Merger for the future - interview with CEO Svend Sigaard, Vestas Wind Systems A/S

Why have the two largest Danish manufacturers chosen to merge?

To create the largest player by far in the industry. The merger is a result of the change our sector is experiencing at the moment. Previously, we typically sold single turbines to private buyers but that is changing into a far more professional market where the utility companies and other large companies are the natural customers.

 

To use an image, we can say that we used to deliver wind turbines. In the future, we deliver power plants. Therefore it is extremely important that we have the muscles – both on the market, technologically and not least financially. In the future, our professional customers will demand very large projects e.g. offshore plants and we must be ready to deliver them. The offshore wind farms that we are installing now are relatively small compared to the planned projects.

 

From a technological perspective, the merger leaves us with the absolute largest development capacity in the industry and I think that this will be important for our future ability to compete.

 

What future perspectives do you see for the industry?

I think our merger is the first step in a continued consolidation of the industry. On the wind turbine market of the future there will only be a few global players, a few regional and some very small local manufacturers. As for the market perspective, everything points towards an increasing global energy consumption – especially an increasing electricity consumption. And with the current focus on clean energy production, wind power will play a still more important role than before.

 

The largest growth will take place in the US and Europe over the next few years. But new and potentially very large markets are stirring. In Europe, the British market in particular is developing very favourably with the new structures for renewable energy.

 

What does the Danish market mean to you?

It is definitely important for us to still have a domestic market where we can test our new products. It does not need to be very big as long as it is there and it is stable. At the moment, the Danish market is practically non-existent and we spend a lot of time explaining to our foreign customers why no wind turbines are sold in Denmark.

 

Job creations over the last few years have mainly been outside of Denmark and that is of course a result of a missing home market. We still have competence centres in Denmark and this will continue in the years to come. But there are advantages in placing production close to the markets where the wind turbines are installed. Like the rest of the energy sector we are under pressure to produce the cheapest kilowatthour.