Vestas continuously looks for partners that can support its strategic focus on core business and help scale renewables efficiently in the long-term. To continue this development, Vestas has signed an agreement with KK Wind Solutions (KK) for the acquisition of Vestas’ converters and controls business, which includes Vestas’ three converters and control panels factories in Denmark, India and China and associated staff functions. In total, around 600 Vestas employees are in scope for being part of KK.
As part of the agreement, KK will exclusively supply converters and control panels to Vestas from the three factories, while the agreement enables potential for local expansion and job growth by extending the use of converter technologies in areas adjacent to Vestas’ core business. Furthermore, the agreement between Vestas and KK includes joint development of converters with an engineering team at Vestas fully dedicated to the partnership. The agreement builds on years of collaboration between KK and Vestas, most recently exemplified by localisation of offshore power conversion modules and low voltage cabinets in Taiwan.
“Across our global supply chain footprint, we are increasingly collaborating with partners to scale efficiently and build on the foundations we have established. This includes focusing our own resources to where they are most efficient and moving parts of our business to be run by other industry leaders who can create more value and secure additional long-term jobs. I’m therefore very excited about the agreement with our partner KK Wind Solutions, which can help grow and mature the wind energy supply chain,” says Tommy Rahbek Nielsen, Executive Vice President and COO at Vestas.
“As an established partner to Vestas, we aim to take a leading role in maturing the industry’s supply chain and accelerate the green energy transition. The acquisition will bring immediate scale to our operations and extend our global footprint, while adding new competencies by welcoming over 600 highly skilled and experienced employees. As a result, we will be well-positioned to develop and deliver world-class sustainable energy solutions to top tier wind OEMs and expand further into adjacent industries, such as Power-to-X,” says Mauricio Quintana, Chief Executive Officer, KK Wind Solutions.
Vestas’ converter and control panel factory in Hammel, Denmark employs around 280 people and Vestas’ converter factory in Oragadam, India employs around 50 people. In addition, Vestas owns a nacelle and hub assembly plant next to the converter factory in Oragadam, which will continue its operations as today. Vestas’ converter factory in China employs around 220 people and is part of Vestas’ manufacturing compound in Tianjin.
The transaction is expected to close in the first quarter of 2023, subject to receipt of approvals from the relevant regulatory authorities and separation of the converters and controls business, at which point the transaction will be reflected in Vestas’ financial accounts.