Release time : 2015-06-15 12:51:22
Wuxi, China-based China Wind Systems plans to start production this month at its new manufacturing facility that is expected to more than quadruple its output of components for wind turbines.
The parts supplier is tapping into a problem constraining the wind market in China. Analysts predict a shortfall of about 5 gigawatts of gearboxes this year relative to the demand for turbines. During the past decade, turbine demand has increased about 46 percent a year.
Leo Wang, senior vice president of finance for China Wind, said the new facility will help China Wind break into the market for large rolled rings?aa sector with fewer competitors than the small-to-mid rings and with more potential.
"There's a trend in China as in most places toward larger turbines because they are more efficient," said Wang told the Cleantech Group.
China Wind Systems plans for its new, 108,000-square-foot production facility to initially operate at half its capacity but reach 100 percent by 2010, at which point it would produce 40,000 tons of rolled rings up to 6.3 meters in diameter, as well as flanges, shafts and gear rims.
The $15 million expansion started in January to increase annual production from the current 8,500 tons of rolled rings up to 3 meters in diameter.
Because it no longer plans to outsource manufacturing, China Wind?s profit margin is expected to increase from 22 percent now, to 28 percent to 34 percent. China Wind designed its own equipment so that it can be repaired in-house, Wang said.
The company is projecting $44 million (RMB 300 million) in revenue in 2009 and $13.6 million in gross profit.
A second, 24-month expansion starts in December to allow China Wind to produce 400 gearboxes and 200 yaw bearings annually. Rolled rings are components of gearboxes.
China has the largest wind turbine manufacturing industry in the world, with more than 40 wind-component manufacturers including Goldwind, Sinovel Wind, Dongfang, Windey and Sewind (see China drives global market, supply for wind). China?s wind equipment market is worth about $8.59 billion annually.
Chinese manufacturers account for about 56 percent of wind equipment installed globally in 2007, according to a new report from the Global Wind Energy Council. Domestic manufacturing capacity is about 8 GW and is expected to reach 12 GW by 2010, the report said.
China is also a significant market for wind turbine manufacturers. The country had an installed capacity of 5.9 GW at the end of 2007, an increase of 145 percent over the previous year. China is expected to surpass Germany as the leading wind-energy country by the end of 2009, the report said.
China Wind has only been focused on this market since April 2007. The company started as Huayang Dye Machine in 1995 as a dyeing- and textile-equipment company. In 2005, the company added an affiliate, Huayang Electrical Power Equipment, to manufacture equipment that the company says allows the coal industry in China to produce electricity through a cleaner process.
China Wind Systems began selling forged rolled rings to yaw-bearing manufacturer Luoyang in 2007, reaching $1.5 million in sales of forged rolled rings for the wind and other industries in the fourth quarter of 2007. The wind industry is expected to comprise 26 percent of revenue for 2008 and more than 50 percent for 2009, Wang said.
The company continues to sell equipment for the heavy machinery industry, but wind components are expected to make up $7 million, or 44 percent of the company?s revenue, this quarter.
Wang said the company is now pursuing supply deals with a number of leading companies, including Sinovel Wind, Nanjing Highspeed Accurate Gear Group, China Guodia, Gamesa, A Power Energy Generation Systems, Chongqing Gearbox, and Suzlon Wind.
China Wind announced several large contracts in September as it prepared for its expanded capacity, including a RMB 20 million ($2.9 million) deal to supply 1,350 tons of forged rolled rings to Wuxi Lida Gear Manufacturing for use in gear rims (see China Wind Systems inks yen;20M supply deal).
Earlier that month, China Wind Systems agreed to supply shafts and gear-rims to Hangzhou Advanced Gearbox Group starting in 2009 (see China Wind Systems cuts deal with large wind supplier).