Rationalisation and consolidation -- Nordex plans future strategy

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Nordex has revealed a three-pronged strategy to improve earnings in its report on financial results for business year 2000/2001. "Substantial contributions" will be made through economies-of-scale rationalisation in blade manufacture and turbine production and a restructuring of the Nordex Group, according to Nordex chairman Dietmar Kestner.

With commercial production of 300 blades a year starting up in Rostock in late November, Nordex expects to "reach financial break-even this year, and after that achieve positive results," Kestner reports. Second, Nordex will cease production of three of its wind turbine models: the 250 kW, 600 kW and 1 MW machines, and will instead concentrate on four models: the 800 kW, 1.3 MW, 1.5 MW and 2.5 MW/3 MW machines. The four turbine models will, wherever possible, be equipped with identical sets of components. "This will allow cost advantages in production, procurement and storage," the company says.

The third prong of the strategy is creation of a holding company and reduction of the number of subsidiaries from five to three. "This will cut costs and have an integrating effect," says Kestner. Nordex Holding's subsidiaries will be: NPV Planung & Vertrieb, responsible for development and marketing of wind stations, Nordex Energy, which develops and manufactures wind turbines, handles turnkey installation of wind stations and operates turbine service and maintenance, and Südwind Energy, responsible for purchasing, technical co-ordination and project management for the Südwind brand of turbines.

The three measures are aimed at improving Nordex's earnings before interest and tax (Ebit) margin in the current business year to 5% from 4% last year, and securing a steady annual rise after that. Last year's Ebit performance was hit by initial losses incurred in blade construction and in establishing subsidiaries in Great Britain and France, the company says. The Nordex business year runs to September 30. Turnover in the last business year was EUR 347 million, a 27% improvement on the previous year's EUR 273 million.

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