Daewoo Shipbuilding seeks 30% of sales from wind power by 2020

www.bloomberg.com
Aug 25, 2010

Daewoo Shipbuilding & Marine Engineering Co., the world's second-largest shipyard, aims to generate 30% of its sales from wind power by 2020 as pollution concerns spur demand for alternative energy.

The company expects to generate as much as 9 trillion won ($7.5 billion) in wind-power sales in 2020, from about $25 million this year. Chief Strategy Officer Koh Young Youl said in an interview in Seoul. The company earned 99% of its revenue from building ships and offshore equipment last year. "It's a very ambitious target and it won't be easy", Koh said yesterday. "Still, the market potential for wind power is very big, partly because there's a lot of interest in going offshore as the space on land runs out".

Daewoo, which already makes turbines, may also run wind farms, build vessels for installing offshore units and open a generator factory in China as Korean shipbuilders seek new businesses to meet competition from Chinese yards. Wind-power capacity worldwide may rise 21% a year through 2014, according to the Global Wind Energy Council. "It is our plan to eventually be able to provide a full chain of services for wind power -- from making turbines to operating mills", Koh said. The Seoul-based shipyard is developing its first offshore wind turbine, he said.

China Wind Power
The company plans to select a site for a factory in China, the biggest market for wind power, by year-end. Koh said. The Asian nation plans to install wind capacity of 100GWs by 2020 to help reach a goal of generating 15% of primary energy without using fossil fuels. "We expect demand for wind turbines to grow as there are still a lot of places in China that need power", Koh said. The company will use locally made parts at the plant and it may also help its suppliers set up factories, he said.

China spent $34.6 billion on clean-fuel projects last year, almost double the $18.6 billion invested by the US, according to estimates from Bloomberg New Energy Finance. Daewoo rose as much as 1.8% to 22,400 won and was at 22,150 won at 10:43 a.m, in Seoul. The benchmark Kospi index was down 0.8%. The stock has gained 27% this year, outperforming the Kospi's 3.8% gain.

The company is considering plans to set up its own wind farms in Europe and North America. Koh said. Hyundai Heavy Industries Co., the world's largest shipyard, announced plans to build a wind farm in Pakistan in January. Daewoo bought DeWind Inc, for about $50 million from Irvine. California-based Composite Technology Corp, last year to access wind farm technology and a turbine factory in the US The company may build units at a shipyard venture in Romania, depending on demand in Europe. Koh said.

The shipbuilder's wind-power sales may reach $800 million in 2012. Koh said. The company in January said the company's sales will likely reach 12.4 trillion won this year.