Vestas, the world’s biggest wind turbine manufacturer, has confirmed that it is to press ahead with plans for a huge expansion in China, despite recent reports that the global economic downturn could leave the company with 15 per cent of excess capacity.
According to recent reports, the company plans to invest $350m (£248m) in extending its plant in Tianjin in response to growing demand from customers in China.
Speaking to BusinessGreen.com, Vestas spokesman Peter Krause said that the original expansion plans had been announced last year and would continue despite the changing economic conditions.
He added that in addition to extending the facility at Tianjen, the company was also building a foundry plant to the north of Shanghai and finalising plans for a new facility in Inner Mongolia dedicated to building smaller scale ” kilowatt turbines” for the Chinese market.
Vestas has received a number of larger orders from Chinese customers in recent months, including an order for 116 turbines from China Guangdong Nuclear Wind Power, and Krause was concerned there were no fears that the company would be burdened with overcapacity as a result of the expansion.
“China is heading towards an installed base of 100,000MW of wind power – that is equivalent to what the entire world had installed at the end of 2007,” he said. “In a market like that an extra manufacturing plant to two can be very handy.”
Globally, however, the immediate outlook for Vestas remains less upbeat, after the company last week warned that the economic crisis could leave it with some excess capacity.
Chief executive Ditlev Engel told The Guardian newspaper that the recession had prompted the company to lower its growth expectations.
“Six months ago everyone [in the investment community] said we were not doing enough to meet demand growing at an expected 40 per cent this year,” he observed. “Now people are saying, ‘Why have you put in place plans for a 40 per cent increase in capacity when growth levels are only going to be 25 per cent?’. “




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