Lagerwey deal helps Enercon's overseas push

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Richard Heap
January 15, 2018
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Lagerwey deal helps Enercon's overseas push

It was in characteristically low-profile fashion that Enercon slipped out the news just before Christmas that it was acquiring shares in Dutch rival Lagerwey. The pair said on 21 December that Enercon was buying a stake of unspecified size. Mysterious.

The secrecy lasted one day. On 22 December, Lagerwey’s chief executive Huib Morelisse said the stake was 100% – a nice round number! – and that the tie-up would take effect on 1 January. The companies said Lagerwey would remain independent but they would work closely “in areas where synergies can be realised”.

Now, usually a mention of “synergies” would set off the alarm in my brain that shouts ‘business jargon’ over and over – but, in this case, it’s pretty clear what they mean. Both focus on direct-drive turbines, which makes them a good fit from a technology point of view, and they have been around for a similar time: Lagerwey was set up in 1979 and Enercon in 1984.

Enercon managing director Hans-Dieter Kettwig said the purchase would bolster its position by expanding its portfolio; and Morelisse said it would give Lagerwey a stronger position to sell its own machines. A sensible move.

And, to us, it seems to say a lot about the state of manufacturing in Germany. Kettwig warned at the WindEurope conference in November that German turbine makers were in for three tough years, as competitive tenders in onshore wind that started last
year were reducing the total size of turbine orders.

He added that turbine makers would lose up to 2.5GW of orders in Germany by 2020 because of the tenders.

This is forcing companies to restructure and grow overseas. And this is where the Lagerwey deal comes in. Enercon is seen as a leader in its home market, where it has installed over 20GW of turbines in its history, and has done even more than this overseas (23.5GW). This international story tends to get missed because of Enercon’s media-shyness.

Buying Lagerwey will shine more light on Enercon’s international plans. As well as giving it a bigger market share in continental Europe, the deal also gives it a much-needed foothold in Russia. This is a very young market – and in an oil-rich country could still be killed before it even gets going – but tough conditions in at home surely make it worthy of investigation for Enercon.

Last November, Lagerwey set up Red Wind, which is a tie-up with Russian firm Rosatom’s arm Nova Wind, to supply turbines in the region – and Red Wind is already in line for orders of 360MW. We have seen Vestas and Siemens Gamesa picking up deals in Russia, and now Enercon can count itself as a player too.

Lagerwey has other innovations that might have been attractive: hydrogen-producing turbines and climbing cranes are two of them.

Meanwhile, the Dutch firm said last year that it saw its future in licensing rather than as a pure manufacturer, and so the deal with Enercon makes sense in that perspective. Mutually-beneficial, in fact... the favourite line of most PRs when it comes to these deals.

With tough conditions in key markets likely to prevail, tie-ups like this could be a key feature of the European wind market in 2018.

It was in characteristically low-profile fashion that Enercon slipped out the news just before Christmas that it was acquiring shares in Dutch rival Lagerwey. The pair said on 21 December that Enercon was buying a stake of unspecified size. Mysterious.

The secrecy lasted one day. On 22 December, Lagerwey’s chief executive Huib Morelisse said the stake was 100% – a nice round number! – and that the tie-up would take effect on 1 January. The companies said Lagerwey would remain independent but they would work closely “in areas where synergies can be realised”.

Now, usually a mention of “synergies” would set off the alarm in my brain that shouts ‘business jargon’ over and over – but, in this case, it’s pretty clear what they mean. Both focus on direct-drive turbines, which makes them a good fit from a technology point of view, and they have been around for a similar time: Lagerwey was set up in 1979 and Enercon in 1984.

Enercon managing director Hans-Dieter Kettwig said the purchase would bolster its position by expanding its portfolio; and Morelisse said it would give Lagerwey a stronger position to sell its own machines. A sensible move.

And, to us, it seems to say a lot about the state of manufacturing in Germany. Kettwig warned at the WindEurope conference in November that German turbine makers were in for three tough years, as competitive tenders in onshore wind that started last
year were reducing the total size of turbine orders.

He added that turbine makers would lose up to 2.5GW of orders in Germany by 2020 because of the tenders.

This is forcing companies to restructure and grow overseas. And this is where the Lagerwey deal comes in. Enercon is seen as a leader in its home market, where it has installed over 20GW of turbines in its history, and has done even more than this overseas (23.5GW). This international story tends to get missed because of Enercon’s media-shyness.

Buying Lagerwey will shine more light on Enercon’s international plans. As well as giving it a bigger market share in continental Europe, the deal also gives it a much-needed foothold in Russia. This is a very young market – and in an oil-rich country could still be killed before it even gets going – but tough conditions in at home surely make it worthy of investigation for Enercon.

Last November, Lagerwey set up Red Wind, which is a tie-up with Russian firm Rosatom’s arm Nova Wind, to supply turbines in the region – and Red Wind is already in line for orders of 360MW. We have seen Vestas and Siemens Gamesa picking up deals in Russia, and now Enercon can count itself as a player too.

Lagerwey has other innovations that might have been attractive: hydrogen-producing turbines and climbing cranes are two of them.

Meanwhile, the Dutch firm said last year that it saw its future in licensing rather than as a pure manufacturer, and so the deal with Enercon makes sense in that perspective. Mutually-beneficial, in fact... the favourite line of most PRs when it comes to these deals.

With tough conditions in key markets likely to prevail, tie-ups like this could be a key feature of the European wind market in 2018.

It was in characteristically low-profile fashion that Enercon slipped out the news just before Christmas that it was acquiring shares in Dutch rival Lagerwey. The pair said on 21 December that Enercon was buying a stake of unspecified size. Mysterious.

The secrecy lasted one day. On 22 December, Lagerwey’s chief executive Huib Morelisse said the stake was 100% – a nice round number! – and that the tie-up would take effect on 1 January. The companies said Lagerwey would remain independent but they would work closely “in areas where synergies can be realised”.

Now, usually a mention of “synergies” would set off the alarm in my brain that shouts ‘business jargon’ over and over – but, in this case, it’s pretty clear what they mean. Both focus on direct-drive turbines, which makes them a good fit from a technology point of view, and they have been around for a similar time: Lagerwey was set up in 1979 and Enercon in 1984.

Enercon managing director Hans-Dieter Kettwig said the purchase would bolster its position by expanding its portfolio; and Morelisse said it would give Lagerwey a stronger position to sell its own machines. A sensible move.

And, to us, it seems to say a lot about the state of manufacturing in Germany. Kettwig warned at the WindEurope conference in November that German turbine makers were in for three tough years, as competitive tenders in onshore wind that started last
year were reducing the total size of turbine orders.

He added that turbine makers would lose up to 2.5GW of orders in Germany by 2020 because of the tenders.

This is forcing companies to restructure and grow overseas. And this is where the Lagerwey deal comes in. Enercon is seen as a leader in its home market, where it has installed over 20GW of turbines in its history, and has done even more than this overseas (23.5GW). This international story tends to get missed because of Enercon’s media-shyness.

Buying Lagerwey will shine more light on Enercon’s international plans. As well as giving it a bigger market share in continental Europe, the deal also gives it a much-needed foothold in Russia. This is a very young market – and in an oil-rich country could still be killed before it even gets going – but tough conditions in at home surely make it worthy of investigation for Enercon.

Last November, Lagerwey set up Red Wind, which is a tie-up with Russian firm Rosatom’s arm Nova Wind, to supply turbines in the region – and Red Wind is already in line for orders of 360MW. We have seen Vestas and Siemens Gamesa picking up deals in Russia, and now Enercon can count itself as a player too.

Lagerwey has other innovations that might have been attractive: hydrogen-producing turbines and climbing cranes are two of them.

Meanwhile, the Dutch firm said last year that it saw its future in licensing rather than as a pure manufacturer, and so the deal with Enercon makes sense in that perspective. Mutually-beneficial, in fact... the favourite line of most PRs when it comes to these deals.

With tough conditions in key markets likely to prevail, tie-ups like this could be a key feature of the European wind market in 2018.

It was in characteristically low-profile fashion that Enercon slipped out the news just before Christmas that it was acquiring shares in Dutch rival Lagerwey. The pair said on 21 December that Enercon was buying a stake of unspecified size. Mysterious.

The secrecy lasted one day. On 22 December, Lagerwey’s chief executive Huib Morelisse said the stake was 100% – a nice round number! – and that the tie-up would take effect on 1 January. The companies said Lagerwey would remain independent but they would work closely “in areas where synergies can be realised”.

Now, usually a mention of “synergies” would set off the alarm in my brain that shouts ‘business jargon’ over and over – but, in this case, it’s pretty clear what they mean. Both focus on direct-drive turbines, which makes them a good fit from a technology point of view, and they have been around for a similar time: Lagerwey was set up in 1979 and Enercon in 1984.

Enercon managing director Hans-Dieter Kettwig said the purchase would bolster its position by expanding its portfolio; and Morelisse said it would give Lagerwey a stronger position to sell its own machines. A sensible move.

And, to us, it seems to say a lot about the state of manufacturing in Germany. Kettwig warned at the WindEurope conference in November that German turbine makers were in for three tough years, as competitive tenders in onshore wind that started last
year were reducing the total size of turbine orders.

He added that turbine makers would lose up to 2.5GW of orders in Germany by 2020 because of the tenders.

This is forcing companies to restructure and grow overseas. And this is where the Lagerwey deal comes in. Enercon is seen as a leader in its home market, where it has installed over 20GW of turbines in its history, and has done even more than this overseas (23.5GW). This international story tends to get missed because of Enercon’s media-shyness.

Buying Lagerwey will shine more light on Enercon’s international plans. As well as giving it a bigger market share in continental Europe, the deal also gives it a much-needed foothold in Russia. This is a very young market – and in an oil-rich country could still be killed before it even gets going – but tough conditions in at home surely make it worthy of investigation for Enercon.

Last November, Lagerwey set up Red Wind, which is a tie-up with Russian firm Rosatom’s arm Nova Wind, to supply turbines in the region – and Red Wind is already in line for orders of 360MW. We have seen Vestas and Siemens Gamesa picking up deals in Russia, and now Enercon can count itself as a player too.

Lagerwey has other innovations that might have been attractive: hydrogen-producing turbines and climbing cranes are two of them.

Meanwhile, the Dutch firm said last year that it saw its future in licensing rather than as a pure manufacturer, and so the deal with Enercon makes sense in that perspective. Mutually-beneficial, in fact... the favourite line of most PRs when it comes to these deals.

With tough conditions in key markets likely to prevail, tie-ups like this could be a key feature of the European wind market in 2018.

It was in characteristically low-profile fashion that Enercon slipped out the news just before Christmas that it was acquiring shares in Dutch rival Lagerwey. The pair said on 21 December that Enercon was buying a stake of unspecified size. Mysterious.

The secrecy lasted one day. On 22 December, Lagerwey’s chief executive Huib Morelisse said the stake was 100% – a nice round number! – and that the tie-up would take effect on 1 January. The companies said Lagerwey would remain independent but they would work closely “in areas where synergies can be realised”.

Now, usually a mention of “synergies” would set off the alarm in my brain that shouts ‘business jargon’ over and over – but, in this case, it’s pretty clear what they mean. Both focus on direct-drive turbines, which makes them a good fit from a technology point of view, and they have been around for a similar time: Lagerwey was set up in 1979 and Enercon in 1984.

Enercon managing director Hans-Dieter Kettwig said the purchase would bolster its position by expanding its portfolio; and Morelisse said it would give Lagerwey a stronger position to sell its own machines. A sensible move.

And, to us, it seems to say a lot about the state of manufacturing in Germany. Kettwig warned at the WindEurope conference in November that German turbine makers were in for three tough years, as competitive tenders in onshore wind that started last
year were reducing the total size of turbine orders.

He added that turbine makers would lose up to 2.5GW of orders in Germany by 2020 because of the tenders.

This is forcing companies to restructure and grow overseas. And this is where the Lagerwey deal comes in. Enercon is seen as a leader in its home market, where it has installed over 20GW of turbines in its history, and has done even more than this overseas (23.5GW). This international story tends to get missed because of Enercon’s media-shyness.

Buying Lagerwey will shine more light on Enercon’s international plans. As well as giving it a bigger market share in continental Europe, the deal also gives it a much-needed foothold in Russia. This is a very young market – and in an oil-rich country could still be killed before it even gets going – but tough conditions in at home surely make it worthy of investigation for Enercon.

Last November, Lagerwey set up Red Wind, which is a tie-up with Russian firm Rosatom’s arm Nova Wind, to supply turbines in the region – and Red Wind is already in line for orders of 360MW. We have seen Vestas and Siemens Gamesa picking up deals in Russia, and now Enercon can count itself as a player too.

Lagerwey has other innovations that might have been attractive: hydrogen-producing turbines and climbing cranes are two of them.

Meanwhile, the Dutch firm said last year that it saw its future in licensing rather than as a pure manufacturer, and so the deal with Enercon makes sense in that perspective. Mutually-beneficial, in fact... the favourite line of most PRs when it comes to these deals.

With tough conditions in key markets likely to prevail, tie-ups like this could be a key feature of the European wind market in 2018.

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Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.