Orders for wind turbines this fall will affect revenues in 2010, according to global growth consultant Frost & Sullivan, which analyzed the results of the quarterly statements and presentations of leading wind energy players. The analysis goes on to say that companies must adopt new strategies to keep margins intact.
‘Certainly, the consequence of the recent slowdown of activity has been a fall in lead times and order backlogs, prices of turbines, freight costs and raw-materials-leading to renegotiation of contracts by wind turbine manufacturers with sub-suppliers and, in turn, sub-suppliers with raw material producers,’ says Frost & Sullivan analyst Gouri Kumar.
A number of mergers and acquisitions and joint venture (JV) transactions have been taking place in the industry worldwide, including the GE Drivetrain Technologies and Chongqing XinXing Fengneng JV.
Other companies are focusing on improving value proposition internally; these companies are fine-tuning quality management, supplier auditing, operations and maintenance, and training of technical personnel. This strategy reduces capital expenditure per megawatt and also accelerates their value proposition.
The Frost & Sullivan analysis also concludes that companies will place a greater emphasis on the bottom line by shutting down factories or cutting down on shifts in terms of working hours of labor, especially in regions where new orders are expected to fall below boom levels.
Some companies are diversifying and redefining priorities, according to Frost & Sullivan. For example, Gamesa formed a JV with Iberdrola in order to move away from being a full-scale developer and focus more on closing-stage sales.
SOURCE: Frost & Sullivan
