Gamesa builds electric-car unit to wring profit from wind plants

Gamesa Corp Tecnologica SA, the Spanish wind-turbine maker with factories from China to Brazil, plans to grab a share of the market for electric-car charging as use of the low-emission vehicles expands.

The company is using spare capacity at a turbine converter plant in Valencia to produce car-charging stations, Business Development Director David Mesonero said yesterday. Last month, it bought 20 percent of Madrid-based technology company N2S to gain software that monitors power use by electric vehicles.

Chief Executive Officer Jorge Calvet gave up market share in turbine production to preserve profitability since he took charge in 2009, eschewing the price cuts that forced larger rival Vestas Wind Systems A/S (VWS) to slash jobs. Spanish electric- car sales may reach 5,000 in 2012 from less than 200 in 2011 as rental companies and fleet managers add models, Mesonero said.

The N2S deal is part of a plan to broaden the product range in areas where Gamesa’s technology allows it to compete, he said in an interview in Madrid. “Gamesa has industrial capacity we can’t ignore. The idea is to have synergies from the first minute.”

Profit at the manufacturer, based in Zamudio near Bilbao, probably rose about 27 percent to 63.5 million euros ($81.2 million) last year, according to the median estimate of 11 analysts surveyed by Bloomberg. The stock fell 44 percent as Chinese competitors Sinovel Wind Group Co and Xinjiang Goldwind Science & Technology Co expanded globally.

Vestas probably lost about 41 million euros last year, analyst estimates show.

Churn out chargers

While Gamesa expects a new range of offshore turbines to drive its growth for the next five years, it’s looking to wring more productivity from manufacturing lines, supply chains and sales networks. The Valencia unit employed to make charging stations was built to make converters for wind turbines that generate as much as 4.5 megawatts of electricity.

“The high-speed charger is still 1,000 times less powerful than the converter for our biggest turbine,” Mesonero said. “We can churn them out like donuts.”

Mesonero heads a venture-capital fund at Gamesa that plans to invest 50 million euros of the company’s money over five years. The fund paid 7 million euros for minority stakes in two US companies that make mobile solar generators for use in remote areas beyond the power grid.

Mesonero is also looking for investments in small-scale wind turbines and off-grid renewable power. After studying about 1,000 companies last year, he’s already negotiating with six and expects to agree on three to five deals this year, he said.

Target valuation

Gamesa bought the N2S stake for as much as 5 million euros, Mesonero said. The software company, valued at about 15 million euros in the acquisition, is targeting a valuation of 100 million euros within five years and is studying an initial public offering, he said.

As well as monitoring vehicle power use, N2S’s software can analyze consumption at factories and office buildings and recommend ways to help clients cut their power bills. Gamesa is offering the software to clients bundled with its charging- station product.

Gamesa can afford to wait for the electric-vehicle market to develop because it produces the charging stations using spare capacity that’s already been amortized, Mesonero said.

“There’s going to be a very fast take-off for electric vehicles,” he said. “The question is, when? We can afford to wait.”

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