* Kron prefers organic growth for wind business
* Remains open to deals
By Elena Berton
PARIS, March 20 (Reuters) - He pulled Alstom from the verge of bankruptcy and turned it into a profitable business, and now Chief Executive Patrick Kron is betting offshore wind power can be a key growth market for the French engineering giant.
Playing down speculation that Alstom could be eyeing potential takeovers in the wind sector, the 58-year-old Kron wants to make it clear he’s not rushing into deals.
“We are open to opportunities in this field, but we will see,” Kron told reporters at an event on Monday to inaugurate Alstom’s first offshore wind turbine in Carnet, north-western France. “Our strategy [for wind power] is based on organic development, on the work of our engineers.”
Wind generators are a relatively new business for Alstom, a group with annual sales of more than 20 billion euros ($26.48 billion), which produces TGV and Eurostar trains, builds turbines for power stations and built the Queen Mary 2, the world’s largest ocean liner.
Alstom, along with French utility EDF’s unit EDF Energies Nouvelles, is part of one of three consortia bidding to build France’s first offshore wind parks, massive projects with as many as 600 turbines and three gigawatts of capacity in a 10 billion euro first phase off the Normandy and Brittany coasts.
A successful bid would be an important step for Alstom, whose rail business has lost some high profile contracts in recent months.
“If they win this tender, it would be the biggest order Alstom has seen in a long time,” said Bernstein analyst Martin Prozesky.
Kron was the mastermind behind Alstom’s entrance into the wind power market five years ago with a relatively small deal: the 350 million euros takeover of Spanish onshore wind turbine maker Ecotecnia.
At the time, Kron said the price tag of larger wind power specialists offered limited value-creation for Alstom, hence his choice of a smaller, but established player that he could develop slowly but successfully.
His persistence appears to have paid off. Using the technical know-how of Ecotecnia, Alstom has developed Haliade 150, its first offshore turbine and the world’s largest, with a diameter of 153 metres, roughly half the height of the Eiffel tower.
Offshore has become a promising market as several European countries as well as the United States and China increasingly turn to this type of renewable energy because turbines are less obtrusive than on land and the average wind speed is considerably higher over open water.
By developing offshore and keeping the wind unit small, Kron hopes to avoid pitfalls suffered by rivals like Vestas, which have been hit by overcapacity and sliding turbine prices.
“For wind, we have an organic growth strategy. We know that by starting small we will remain small ... but it won’t be a disaster if we are a profitable small player,” Kron said.
Kron’s reluctance for larger, riskier deals harks back to when he took the helm of Alstom in early 2003, the darkest period in the company’s history which ended in a 2.5 billion euro government rescue the following year.
“I probably underestimated the problems or overestimated my skills, but I accepted the job,” Kron said in a speech in 2007.
Still, Kron’s knowledge of the heavy industry sector - he previously had senior executive roles at French aluminium conglomerate Pechiney and mining specialist Imerys - helped turn around Alstom.
The son of Polish immigrants who fled communism after World War II, Kron studied at the Ecole polytechnique and Ecole des Mines in Paris - both elite schools whose graduates typically go on to top government or corporate jobs - before starting his career at the French industry ministry.
After taking the reins at Alstom, Kron promptly slimmed down the company to raise cash, selling several units, including the shipbuilding operations that had built the Queen Mary 2.
By 2007, a healthier Alstom began looking at small-to-medium sized acquisitions to open up new growth avenues, particularly in energy, but Kron remained firmly focused on growing the business organically. He says this view remains unchanged.
Associates describe his no-frills, pragmatic approach to business as “Anglo-saxon.” That’s true in his private life too, where he eschews the social circuit in favour of baroque music, playing golf and spending time in his holiday home on the Greek island of Paros.
Despite leading one of France’s 40 largest companies and being close to French President Nicolas Sarkozy, he still regards his role with ironic detachment.
He once quipped in an interview that he would opt for a different career if he lost his 2.2 million euros job at Alstom.
“If one day I get fired by Alstom and the European Commission needs an interpreter who can speak Polish and Greek, maybe I would get my chance.” ($1 = 0.7552 euros) (Editing by James Jukwey)