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Finland

Gearbox maker ramping up -- First US production plant

Finland's Moventas, a provider of gearboxes to Vestas, Gamesa and Acciona, aims to triple its manufacturing capacity by injecting EUR 100 million to expand in Finland and build its first factory in the United States. Annual output of wind turbine gearboxes will go from about 2400 MW to more than 7000 MW by 2011.

The American factory will be located in Faribault, Minnesota, about 72 kilometres from Minneapolis in the American Midwest, where the wind business is brisk and other subcomponent suppliers are clustering. Acciona is making wind turbines in neighbouring Iowa, and Vestas is setting up shop in Colorado for turbine production in 2010. Gamesa makes turbines in Pennsylvania.

"Many of our competitors already have their own production in the US and we have a growing number of customers in this market. Right now, it is more important than ever to be close to our US customers," says Moventas CEO Ilkka Hakala. The Minnesota unit will initially be used for gearbox assembly, testing functions, and after-sales service, but the company may add full gearbox production later, adds Hakala. With the US dollar still weak, he says short term cost savings can be achieved by investment now.

In Finland, Moventas is expanding wind turbine gearbox production capacity at its facilities in Parkano and Karkkila and with a new factory at Jyväskylä. Groundbreaking for the Jyväskylä and Faribault plants is expected next month, with production starting by the end of 2009 and full capacity reached by January 2011.

Bottlenecks in the supply of key components such as gearboxes are easing as manufacturing capacity increases, according to Denmark's BTM Consult. In a new survey of the industry, it reports there is now just enough gearbox capacity to meet demand through 2012, though shortages of large bearings means that gearbox supply will continue to be a problem.

Commenting on the bottlenecks, Hakala says: "These bottlenecks will become less of an issue when our suppliers invest at the same capital intensive manner as we are right now. We are working with suppliers to make sure that we are all reading off the same page on this." Hakala will not say who supplies Moventas with subcomponents. Neither will he name the wind turbine makers that Moventas' increased manufacturing capacity will benefit, other than the firm will be supplying gearboxes for turbines rated at 1.5 MW and 2 MW.

In August, the company received wind industry orders for EUR 140 million for delivery at the end of 2009 from existing facilities. It is hoping to raise its current 15% share of the wind turbine gearbox market. Moventas projects annual market growth of 35% for turbine gearboxes in Europe and North America and is pursuing stronger market shares in Asia. Group-wide, the industrial gearbox company is forecasting 40-50% growth in sales in 2008, against a 40% increase in 2007 to EUR 291 million. Moventas is majority-owned by IK Investment Partners, one of Europe's biggest private equity investors.

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