Siemens Gamesa will stop selling turbines in China’s onshore wind market

Siemens Gamesa will stop selling turbines in China’s onshore wind market

It will increase between 3% and 5% to its products in response to the increase in the prices of raw materials.

Siemens Gamesa wind turbine

The wind turbine manufacturer Siemens Gamesa will end its ground sales operations in China and will increase turbine prices by between 3% and 5% in response to rising raw material prices, the company’s chief executive, Andreas Nauen, told the magazine WirtschaftsWoche.

“We are giving up direct local business in China because we are no longer interested“, he pointed out.

Nauen said the company will continue manufacturing its machines in Tianjin, a major port city in Chinabut only to export to other markets in the region, including Japan.

But the company, based in northern Spain, will continue to sell offshore wind blades manufactured in its Shanghai factory to Chinese customers. Shanghai Electricas well as customers abroad, a spokesman said.

Next: Russia and Turkey

Despite strong global demand for products linked to a broad shift to low-carbon energy, Siemens Gamesa has issued a series of profit warnings, blaming high material costs such as steel and problems related to the launch of a new turbine.

Siemens Gamesa shares fell 2.4% on the day it announced its exit from the Chinese land market. It was not immediately clear whether the drop, compounding a nearly 25% drop so far this year, was related to the China decision.

The parent company Siemens Energywhich was spun off from Siemens AG last year, is pressing the turbine maker to turn around its ailing onshore business.

Nauen said that Siemens Gamesa was also reviewing operations in Russia and that I would be more cautious in Turkeywhere the bidding rules require that a large proportion of turbine components be manufactured locally.

In Russia, “the projects are very risky because… building a wind farm on land is only possible for a few weeks a year without frost,” Nauen said.

Ellsworth Weber