Spanish wind turbine maker Gamesa is seeing booming sales in emerging markets, expects double-digit sales growth through 2017 and plans investments in solar and off-grid power generation in India, its chairman said.
In India, where Gamesa started activities only five to six years ago, it expects turbine sales adding up to 900 MW this year, and in Brazil, where the company had no business four years ago, it expects sales of 650 MW this year.
Fast growth in emerging markets will help Gamesa reach its target of selling 3,500-3,800 MW of capacity in 2017 from an estimated 3,100 MW this year, Ignacio Martin told Reuters.
In China, Gamesa expects to sell 450 MW this year, but sees a slowdown next year as sales this year were boosted by accelerated wind investment ahead of expected subsidy cuts.
Emerging markets accounted for nearly 70 percent of Gamesa's sales of 2,623 MW in 2014, with 34 percent in Latin America, 26 percent in India and 9 percent in China.
The United States and Europe each account for about 15 percent, but sales growth in Gamesa's traditional southern European strongholds has slowed following the 2008 financial crisis, which sent Gamesa looking for growth overseas.
Martin said Gamesa is now the top wind turbine vendor in India, China and Mexico and number 2 in Brazil.
Martin said besides boosting onshore wind sales in new markets, Gamesa sees huge potential in solar and off-grid generation.
"The cost of solar is falling quickly and we believe it could be an interesting market for Gamesa," Martin said.
He said the most promising solar market was India, which has year-round sun and huge power demand.
"We prefer to start with solar in India. After that we will decide whether we move to other geographies," he said, adding that Gamesa will only move ahead with solar if it can earn returns similar to its wind business.
Gamesa does not plan to manufacture solar panels but would focus on developing solar farms, though Martin said it will probably start manufacturing inverters, which turn solar-panel direct current into alternate current.
Martin said Gamesa already has solar orders for about 10 MW and that moving to 100 MW could go quickly.
Early next year, Gamesa also plans to launch an off-grid power generation system that will combine a wind turbines and/or solar panels with diesel generators to reduce the cost of power for offgrid villages and remote industrial sites such as mines.
"We want to deploy this technology in different geographies, starting in India," he said.
Martin, a 60-year-old former auto industry executive, is bringing cost-management procedures from mature industries to a company that for 15 years focused mainly on meeting roaring demand.
"There was a lot of potential for internal improvement in every aspect, and that process is still going on," he said, adding cost is now the main sales driver in the turbine market.
Gamesa's stock has risen about 15-fold since Martin took the helm in 2012. This year it is the best performer in the ThomsonReuters Global Renewable Energy Equipment index, up 108 percent.
(Reuters)
