Sinovel's woes

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Adam Barber
March 7, 2013
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This content is from our archive. Some formatting or links may be broken.
Sinovel's woes

What’s going on over at Sinovel?

The latest announcement from the business tells of large-scale restructuring, culminating in the creation of an ‘international subsidiary’ to serve the global markets.

The parent company will, additionally, be split into four main divisions, focusing on the North-East, North, East and North-West Chinese regions.

Seems like some fairly extreme stuff, but it could well be just what’s required.

According to figures from BTM Consult, which ranks the global turbine manufacturers, Sinovel is struggling to stay in the top 10 of wind turbine businesses by market share.

Like many others, Sinovel is suffering the effects of being overly exposed in the domestic Chinese market. Whilst in the early years the booming Chinese wind energy sector was a closed shop to most foreign owned manufacturers, domestic wind energy firms like Sinovel, Goldwind and Ming Yang were able to divide and conquer.

But with generous support, easy planning, and cash to burn, the market quickly overheated, outgrowing its supporting grid infrastructure. Chinese manufacturers were left holding stock they couldn’t shift. And at present, with the US and European wind markets flatlining, and emerging markets much more of a free for all, there isn’t a new market to shift into quickly.

It’s probably why Sinovel is predicting a loss of $78million for 2012 and this week divulged that because of ‘accounting errors’, profits for 2011 were inflated by 22%.

It remains to be seen whether these restructuring moves can ensure that Sinovel remains as competitive as other Chinese manufacturers, although it’s perhaps unrealistic to assume that the market dominance of Goldwind can truly be assailed.

Restructuring is always a gamble – not only from a market perception perspective, but also on timing. Too soon, and processes won’t be in place to take advantage of new opportunities. Too late, and the opportunities will have been missed.

But with some analysts predicting the Chinese domestic market will rebound this year as Beijing looks to reduce its reliance on imported energy, Sinovel could be taking the gamble just at the right time.

What’s going on over at Sinovel?

The latest announcement from the business tells of large-scale restructuring, culminating in the creation of an ‘international subsidiary’ to serve the global markets.

The parent company will, additionally, be split into four main divisions, focusing on the North-East, North, East and North-West Chinese regions.

Seems like some fairly extreme stuff, but it could well be just what’s required.

According to figures from BTM Consult, which ranks the global turbine manufacturers, Sinovel is struggling to stay in the top 10 of wind turbine businesses by market share.

Like many others, Sinovel is suffering the effects of being overly exposed in the domestic Chinese market. Whilst in the early years the booming Chinese wind energy sector was a closed shop to most foreign owned manufacturers, domestic wind energy firms like Sinovel, Goldwind and Ming Yang were able to divide and conquer.

But with generous support, easy planning, and cash to burn, the market quickly overheated, outgrowing its supporting grid infrastructure. Chinese manufacturers were left holding stock they couldn’t shift. And at present, with the US and European wind markets flatlining, and emerging markets much more of a free for all, there isn’t a new market to shift into quickly.

It’s probably why Sinovel is predicting a loss of $78million for 2012 and this week divulged that because of ‘accounting errors’, profits for 2011 were inflated by 22%.

It remains to be seen whether these restructuring moves can ensure that Sinovel remains as competitive as other Chinese manufacturers, although it’s perhaps unrealistic to assume that the market dominance of Goldwind can truly be assailed.

Restructuring is always a gamble – not only from a market perception perspective, but also on timing. Too soon, and processes won’t be in place to take advantage of new opportunities. Too late, and the opportunities will have been missed.

But with some analysts predicting the Chinese domestic market will rebound this year as Beijing looks to reduce its reliance on imported energy, Sinovel could be taking the gamble just at the right time.

What’s going on over at Sinovel?

The latest announcement from the business tells of large-scale restructuring, culminating in the creation of an ‘international subsidiary’ to serve the global markets.

The parent company will, additionally, be split into four main divisions, focusing on the North-East, North, East and North-West Chinese regions.

Seems like some fairly extreme stuff, but it could well be just what’s required.

According to figures from BTM Consult, which ranks the global turbine manufacturers, Sinovel is struggling to stay in the top 10 of wind turbine businesses by market share.

Like many others, Sinovel is suffering the effects of being overly exposed in the domestic Chinese market. Whilst in the early years the booming Chinese wind energy sector was a closed shop to most foreign owned manufacturers, domestic wind energy firms like Sinovel, Goldwind and Ming Yang were able to divide and conquer.

But with generous support, easy planning, and cash to burn, the market quickly overheated, outgrowing its supporting grid infrastructure. Chinese manufacturers were left holding stock they couldn’t shift. And at present, with the US and European wind markets flatlining, and emerging markets much more of a free for all, there isn’t a new market to shift into quickly.

It’s probably why Sinovel is predicting a loss of $78million for 2012 and this week divulged that because of ‘accounting errors’, profits for 2011 were inflated by 22%.

It remains to be seen whether these restructuring moves can ensure that Sinovel remains as competitive as other Chinese manufacturers, although it’s perhaps unrealistic to assume that the market dominance of Goldwind can truly be assailed.

Restructuring is always a gamble – not only from a market perception perspective, but also on timing. Too soon, and processes won’t be in place to take advantage of new opportunities. Too late, and the opportunities will have been missed.

But with some analysts predicting the Chinese domestic market will rebound this year as Beijing looks to reduce its reliance on imported energy, Sinovel could be taking the gamble just at the right time.

What’s going on over at Sinovel?

The latest announcement from the business tells of large-scale restructuring, culminating in the creation of an ‘international subsidiary’ to serve the global markets.

The parent company will, additionally, be split into four main divisions, focusing on the North-East, North, East and North-West Chinese regions.

Seems like some fairly extreme stuff, but it could well be just what’s required.

According to figures from BTM Consult, which ranks the global turbine manufacturers, Sinovel is struggling to stay in the top 10 of wind turbine businesses by market share.

Like many others, Sinovel is suffering the effects of being overly exposed in the domestic Chinese market. Whilst in the early years the booming Chinese wind energy sector was a closed shop to most foreign owned manufacturers, domestic wind energy firms like Sinovel, Goldwind and Ming Yang were able to divide and conquer.

But with generous support, easy planning, and cash to burn, the market quickly overheated, outgrowing its supporting grid infrastructure. Chinese manufacturers were left holding stock they couldn’t shift. And at present, with the US and European wind markets flatlining, and emerging markets much more of a free for all, there isn’t a new market to shift into quickly.

It’s probably why Sinovel is predicting a loss of $78million for 2012 and this week divulged that because of ‘accounting errors’, profits for 2011 were inflated by 22%.

It remains to be seen whether these restructuring moves can ensure that Sinovel remains as competitive as other Chinese manufacturers, although it’s perhaps unrealistic to assume that the market dominance of Goldwind can truly be assailed.

Restructuring is always a gamble – not only from a market perception perspective, but also on timing. Too soon, and processes won’t be in place to take advantage of new opportunities. Too late, and the opportunities will have been missed.

But with some analysts predicting the Chinese domestic market will rebound this year as Beijing looks to reduce its reliance on imported energy, Sinovel could be taking the gamble just at the right time.

What’s going on over at Sinovel?

The latest announcement from the business tells of large-scale restructuring, culminating in the creation of an ‘international subsidiary’ to serve the global markets.

The parent company will, additionally, be split into four main divisions, focusing on the North-East, North, East and North-West Chinese regions.

Seems like some fairly extreme stuff, but it could well be just what’s required.

According to figures from BTM Consult, which ranks the global turbine manufacturers, Sinovel is struggling to stay in the top 10 of wind turbine businesses by market share.

Like many others, Sinovel is suffering the effects of being overly exposed in the domestic Chinese market. Whilst in the early years the booming Chinese wind energy sector was a closed shop to most foreign owned manufacturers, domestic wind energy firms like Sinovel, Goldwind and Ming Yang were able to divide and conquer.

But with generous support, easy planning, and cash to burn, the market quickly overheated, outgrowing its supporting grid infrastructure. Chinese manufacturers were left holding stock they couldn’t shift. And at present, with the US and European wind markets flatlining, and emerging markets much more of a free for all, there isn’t a new market to shift into quickly.

It’s probably why Sinovel is predicting a loss of $78million for 2012 and this week divulged that because of ‘accounting errors’, profits for 2011 were inflated by 22%.

It remains to be seen whether these restructuring moves can ensure that Sinovel remains as competitive as other Chinese manufacturers, although it’s perhaps unrealistic to assume that the market dominance of Goldwind can truly be assailed.

Restructuring is always a gamble – not only from a market perception perspective, but also on timing. Too soon, and processes won’t be in place to take advantage of new opportunities. Too late, and the opportunities will have been missed.

But with some analysts predicting the Chinese domestic market will rebound this year as Beijing looks to reduce its reliance on imported energy, Sinovel could be taking the gamble just at the right time.

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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.