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Canadian company to build German wind turbines in Quebec

Canadian company AAER Systems Inc is entering the wind industry as a turbine manufacturer after agreeing with Pfleiderer AG that it will make the German wind turbine maker's 600 kW, 1.5 MW and 5 MW machines in Quebec. AAER, based in Montreal, will begin construction of a manufacturing facility in December, with production expected to start in May 2004. In the meantime, says CEO Dave Gagnon, AAER will import German-built machines for customers in Canada and the United States.

The facility will be capable, at least initially, of producing 80-100 wind turbines a year. A decision on its location will be made in early July. The company is looking at a site near Rivière-du-Loup on the St Lawrence River, where Gagnon is hoping to negotiate a 40% tax credit on labour costs under a provincial government economic development program. "If we cannot have the credit for labour costs, we will build near Montreal," he says.

The C$30 million project also includes a plan to build a smaller production facility on the Gaspe Peninsula, probably near Matane, in a nod to Hydro-Quebec's recent request for proposals for 1000 MW of wind power, which requires that turbine nacelles for the winning projects be assembled in the region.

AAER already has letters of intent for 27, 1.5 MW and 135, 600 kW turbines, earmarked for projects in China and the Philippines, which Gagnon says will be made in Quebec. Despite this international start, AAER's focus will be on the US and Canada. "The core business for us is the North American market," he says.

Dollar deals

AAER, founded in December 2000, is a newcomer to Canada's wind power sector. It comes under the umbrella of AAER World, a platform for a number of business ventures related to the construction and renewable energy industries.

Pfleiderer, which moved from being a supplier of concrete towers into the turbine manufacturing business in 2001, currently has no machines installed in North America. But reaction to AAER's plans, says Gagnon, has been positive. Developers like the idea of North American-based service. And Canadian wind power producers, hit hard in the last year by exchange rate differentials that have driven up the cost of turbines shipped from Europe, are interested in making deals using their own dollar. "The perception of the customers is very, very good. We are very happy about that." The company, Gagnon says, is close to finalising two deals, one in each country, for a total of 25 turbines.

In addition to its Quebec plants, AAER hopes to build a service centre in British Columbia by the end of 2004 to serve western regional markets. "It is a very aggressive industry. Everything is growing very fast, and we need to move fast," explains Gagnon. AAER is also ready to look at investment opportunities in other provinces if they arise.

AAER's agreement with Pfleiderer also calls for the companies to jointly develop a 3 MW wind turbine using the German company's unique "Multibrid" technology, says Gagnon. Multibrid, specifically developed for offshore use, is designed to reduce turbine maintenance requirements and vulnerability to saline corrosion.

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