Spanish turbine maker Gamesa sees Brazil as a key source of growth

After opening a subsidiary in Brazil earlier this year, Gamesa Corporacion Tecnologica is planning to build a new factory in the country that will supply the world’s fastest-growing market for wind energy. According to Bloomberg, the company aims to make locally a significant number of the 129 turbines it will provide to Iberdrola SA for nine Brazilian wind parks planned by 2012, said the person, who asked not to be named because the plan isn’t completed. The contract with Iberdrola is Gamesa’s first in Latin America’s largest economy. The factory could be expanded to supply others, the person said.

“Gamesa’s strategy of diversifying to new emerging markets such as Brazil is beginning to bear some fruit,” said Rupesh Madlani, a renewable energy analyst at Barclays Capital in London. Still, “it would be premature to add fixed costs to serve a particular market until there is significant long-term visibility on demand.”

Gamesa, based in Zamudio, northern Spain, sees Brazil as a key source of growth as it looks to reverse a plunge in the company’s share price, the person said. Brazil’s investment in new turbines will increase by an average 40 percent a year through 2013, according to analysts at Bloomberg New Energy Finance in London.

Australia will be the second-fastest market, growing at 32 percent pace. China will increase 12 percent a year, and U.S. investment is seen slipping 3 percent annually, New Energy Finance estimated.

A Gamesa spokeswoman, who declined to be named in line with company policy, said the company is analyzing the possibility of establishing a more significant presence in Brazil.

Shares in Gamesa gained as much as 1.4 percent in Madrid trading after the news and closed at 5.417 euros, up 0.2 percent, leaving this year’s decline at 53 percent.

Gamesa last month announced it will supply 102 megawatts of turbines to a wind park in Honduras over the next 18 months.

Source: Ben Sills in Madrid at bsills@bloomberg.net

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About Hildete Vodopives

Hildete de Moraes Vodopives is founder of Brazil Global and of the Harvard Strategists. She is a member of the Brazilian Investment Analysts Association (APIMEC-Rio) where she served as Corporate Relations Director and later, on the board. Hildete advises companies doing business in Brazil.
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