Wind turbine maker Siemens Gamesa Renewable Energy SA (BME:SGRE) on Monday announced that it will close two factories in Spain and lay off up to 266 employees due to the plants’ lack of competitiveness and new market demand trends.
The decision will affect 215 workers at the factory in Somozas, which manufactures blades for the SG 2.X-114 onshore wind turbine model, and a staff of 51 at the blade repair plant in Cuenca.
Siemens Gamesa said it has no confirmed orders for the 114-metre rotor blades in Spain for 2021 and does not expect that future projects in the country would feature the SG 2.X-114 model as demand for them dried out in favour of larger turbines.
The Galicia region-based Somozas factory cannot manufacture, at competitive prices, blades for larger turbines due to site and logistics constraints, according to Siemens Gamesa.
The Cuenca plant, in the Castile-La Mancha region, will also close the doors due to its inability to survive in a competitive market, as well as a growing trend to replace rather than repair blades, Siemens Gamesa said. Site limitations also prevent the company to make the plant switch to repairing larger blades.
The move is part of the company’s strategy to improve competitiveness, increase profitability and revitalise its onshore business, which has been lagging behind the offshore and the services divisions. Last summer, Siemens Gamesa announced a shut-down of another blade factory in Spain, citing high costs of production and customer demand for larger onshore turbines.
"We urgently need to return to the path of profitability and the only way to do it is by applying measures such as these, and those ones already carried out in our Onshore business in the last year and a half. We have analyzed all the options, but concluded there is no alternative,” SGRE Onshore CEO Lars Krogsgaard said in a statement.
Spain’s central government, alongside the regional governments of Galicia and Castile-La Mancha, issued a joint statement condemning Siemens Gamesa for closing the factories at the time the renewables sector is presented with a favourable regulatory climate to prosper. Highlighting that they stand in solidarity with the plant workers and their families, the governments said they had worked for months with Siemens Gamesa on finding viable solutions for the two facilities, all of which the company rejected.
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