Siemens Gamesa to exit direct onshore business in China - report

Siemens Gamesa Renewable Energy SA (BME:SGRE) plans to withdraw from direct sales of onshore wind turbines in China and is considering an exit from other markets, while prices will be raised in an effort to stabilise the ailing onshore business, chief executive Andreas Nauen told German business magazine Wirtschaftswoche.

Siemens Gamesa will continue to produce wind turbines in its plant in Tianjin, northeastern China, but they will be exported to other countries such as Japan, Nauen said in an interview published on Friday and added that the Chinese wind power market is no longer interesting for the Spain-based renewables company.

Apart from China, the company is considering a potential exit from Russia as projects there are risky because the construction of onshore wind parks is possible only a few frost-free weeks during the year. In Turkey, Siemens Gamesa will be much more cautious because tenders in the country oblige wind turbine makers to produce locally and it has still not realised a project there.

The focus in the company's onshore wind turbine business will be shifted more strongly to the core markets in northern Europe, the UK, Germany, Australia and Brazil where Nauen sees great potential for the 5.X onshore platform. Siemens Gamesa had pinned its hopes on the platform, but Nauen admitted that the plan for its development and marketing was too ambitious.

In addition, the company, which is 67% owned by Siemens Energy AG, is raising prices for new turbines by 3% to 5% to pass on rising raw material costs, mainly for steel, Nauen said. Its onshore wind business is struggling to improve its financial performance which has been dented by troubles in the construction of projects and higher raw material prices.

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