Portugal's Martifer Group, a one time steel construction specialist, is busy establishing itself as a key wind industry player, both as an equipment supplier and a project developer. Alongside its part ownership of German wind turbine manufacturer Repower, the company's energy generation subsidiary, Eviva, has a wind project pipeline of well over 1000 MW up to 2012 spanning the US and Europe, including its home country. Indeed, the move into renewable energy has resulted in annual growth rates of 30% for a company founded in 1990 by brothers Carlos and Jorge Martins, which moved into the wind business in 2004.
Full year revenues for 2007 look set to hit EUR 500 million, double that for 2006, the company says, with more "substantial growth" for sales in 2008 "based on the estimated growth in the metallic construction business." Much of the growth will come from its international activities. The energy systems division (wind and solar power) is driving the expansion. It will see first revenues from its electricity generation division this year from recently acquired wind farms. The biofuels division is also seen as a significant contributor to the expected growth.
To pay for it all, the company launched an Initial Public Offering on the Euronext Lisbon stock exchange in June 2006, with 25% of its shares now traded on the market and the rest equally split between the Martins brothers and building firm Mota-Engil.
In the immediate future, it is the United States that is set to become a main hub of company activity. Eviva has joined forces with US Spinnaker Wind to develop some 800 MW of Texas wind power by 2012 (page 18). The two companies have formed Eviva Spinnaker Energy LLC to own and operate the projects, with Eviva owning 90% and San Diego-based Spinnaker retaining 10%. Eviva Electricity is co-owned by US investor Clean Energy Ventures, which has a 10% stake in the company. "Of these projects, 260 MW are already in an advanced development stage and we hope they enter into function during 2009," says Martifer's Monica Alves. "We are continuously following new opportunities, hoping to realise similar development agreements in this enormous market."
The Suzlon link
Martifer hit the limelight in the wind business last year when it gave its support to India's leading turbine supplier, Suzlon, in that company's successful battle to take over control of Repower last year (“uåX˜äŠÊ˜·³Ç, June 2007). The join-up with Suzlon could prove to be a winning strategy for the Portuguese company on several fronts. With its balance sheet set to be boosted by at least EUR 270 million within the next eighteen months -- thanks to an agreement with Suzlon that gives it first option at that price for Martifer's 23.08% stake in Repower -- Martifer is well positioned to flex some muscle.
"By May 2009, we will sell our share in Repower Systems," says Alves, although she notes the sale will not bring the relationship with Repower or Suzlon to an end. Martifer, which first acquired its share in Repower in 2005, owns half of Repower's Portuguese wind turbine manufacturing business, Repower Portugal.
"We are currently developing an investment plan for the manufacturing of components for wind power plants, namely a unit for the assembly of turbines, a factory of rotor blades and increasing the installed capacity in the tower factory," says Alves. The tower plant is near Martifer's headquarters in Portugal's Vilarinho industrial area in Oliveira de Frades. From here it supplies many of the major turbine suppliers, including Repower, GE Energy, Nordex and Vestas.
Component production in India is also being considered -- and possible wind project development. Martifer's Carlos Martins has said in recent television interviews that the company's forecasts for 1200 MW of installed wind capacity by 2012 -- which alone can be reached by completion on schedule of Martifer projects in Texas and Portugal -- could well be surpassed, largely in expectation of an ongoing good relationship with Suzlon. Last month, Martifer publicly confirmed that discussions are taking place "regarding the setting up of a joint venture with the Indian group Suzlon Energy Ltd concerning the metallic construction business for the Indian market." Suzlon is by far the leading wind turbine supplier in India, where demand from private sector industrial companies anxious to secure their own power supply is set to remain high. The company also has ambitious plans for China.
Into eastern Europe
Outside of its home market and Spain, in Europe Martifer's emphasis on developing wind projects is on eastern European countries, including Poland, Romania, Slovakia and Ukraine. The eastern Europe penetration is modest so far, however, with firm plans for no more than 28 MW in Poland and 50 MW in Romania. Repower and Suzlon are supplying the turbines. Martifer also became an owner of operational wind plant at the end of last year with its purchase of two developments in Germany with a combined capacity of 53.1 MW from subsidiaries of the Macquarie Group.
Portugal, however, remains by far its strongest European market for the time being. Martifer is a 33% shareholder in Ventinveste, a Portuguese consortium developing eight wind projects with a combined generating capacity of 400 MW. Ventinveste is owned 35% by energy company Galp Energia, 30% by wind developer Enersis, 2% by Efacec and 1% by Repower. The concession contracts for the eight projects were awarded by the Portuguese government last year (“uåX˜äŠÊ˜·³Ç, August). Installation of the first turbines is to start in 2009 with all 400 MW to be up and running by 2013.
Martifer, as a member of the winning consortium for the government tender, is not only delivering the turbine towers but also helping with turbine assembly -- yet another reason for the need to expand manufacturing capacity. "The most relevant investments regard the assembly unit for turbines, with a capacity for 260 MW a year, and a blade factory, for 267 units a year, as well as increasing the installed capacity of the tower factory from 120 to 400 towers a year," says Alves. "Besides industrial investments, the consortium will invest an additional EUR 520 million in the project."
New link with EDP
Meanwhile, Martifer is also set to work with Energias de Portugal (EDP) under an agreement signed in December to explore joint development opportunities. "The cooperation will regard onshore wind power projects in eastern Europe, offshore wind power in Portugal, hydro power development projects, and new development projects in the areas of micro generation, hydrogen fuel cells and biomass," says Alves. "The memorandum of understanding also contemplates the possibility of EDP acquiring from Martifer wind turbines and solar equipment under preferential conditions."
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