have international travel bans in place.
The disruption caused to China's domestic wind market comes at a time when Western OEMs are enjoying a mini-boom in orders in the country as they win tenders against local rivals that have traditionally dominated, Recharge recently reported.