Both companies will remain in Britain. The acquisition gives the Danish company a good foundation in the UK market, says NEG Micon's Jens-Erik Kristensen. "Wind Energy Group will be continued primarily as a sales and service company which will cover all the activities in Britain. Taywood Aerolaminates will be the know-how centre of NEG Micon's development and production of blades," he adds. Neither company has divulged the price paid for the UK firms.
NEG Micon is the second largest supplier of wind turbines, accounting for around 20% of the global wind turbine market, claims the company. It now has the opportunity to add WEG's pitch regulated technology to its range of stall regulated turbines.
NEG Micon's plans for its two new offshoots require substantial investment. Kristensen says the group will "revitalise" WEG's operations. Its manufacturing side is to be expanded so that more of the group's turbines will be made in Britain -- increasing UK wind exports into the bargain. NEG Micon also plans to locate its "offshore centre" in Britain and has brought its own man, Peter Hunter, to head the UK operation. WEG's overseas interests -- primarily in India -- are to remain largely unaffected. Other benefits that WEG can bring to NEG Micon are its R&D capability and operations and maintenance expertise for the UK wind farms of Nordtank machines, under NEG Micon's wing since the fusion of Micon with Nordtank Energy Group.
The purchase of Taywood Aerolaminates (TAL) is an illustration of NEG Micon's new strategy to bring key technologies specific to wind turbine manufacturing under its roof. TAL supplied blades to both Nordtank and Micon prior to the companies' merger last summer. Staff at TAL's Southampton factory now number 65 -- up from just seven when the blade manufacturing operation first split from WEG in 1995. NEG Micon also plans to accelerate expansion of this business.
The deal brings to an end Taylor Woodrow's involvement in wind energy manufacturing, dating back to 1976. It formed WEG in 1980 with partners British Aerospace and GEC. They later dropped out leaving WEG in the sole ownership of Taylor Woodrow. WEG is the only manufacturer in the UK of large wind turbines. Taylor Woodrow will retain the three UK wind farms of WEG machines totalling 20 MW. "We still believe there is a good future for wind," maintains Taylor Woodrow's Andrew Wadstead, but he adds that NEG Micon was not interested in buying the wind farms.
News of the sale comes as little surprise in the UK. Wind energy is clearly not a core business activity for Taylor Woodrow. Moreover, despite the backing of its large parent company, a firm foothold in the European market has consistently eluded WEG.
Its early 250 kW turbines operated well in California, but instead of building on this original three bladed, pitch regulated design, WEG opted to develop a new two bladed 400 kW machine. When the UK market suddenly burst into life with the first Non Fossil Fuel Obligation (NFFO), WEG was unable to consolidate a customer base at home. This was largely a fault of the tight time scales of the early NFFO contracts. WEG, still an infant company at the time, was at a manufacturing disadvantage compared with larger, mainly Danish rivals who could deliver on orders more promptly.
For the time being, the companies will remain in their present locations. This poses less of a problem for TAL in its purpose built factory in Southampton, but WEG, currently located within Taylor Woodrow's headquarters in west London, will inevitably soon have to look for a new base. The change of ownership should not lead to any loss of jobs, says WEG's John Armstrong. The 45 WEG employees will be transferred to the new company or accommodated within the Taylor Woodrow group.
The name of the new group of companies has yet to be decided. As well as its purchase of WEG and TAL, NEG Micon also has to consider its takeover of Danish sub-contractor DanControl, explains Kristensen (story page 14). News of an impending sale of WEG and TAL came to light in late February when, conforming to Danish stock exchange rules, NEG Micon, a publicly traded company, revealed it was in talks with Taylor Woodrow.