CS Wind acquires US wind tower factory from Vestas at $150 mn

South Korea’s wind tower manufacturer CS Wind Corp. has acquired full ownership of the world’s largest tower manufacturing facility located in the US.

CS Wind on Jun. 3 signed a deal with Denmark’s wind turbine maker Vestas Wind Systems A/S to buy a 100% stake in Vestas’ wind tower factory at $150 million.

Established in 2009, the factory located in Colorado annually manufactures over 3,000 tower segments worth around 300 billion won ($269 million).

“The US factory is expected to create an annual revenue of 1 trillion won ($895 million) after it completes capacity expansion by 2023,” said CS Wind Chairman and CEO Gim Seong-gon.

CS Wind currently operates factories in China, Malaysia, Taiwan, Turkey and Vietnam. It said that the acquisition will be an important springboard for its expansion in the US market. The company last year exported 173 billion won ($155 million) worth of wind towers to the US from its Malaysia factory.

“President Joe Biden said that the US will install 60,000 made-in-America wind turbines within his tenure. His statement and relevant tax benefits will fuel the demand for wind towers to soar in the country,” said Gim.   

A typical wind power generator consists of three parts: wind turbine, which transforms wind energy to electricity, tower and blades.

CS Wind is the industry leader in the global wind tower market.

CS Wind recorded a revenue of 969 billion won ($867 million) last year, up by 21.2% from 2019 at 799.3 billion won ($715 million). Its operating profit saw a higher growth, rising by 62.2% from 60.1 billion won ($53.8 million) in 2019 to 97.5 billion won ($87.2 million) in 2020.

The company’s 2021 performance has stayed strong so far as well. In the first quarter of this year, CS Wind made a revenue of 242.1 billion won and an operating profit of 31.6 billion won.

“We supplied more than 12,000 wind towers in the last 17 years to clients all over the world. None of them fell down yet. Based on our advanced technology, attention to detail and price competitiveness, we are set to achieve a 3 trillion revenue in 2024,” said CS Wind CEO.

LONG-TERM SUPPLY AGREEMENT WITH VESTAS

CS Wind and Vestas also signed a long-term supply deal on the same day.

Under the agreement signed in Seoul by Gim and Vestas CEO Henrik Andersen, CS wind will be supplying 1.5 trillion won ($1.34 billion) worth of wind towers to Vestas from July this year to June 2026. The wind towers will be manufactured at the US factory that CS Wind has just acquired.

CS Wind says it also targets to increase the volume sold to other major wind energy firms such as Siemens AG and General Electric Co. (GE). The South Korean company currently relies heavily on three major clients, Vestas, Siemens and Nordex SE, which account for 70% of its revenue.

“Our new US factory will add an immense financial value once we start supplying the American-made wind towers to clients other than Vestas,” said Gim.

Write to Ji-hye Min at spop@hankyung.com
Daniel Cho edited this article.