Wind energy in China: Vestas terminates the production at its Hohhot factory

On the basis of thorough internal analyses, Vestas projects a low market demand for the kilowatt platform in the coming years. Therefore, Vestas has decided to phase out the production of the kilowatt platform, including the V52-850 kW and V60-850 kW wind turbines.

Consequently, Vestas will terminate the production at its factory in Hohhot, China, where 300-350 employees will be made redundant.

Vestas will honour all firm sales commitments for kilowatt turbines and make sure that any ongoing negotiations for kilowatt orders will be finalised considering the customers’ needs and Vestas’ profitability. Servicing the kilowatt platform will remain an important business for Vestas and we will continue to offer comprehensive service solutions to the owners and operators of the kilowatt turbines.

Vestas remains firmly committed to China and has confidence in China’s long-term growth in the wind energy industry in spite of the termination of the production at the Hohhot factory. The optimisation of Vestas’ overall business will bring the total number of employees in China to approx 2,600, spread across two production bases in Tianjin and Xuzhou and two offices in Beijing and Shanghai, respectively.

The termination of the production at the Hohhot factory will come into force over the summer and will lead to annual savings of around EUR 10m. The cost of closing the factory is covered by the 2012 guidance for special items of EUR 50-100m.