Embattled Danish blade maker LM Wind managed to keep its 2009 revenue decline down to just 12%, after laying off more than 1,300 mostly European workers and trimming fat throughout the company.
Last week the firm, based in the Danish seaport of Kolding, announced that it has changed its name from LM Glasfiber, which it has gone by since being founded in 1978.
Revenues fell to €777m ($1.02bn) from €885m last year, but the drop would have been steeper if not for the inclusion of Svendborg Brakes, which makes yaw and rotor-brake systems for the wind business, and was acquired by LM Wind in July 2009.
Its operating profit tumbled to €52m from €91m, which chief executive Roland Sundén blames primarily on the softening of the European wind market.
“For a number of years, the wind power components business was very much a seller’s market,” Sundén says. “The situation is now fundamentally different, partly due to a changed demand-supply balance, as well as the entry of new industry players.”
LM Wind’s decision in 2009 to shift the bulk of its production from Europe to Asia, including shutting two factories in Denmark and one in Spain, drew heavy criticism from Danish politicians. It fired 420 employees in January 2009 and then cut another 900 jobs in November.
“We need to increase capacity where there is a high demand and high potential, and scale down where demand has dropped due to the global crisis – which is, sadly, the case in Europe,” said chief financial officer Iain Gow at the time.
Only two weeks ago the firm announced it would open its fourth blade factory in China, following on the heels of others opened in 2001, 2007 and 2009.
Initial production at the facility will be tailored for upstart Chinese turbine maker Envision, with whom LM Wind has a 2-gigawatt supply contract. Its Envision contract comes on top of another multi-gigawatt deal it has with China’s second-largest turbine maker, Xinjiang Goldwind.
“The advantage of an expanding global footprint was clearly visible [in 2009] as the European market stagnated, with a slight decrease in gigawatt terms,” chief executive Sundén says. “Elsewhere in the Americas the market grew at a modest rate, while outstanding growth was seen in China.”