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South Korea

South Korea

Wind business: Enter another Korean giant

Korean industrial giant Daewoo Shipbuilding & Marine Engineering (DSME) has entered wind turbine manufacturing with its purchase of DeWind, a long-established German line of technology, from Composite Technology Corporation (CTC), an American cable company, for $49,500 million. DSME becomes the fourth owner of DeWind since 2003, when the original management sold out to British industrial group FKI.

Neither FKI nor DeWind's two subsequent owners followed through on plans to commercialise the DeWind concept after its success in Germany in the mid-1990s. Industry experts say a company of DSME's size is exactly what DeWind needs. "The technology is sound, but they (CTC) haven't been able to ramp up manufacturing and that's where they have fallen down," says Jeff Chester, a specialist attorney with Kaye Scholer LLP.

"The biggest issue with CTC is just balance sheet strength," says DeWind president Bob Rugh. "If you take an order, what's your ability to fulfil the order? And if you fulfil the order, what's your ability to back the turbines in case there's any kind of issue?" DSME is the second-largest shipbuilder in the world. Parent Daewoo International posted profits of $125 million in 2008.

Rugh believes DSME's purchase of an established turbine concept puts it ahead of the curve of Korean companies entering the wind power space, including Hyundai and Samsung, which have licensed designs or are starting from scratch. The current DeWind turbine line ranges from 1.25 MW to 2.2 MW and DSME also picks up a research and development division in Lubeck, Germany, and a new Texas assembly line, established in partnership with Teco-Westinghouse, a household name in the US power industry (Windpower Monthly, October 2007).

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