Dongfang signs $203million export deal with India

CHINA: Dongfang Electric, China's third largest wind turbine maker, will export 166 of its 1.5MW permanent magnetic direct-drive turbines to India.

Dongfang's Si Zefu seals contract with KSK Energy
Dongfang's Si Zefu seals contract with KSK Energy

The contract is with KSK Energy of India and represents the first major export deal for Dongfang. India does not have any direct drive turbine manufacturers.

The deal, valuing $203 million will be completed in 12 months. All the wind turbines will be delivered before March 31, 2012.

"This is the first time a Chinese wind turbine manufacturer has sold such a large amount of wind turbines to the world market," said Si Zefu, general manager of Dongfang Electric, at the ceremony signing the contract with KSK Energy of India on December 15 in New Delhi.

The wind turbines are sold at a pre-tax price of CNY5,500 yuan/kw, about 35% higher than in China.

"This is a real export of wind turbines, compared with other deals of Chinese wind turbine makers that develop wind farms in other countries with their own turbines," said Xu Hua, an information official of Dongfang Electric.

The Dongfang 1.5MW turbines were developed in 2009 with Garrad Hassan from UK and Switch from Finland. Dongfang owns the intellectual properties.

Such a big deal is considered a risk by many domestic counterparts, since Dongfang has to ensure the quality of all the turbines. If the Dongfang turbines suffer any issues, it will be penalized heavily.

An unnamed competitor said: "The bigger the contract is, the larger the risks are."

Industry experts have suggested Dongfang's experience in supplying thermal power units to India has helped build its reputation in the country.


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