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General Electric Smartly Bolsters Presence in Biggest Wind Market through Local JV to circumvent Foreign Discrimination

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General Electric is looking to increase its marketshare in the Biggest Wind Energy Market through a JV with a Local Partner.All Wind Heavyweights like Vestas,Suzlon and Gamesa are looking towards the Chinese Wind Market to boost their revenues as Developed Markets have stalled in 2010.China has increased its Wind Energy by almost 100% in 2009 to 25 GW and more than 50% of the global capacity in 2010 will be installed in the Middle Kingdom.Local Players like Sinovel,Goldwind and Dangfang have managed to acquire most of the incremental demand with the share of foreign companies decreasing to a measly 13% in 2009 from 80% in 2006.Local content requirements and partisanship shown towards local firms have been a huge factor in the growth of Chinese Domestic Companies.Now Goldwind and Sinovel are looking to expand overseas as Fierce Price Wars cut into their Profit Margins and Growth.

General Electric being Smart in its Chinese Expansion

General Electric is looking to Invest Heavily in the new Age Green Industry like other Industrial Giants like Siemens,ABB etc.Having a Local Partner is a Huge Advantage since almost the whole of the Chinese Wind Industry is controlled by Chinese SOEs who favor local companies over foreign ones.EU and Japan have protested against discrimination over their domestic firms but not to much avail.GE is trying to circumvent the Discrimination Problem by giving a majority stake of 51% to Harbin Electric Machinery (HEC).However the Going will not be Easy for GE which is a Global Wind Market Leader because Competition is intensifying in the Chinese Market.Ming Yang Wind Power is looking to expand six fold to take advantage of the Growth in Chinese Wind Energy.Other Companies are doing the same.

GE Sets Up Chinese Wind Turbine Joint Venture – Eolic

Targeting an anticipated six-fold expansion in China’s wind power capacity by 2020, the group has signed a deal with a Harbin Electric Machinery (HEC) to increase its access to the market.The new company will manufacture GE-designed wind turbines for near-shore and offshore applications in China. GE will hold 49% of the firm, with 51% belong to HEC, a subsidiary of the power plant equipment giant Harbin Power Equipment.GE will also work with the new joint venture to develop wind turbines for offshore projects in China using direct drive technology.As part of the overall wind partnership, HEC is purchasing a 49% interest in the existing GE Shenyang Wind factory, which will continue to manufacture land-based wind turbines.

PG

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in or call me on +913340606492.

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