Albert Sunyer
Country Manager Mexico
The Nordex Group
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View from the Top

Manufacturing in Mexico as a Must

Tue, 03/10/2020 - 15:17

Q: What competitive advantages does the Nordex Group has over its competitors in the market?

A: By combining Nordex turbine technology with a concrete tower developed by Acciona Windpower, or by substituting lighter but expensive optic fiber blades with Acciona Windpower materials, we can deliver a more competitive product. The market response has been good because our products adapt to the sector’s needs, which results in reduced generation costs. When a company cannot deliver the energy costs that a client expects because the product does not perform as it should or cannot achieve a specific maximum capacity, the only way to stay competitive is to reduce the price. In this case, the market is demanding this reduction given the aggressive energy prices in the previous auctions. For instance, in 2018, we enjoyed a great deal of commercial activity but margins were narrower. This is happening not only to our company, but to all turbine manufacturers in the market. For our company, we are now in a phase where we can develop products that deliver lower energy costs, but which lead to a more profitable business.

 

Q: To what extent is the company introducing local manufacturing?

A: Manufacturing in Mexico is a must. If a company wants to increase its profit, manufacturing locally is the answer. At the moment, the Nordex Group and our two main competitors are the only players that provide this service in Mexico. This includes our development of the company’s first facility globally that manufactures blades from both Nordex and Acciona Windpower technologies. Even though Mexico represents a strategic location, the goal is to become a manufacturing point on a global scale. The new plant is located in Matamoros, Tamaulipas. It will have a 1GW capacity and export products to Mexico, the US and the rest of the world.

In addition to blades, we also manufacture concrete towers locally. In Mexico, we have a significant advantage because the material is produced locally. From an economic perspective, concrete is less volatile than steel because it is easier to forecast its price. Also, this material becomes very competitive up to 100m heights, which are the operating conditions in Tamaulipas. Concrete needs to be produced in situ and given that we have a local partner that manufactures these towers in Nuevo Leon, the logistics synergy is perfect.

The manufacturing of a wind turbine is quite complex, but it makes a lot of sense to produce components such as towers and blades in the country.

 

Q: What was the main driver behind locating the Nordex Group world’s first manufacturing plant for both platforms in Tamaulipas?

A: In 2007, Acciona Windpower built its first wind farm, located in Oaxaca, where the company started its first projects in Mexico. Since then, the company that later merged with Nordex Group has reached a capacity of 1,250MW, proving that there is a significant market demand here. With the addition of the current project in Tamaulipas in our pipeline, the Nordex Group will have 1,500MW of installed capacity by the end of 2019.  Only in 2017, our worldwide order intake totaled 2.7 GW and a year later we sold 4.7 GW. If you want to sell 4.7 GW, you need more industrial capacity than you had previously. The plant was built because the market demanded more capacity. Our Matamoros facility will be at full capacity between 2019 and 2020.

We decided to locate our plant in the northeastern part of the country because our product mainly fits into this region. Apart from that, the US is a highly demanding market and developing our business in another region would not allow us to seize the full potential of this opportunity. Matamoros provides the proximity that allows exportation activities.

 

Q: What are the company main short-term objectives?

A: In the past year, given the uncertainty in the industry, our focus was mainly directed to the bilateral market, where we are managing large project proposals, mainly under the PPA scheme. When the latest auction was canceled, it did not have an impact on our short-term operations.

We are focusing on the projects that we already have, which is critical as we position our company as the country’s leading manufacturer. We know the projects that are in the market and the type of scheme under which they will work. In the next three years, we expect to increase our market share significantly. Having a manufacturing plant that promotes the company’s sustainability, ensuring long-term contracts, and providing O&M services are our main focus for now.

The Nordex Group is one of the world’s largest producers of wind turbines. Nordex and Acciona Windpower’s merger was finalized in April 2016, combining decades of experience in design, construction and operation of wind turbines.

The Nordex Group is one of the world’s largest producers of wind turbines. Nordex and Acciona Windpower’s merger was finalized in April 2016, combining decades of experience in design, construction and operation of wind turbines.