3 Aug 2020
EUR 60 million
Industries and services
As a result of rising fossil fuel prices and growing global environmental concerns, the Finnish manufacturer Moventas is rapidly expanding the production of its wind turbine gears. NIB has been able to facilitate this growth.
Moventas is one of the world's leading suppliers of mechanical power transmission equipment for the energy and process industries. Part of the company's success is built on its commitment to maintenance and after-sales service of its specialised gear mechanisms. The wind turbine gearbox that Moventas produces transforms the slow turning of the turbine's blades to the faster rotor speed needed to generate electricity.
Viable energy source
"Wind power has come of age. Once oil prices hit USD 50 per barrel, then wind as an energy source becomes viable. We are well beyond that price now and demand for our products is very strong," says Veli Kronqvist, Moventas's Chief Financial Officer.
Globally, wind power generation increased more than fivefold between 2000 and 2007. Industry experts predict that if this pace of growth continues, by 2050 the answer to one third of the world's electricity needs may be found blowing in the wind.
"The world has only seen the beginning of wind energy production. Last year one percent of the world's electricity came from wind. It is estimated that in 2020 the amount will be 6-7%. This requires very substantial investments in wind energy production capacities," Moventas's President Ilkka Hakala comments.
Wind energy is plentiful, renewable, widely distributed, clean, and reduces greenhouse gas emissions when it displaces fossil fuel-derived electricity. Operation does not produce carbon dioxide, sulphur dioxide, or any other type of air pollution.
Of all the renewable energy technologies, wind power is currently the most cost-competitive when compared to traditional, fossil fuel-based energy production technologies.
Moventas technology has been contributing to the rapid growth of the industry in Europe and wind power now accounts for approximately 19% of electricity production in Denmark, 9% in Spain and Portugal, and 6% in Germany.
NIB loan to facilitate growth
NIB has been able to facilitate growth at Moventas with a loan of EUR 40 million, as part of a senior syndicated loan agreement. The loan is being used for investment in a new wind turbine gear manufacturing facility in Jyväskylä, due to be completed in late 2008.
"This loan fits within our strategy really well," says Kim Krokfors, Senior Manager at NIB. "It's a good example of a project that strengthens our client's competitiveness and enhances the environment. The project raises the company's output and improves its market position by furthering its business process."
The new capacity doubles Moventas's wind turbine and industrial gear production. Moventas employs almost 1,300 people at twelve locations in Finland, Sweden, Germany, Canada, China, the USA and Singapore.
"By increasing the supply of gearboxes—one of the bottlenecks in today's wind turbine industry—Moventas's investment raises the potential production capacity of renewable energy from wind power," says Mr Krokfors.
Moventas is now positioned to capitalise on the global expansion of wind power, with the reliability of its gear systems a key selling point in an increasingly competitive market.
"Remember, our gears weigh at least 20 tonnes and sit at the top of a 100 metre-high tower, so reliability is crucial. Our products are designed to run virtually maintenance-free for years and years," Mr Kronqvist notes .
Although most of Moventas's business is currently in Europe and USA, the company is set to expand into huge new markets in China and India.
"Maintaining our leading market position means that we need to grow, especially globally," says Mr Hakala.
Moventas is aware that making the best of the favourable business climate for wind power generation technology means ensuring that current investments are effectively implemented throughout the organisation. Hitting or exceeding ambitious growth targets in the future means having the right staff to produce the highly specialised products the company is famous for, according to Mr Hakala.
"Due to our ambitious investment programmes, we will need more personnel in the years to come. So far, we have ensured growth by successful recruiting. For example in 2007, we recruited more than 170 new members to our team. In 2008, the number is estimated to be more than 300," he concludes.