Peter Nyegaard Jensen, Wind Cluster
Release Date: 2009-05-04
What was the market opportunity that you identified and which resulted in the creation of Wind Cluster?I believe there is an excellent opportunity in China for the wind industry at the moment. Historically, we have never witnessed anything like the enormous increase in coal-fired power stations we are currently seeing in China. The Danish Energy Agency, as well as many others, believes these power stations will cause unseen pollution problems for the whole world. China is now responsible for 40% of the world’s coal consumption: more than the United States, the EU and Japan put together. In the last few years, three new coal-fired power stations a week have been opened in China.
The wind industry is going from strength to strength in Denmark. The growth in turnover from 2005 to 2006 was 36%, which equates to a total of €6.5bn in 2006. In 2008 around 25.000 people are working in the Danish wind industry, two-thirds of them working for sub-suppliers. The Danish Wind Industry Association has approx 200 members of which 140 are within one hour’s driving distance from the city of Silkeborg, where we are located, including global leaders in the wind industry such as Vestas, Siemens Wind Power, Suzlon, Gamesa and Nordex. If we deduct the 10 largest manufacturer then the remaining companies in the Danish wind industry typically has around 50 employees.
Wind energy is becoming big business in developing countries as well. The Chinese government has clearly stated its ambition to grow China’s renewable energy sector. As we all know, growth in China happens on a very impressive scale and our very experienced Danish customers to fit easily into this burgeoning Chinese market. Several years ago there was only one local competitor to the large western wind turbine manufacturers in China. Today there are more than 80 wind turbine manufacturers in China. We want to help Danish manufacturers and sub-suppliers reach these new opportunities in China.
What is so unique about Wind Cluster, and how can you help your customers face the challenges of international expansion?
There are obviously many challenges facing European suppliers and sub-suppliers who want to work with the Chinese manufacturers as well as Chinese companies looking to operate in the international marketplace. We think Wind Cluster is the answer.
A cluster is created when companies working within the same field are located close to each other. Research has shown that companies in a cluster gain competitive advantages through effective sharing of knowledge. The Clusters stimulate creativity and innovation, which leads to better financial results. Wind Cluster markets and sells electronics and electromechanical products and services to the global wind industry. By playing a central role in the globalization of sub-suppliers, Wind Cluster will achieve status as the wind turbine manufacturers’ natural supplier of choice for electronics and electromechanical products and services. Wind Cluster will gather small and medium-sized companies with unique products and services as well as growth potential, and facilitate synergy effects in innovation, process competence, and global production. Wind Cluster will take responsibility in the global sales and marketing, presenting products of the participating cluster companies and relevant agencies as one strong identity in the wind industry.
Serving the global wind industry as a one-stop-shop Wind Cluster and its partners make it easy to do wind business. We will actively participate in the needed maturing and consolidation of the wind industry. We realize that being a market leader - now as well as in the future - requires not only world-class technology and top quality but also constant improvements in logistics, service, global presence and competitiveness in general.
We have offices in Silkeborg in Denmark as well as in Beijing, and plan to establish ourselves in the US and India in the coming year. To our clients, we offer global sales channels and a presence on all markets. Also, we can help SMEs to kick-start production and sourcing from countries that offer low-cost labour. Working with us will help a company develop synergy effects within the industry, while also playing a part in the consolidation of the industry. This is a unique opportunity for small and medium sized sub-suppliers to become a vital part of our partnership.
What are the development ambitions of Wind Cluster developing? In addition to taking Danish manufacturers to China, will you also be bringing Chinese wind turbines to Europe in the longer term?
I don’t think that we will go into bringing the turbines to Europe, but I definitely see us as a one-stop shop. We want the production engineers and purchasers of wind turbine manufacturers who are looking for certain components to think first of Wind Cluster. Of course, whether the requested components are coming from Europe, China, or India, we should have the portfolio. I am quite sure there will be more Chinese and Indian wind turbine manufacturers and suppliers in the near future. European companies operating in China and India need to pay attention to this fact: they should not only be looking to sell in those countries, but they should be paying attention to the market, looking out for these newcomers in sub-supply in China, because eventually they will be competing with them for contracts with the European turbine manufacturers. Of course, our company is focussed on sales, but we also have great market knowledge to offer our customers.
When you walk into the offices of a wind turbine manufacturer for the first time how do you ensure that their first impression will not be that you are just another sales representative. How do you convince them that Wind Cluster is something different?
All of these companies are looking for solutions to problems, such as dealing with obsolete components and constantly changing markets. Even if we can’t offer a solution to a particular problem immediately, we can check our network, and usually come back with a solution in 48 hours. Not all of these customers will become long-term contracts: sometimes they are simply looking for a one-off solution and that is fine with us. Business like this keeps our wheels turning, and earns us a good reputation at the same time. We don’t have clients representing the complete portfolio of components yet within Wind Cluster, but this gives us a bit of flexibility with those companies that we haven’t signed up yet. Once we sign an agreement with one component manufacturer, we have to be loyal, and cannot sign up his competitor.
Isn’t your service just seen by the large turbine manufacturers as an unnecessary additional expense?
I don’t think so. We make it very easy to gain access to components, and we have constant access to our people in all relevant markets. All our teams are experienced in the wind business – we have heaps of contacts, and if we don’t have a solution ourselves, we know where to find it. We also manage the logistics supply chain, so if a Chinese manufacturer wants to order several different components from Europe, we can organize all this for them and ship the components together in one package to China. This saves the companies who don’t have much experience in Europe a lot of hassle. We facilitate production, and that is what makes our company interesting even for large manufacturers.
How are you marketing Wind Cluster at the moment?
Marketing is an important thing. We have already participated in exhibitions in cooperation with the Danish Export Organization. We also do our own marketing. The intention is to participate in three or four exhibitions with the Danish Export Organization in the near future. For EWEC 2009 in Marseilles, we had a large booth in the main hall, putting Wind Cluster right next to all the big players in the sector.
In October 2009 we will exhibit in Beijing.
We’ve spent a lot of money on our branding, trying to get the right image out for wind cluster.
How much time do you spend in China?
I went there very often is my past position as Vice President for a large sup-suppliers for the wind industry.
Since starting Wind Cluster I have visited China several times. Initially I didn’t go to China to sell, I was going mainly to establish the company and find the right people there. Now having distributor and agency agreements with approximately 20 sup-suppliers and having the sales organization in place we have launched the sales in full-scale and my last visits for China have mainly had focus on sales and supporting our costumers in China.
There are currently over 80 wind turbine manufacturers in China, and there their number is still growing. How many do you hope to be servicing in 2 years time?
Quite a high percentage of them. We can help these companies to establish their supply chain and find them the right sub-suppliers . Of course, there are also big players in China like Dong Fang, Sinovel and Goldwind, which have well-established supply chains, but there are many newcomers which still are logistically limited.
But even the large manufacturer in China could trough Wind Cluster find a much more efficient access to European components and I would be happy to explain to even large manufacturer how we can add value.
I don’t think we need to worry about concentrating in one area of the Chinese market. We cover the entire value chain and working with 80 wind turbine manufacturers is not impossible. It only means 80 purchasing managers. I don’t think we have to limit ourselves yet.
What would be your final message to the Chinese wind industry?
You should consider our one-stop shop when you’re looking to gain knowledge or solve a problem, call us. We can help you to mature your business.
| Company: | Wind Cluster |
| Position: | CEO |
| Country: | Denmark |