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INTERVIEW-Germany's Senvion eyes new markets in expansion drive
August 25, 2015 / 2:29 PM / in 2 years

INTERVIEW-Germany's Senvion eyes new markets in expansion drive

* Company looking at Peru, Chile, India -CEO

* Decision depend on products, local regulation -CEO

* Global wind demand to grow by 4 percent in 2015

By Christoph Steitz

BERLIN, Aug 25 (Reuters) - German wind turbine maker Senvion, which was snapped up by buyout group Centerbridge Partners in January, could expand into new markets such as Chile, Peru and India as part of its drive to grow sales and improve margins, its chief executive said.

“Why has Centerbridge decided to buy us? Because we’re a successful company with growth potential,” Andreas Nauen told Reuters in an interview on Tuesday, adding the group was currently discussing which markets to enter.

Wind turbine makers have emerged from years of losses and overcapacity, as governments around the world pick the technology to reach their renewable targets.

Like solar, the wind sector largely depends on government subsidies, making it vulnerable to sudden policy swings, such as the one in Britain, which in June said it would scrap all new subsidies for onshore wind farms from April next year.

Demand is expected to grow by 4 percent to 53.5 gigawatt this year, according to trade association Global Wind Energy Council (GWEC).

Senvion’s core markets include Germany, where it makes nearly a third of its sales, as well as France, Canada and Australia. It also sells its turbines in other markets, including the United States, Turkey and Japan.

But with China, the world’s biggest wind turbine market, being effectively closed for foreign producers, European makers of the technology, including Senvion, have to look for growth elsewhere.

“In India you will see a continuous rise in power demand,” Nauen said, adding that picking new markets could take up to two years, due to local regulation, product mix as well as macroeconomic factors.

Formerly known as REpower, Senvion was sold by debt-laden Indian peer Suzlon for 1 billion euros ($1.15 billion) earlier this year, a change of ownership that has given Senvion the space it needs to thrive, Nauen said.

“People have stopped asking the question whether or not we will survive,” he said.

Senvion, which competes with German peers Nordex, Enercon and sector leader Siemens, grew sales by 6.6 percent to 1.93 billion euros in its fiscal year 2014/2015, which ended in March. Its operating margin rose to 4.6 percent, up from 3.4 percent in the previous year.

For the ongoing year, the group targets sales of 2.05 billion euros and operating profit of 110 million, with a possible deviation of 10 percent for both.

$1 = 0.8709 euros Editing by William Hardy

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