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China

Danish manufacturers pool resources to break into China

CHINA: Five turbine manufacturers have opened a joint factory in an effort to speed the route to making contacts in the Chinese market.

Karen Ellemann and Zhang Zong at the factory's opening ceremony at Wuquing, Tiangin
Karen Ellemann and Zhang Zong at the factory's opening ceremony at Wuquing, Tiangin

Five Danish turbine manufacturers have opened a joint factory outside Beijing, pooling resources to break into the Chinese market as partners rather than competitors.

The companies specialise in different components: CC Jensen produces oil filters, Hydra-Grene produces hydraulic components, and DAFA makes Styrofoam and rubber products to protect the turbines. Lund and Sorensen produce electric heating systems for wind turbines, while Resolux produces lighting systems for turbines and nacelles.

By working together, they hope to shorten the often long and complex road to making the right contacts with big Chinese wind turbine manufacturers such as Goldwind and Sinovel.

Ulrich Ritsing, sales director of CC Jensen, says: "The potential in the Chinese wind turbine market is tremendous. We hope that, by opening this joint factory, we can make contact with some of the big Chinese wind turbine manufacturers."

The factory opened in June. It is based in Wuqing in the city of Tianjin, about an hour south-east of the Chinese capital. Other Danish companies such as Novozymes, Danfoss and Bestseller are already located here.

More wind turbines have been manufactured in China than anywhere else in the past five years. However, many of the turbines are ineffective, because the quality of the components are not high enough. This has to improve - especially now as China is beginning to install offshore wind farms.

The first offshore farm was built last year off the coast of Shanghai and more are in the making.

Danish environmental minister Karen Ellemann, who was present at the factory opening, says: "Danish wind turbine suppliers are already in front in the wind turbine market when it comes to technology and when they cooperate in this way, they secure themselves a special position of strength."

Ritsing, who is also chairman of the Danish Export Association, says the association has strived for several years for this idea to come true: "We are five quite small players in the Chinese market at the moment. It can be a big challenge for a small supplier to start up on your own, so we can gain a lot by sharing our costs and not least our experiences. In this way we will also appear as a group with close cooperation when we meet the Chinese manufacturers."

In 2009, China overtook the US in terms of the capacity of turbines manufactured, according to BTM Consult. This offers great possibilities to the Danish suppliers if they can force their way into the Chinese market. But it requires that the companies have a presence in China. "Chinese people prefer to buy Chinese, so if you want to be successful in China you have to be able to produce and deliver locally. With this new factory all five companies can do that," says Ritsing.

If the Danish suppliers manage to gain a foothold in China, they will be a step in front of their competitors because of their high technological standard. This makes them attractive to Chinese manufacturers, according to Zhang Yong, district mayor of Wuqing.

"Denmark has the best wind turbine technology in the world, and China has a huge market, so I believe these Danish suppliers have great potential in China," says Zhang. "Actually, the Chinese wind turbine manufacturers are right now looking for ways to upgrade their technical standard, so it is a very good time to start cooperating."

All five companies have ambitions of growing big in China within a few years, and maybe at some point open their own separate factories. Until then the joint factory can turn out to be a great starting point and base of knowledge.

"We really believe in this, and maybe this project can turn out to be an inspiration for other small foreign companies who want to start up in China, but find it too confusing to do it all by themselves," Ritsing says.

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