Strategy - Chinese firms move into export markets

CHINA: Xiangtan Electric Manufacturing Corporation (XEMC), a leading Chinese wind turbine maker, will export 300MW of wind turbines to a wind farm in Argentina, signaling a trend among Chinese manufacturers towards export as the domestic market becomes increasingly competitive.

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The order, comprising 150 direct-drive permanent magnetic 2MW wind turbines, will be delivered to Argentina in 2012, and be fully installed in 2013, says Yi Pei, director of XEMC's Beijing Office.

Yi did not reveal the name of the Argentinian partner, but media reports suggest it is Celta and that the wind farm will be in the country's coastal region of Reta.

XEMC's turbines boast high efficiency, says Yi, about 10% greater than a conventional geared doubly fed turbine. The turbines are also resistant to salt corrosion, important for a coastal wind farm.

"We are eager to export turbines because competition in the Chinese domestic market has become increasingly ferocious with 80-odd turbine makers. Besides, prices of raw materials for wind turbines have risen in the Chinese market," Yi adds.

Higher prices

Industry officials say Chinese wind turbine makers will earn more money from selling wind turbines overseas. Export prices are about 20-30% higher than those in the domestic market.

"We will expand exports of wind turbines," says Zhou Jianxiong, chairman of XEMC. "Turbine export will account for 30% of our annual output in five years. We will invest and construct wind farms in the US, Canada and Australia, using our own turbines, in the next two years."

Going global has become a major theme for Chinese wind turbine makers with other leading firms announcing ambitious targets to tap the overseas market.

Sinovel, China's largest wind turbine maker, plans to export half its total wind turbine output by 2015.

Goldwind, China's second-largest wind turbine supplier, has orders to export 202 of its 1.5MW turbines: 71 to the US, 70 to Australia, 34 to Ethiopia, 21 to Cyprus and six to Cuba. Most will be delivered this year. In future, Goldwind projects that exports will account for 25-30% of total sales.

In December, Dongfang Electric signed an agreement with KSK Energy of India to export 166 of its 1.5MW direct-drive permanent magnetic turbines to India. All are to be delivered before March 31, 2012. Then in April, Shanghai Electric signed an agreement with KSK Energy of India to export 125 of its 2MW turbines.

But Shi Pengfei, vice-president of the China Wind Energy Association (CWEA) says that penetrating the overseas market will not happen overnight, because Chinese companies are unfamiliar with foreign investment environments and legal systems. Last year, Chinese turbine makers exported only 13 units, says CWEA.

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