The decision means the closure of its Hohhot factory in China, taking effect over the summer, with 300-350 employees losing their jobs. “Vestas projects a low market demand for the kilowatt platform in the coming years,” it says, stressing it “remains firmly committed to China and has confidence in China’s long-term growth in the wind energy industry”.
The closure, Vestas says, will lead to annual savings of around €10m. “The cost of closing the factory is covered by the 2012 guidance for special items of €50-100m.” The news comes just days after Vestas announced it has scrapped plans for a wind turbine factory in the UK’s Port of Sheerness.
The company will honour all firm sales commitments for kilowatt turbines. Any ongoing negotiations for kilowatt orders will be finalised “considering the customers’ needs and Vestas’ profitability”. The firm will also continue to offer service solutions to owners and operators of its smaller machines.
The Hohhot factory closure will bring the total number of Vestas employees in China to approx 2,600, spread across two production bases in Tianjin and Xuzhou and two offices in Beijing and Shanghai, respectively.
Meantime, as part of the restructuring, Vestas has decided to unite its two current sales business units – Vestas Asia Pacific and Vestas China. As a consequence, Sean Sutton, President of Vestas Asia Pacific, has left Vestas after mutual agreement. Jens Tommerup, President of Vestas China, will head the new combined unit. The company says: “The creation of a combined sales business unit for China and Asia Pacific will support Vestas’ ability to share best practices across Asia, ultimately benefitting Vestas’ customers.”