Germany

Germany

Enercon shrinks domestic production, switches focus

GERMANY: Turbine manufacturer Enercon is reducing capacities at its local, exclusive component suppliers to turn increasingly to international markets and meet their local content requirements.

Enercon has noticed a shift away from concrete towers in favour of steel units
Enercon has noticed a shift away from concrete towers in favour of steel units

Enercon said it is responding to changes in the national market and from October 2018 will focus its efforts on international markets.

"We have to respond to the developments in our domestic market," said Hans-Dieter Kettwig, one of Enercon‘s managing directors

"Here, the onshore wind industry is under enormous cost pressure and installation figures are in sharp decline, resulting in a slump in orders for Enercon in Germany," he explained .

If Germany makes the mistake of not meeting its climate targets and those set by the EU, further cuts will not bypass the German wind energy industry, the company warned.

Enercon is reducing existing contracts with three suppliers of concrete tower segments and installation of concrete turbine towers due to lack of order volume in the domestic market and the need for proximity of tower production to project sites.

Also, the market is increasingly moving away from concrete towers and towards steel towers, which require less logistical effort, Enercon noted.

Job losses

Supplier contracts with WEC Turmbau, Emden, and WEC Turmbau, Magdeburg, both of which produce concrete tower segments, are to be reduced involving staff cuts.

Roughly 190 jobs will be cut in Emden and 130 in Magdeburg.

WEC Site Services — which installs concrete towers for Enercon, mainly in Germany — with 150 employees, will close down at the end of September 2018.

For blades, Enercon is reducing existing contracts with Aero Ems in Haren.

Orders for Aero Ems are secured until end-September 2018, but then the company will be considerably downsized with up to 235 job losses, said Enercon.

Cooperation and coordination of production is to be increased at Aurich-based blade suppliers KTA Kunststofftechnologie Aurich, RBO Rotorblattoberflächen, Composite Material Supply and Aero Rotorblattfertigung , resulting in the loss of around 130 jobs.

"Due to the tense market situation in Germany, it is no longer possible to provide our suppliers with the necessary amount of work and so a reduction in supplier contracts is unavoidable.

"However, we are still firmly committed to creating value in the domestic market and our region, as far as the local content requirements in international business allow," said Simon-Hermann Wobben, co-managing director at Enercon.

New markets

Contrasting with the doldrums in Germany, Enercon sees big potential in other markets and "management is working on the assumption that, for the time being, Enercon will generate the majority of its sales in highly competitive international markets."

It is currently making preparations to ensure it is "ready to face the demanding challenges posed by different countries, including risk analyses and discussions with ministries, local authorities and other parties involved".

Enercon is currently "enjoying particular success" in France, South America, Sweden and Turkey.

Its new target markets includes Mexico, Vietnam and South Africa, where some stipulate requirements for local content.

Enercon's recently acquired Dutch turbine builder Lagerway is expected to help in opening up international markets.

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