ENERCON relies on core competencies in Aurich and Magdeburg
Aurich / Germany, 14 August 2020 – ENERCON is planning to restructure its production network in Germany. As part of the new focus on international markets, centres of excellence for nacelle and generator construction are to be developed at the Aurich and Magdeburg sites. Restructuring will take place in close cooperation with ENERCON’s existing production partners. The aim is to integrate some of the responsible external companies into ENERCON during the process of restructuring – including from a company law perspective. ‘We want to integrate production into the core company ENERCON and manage it as an operation of its own in future’, announces ENERCON COO Jost Backhaus. ‘We are seeking talks with the shareholders on this matter. This is a complex project and will take some time, but we are confident that it will be a success. The project is driven by our objective to keep our expertise in the production of our most important key components for ENERCON WECs and put the production sites in Germany in a good position for the future.’
A ‘mechatronics centre of excellence’ is set to be developed for this purpose at the Aurich site in Lower Saxony in the next months. It will pool all of the manufacturing processes and specialist knowledge required for producing machine houses, hubs and electrical components, and will be the primary plant for these main components in ENERCON’s restructured global supply chain. A ‘generator centre of excellence’ is also planned accordingly for the Magdeburg-Rothensee site in Saxony-Anhalt. As the primary generator plant, it will concentrate the specialist knowledge and manufacturing processes required to manufacture ENERCON permanent magnet and separately excited generators.
‘In a way these main components are the heart of any ENERCON WEC’, explains the ENERCON COO. ‘From a strategic point of view, keeping our manufacturing expertise in the long term and ensuring close contact with Research and Development are thus core concerns for our company as it adopts its new focus. We want to remain a technology leader in the future. In order to ensure this, we believe it is crucial that we have direct access to the production processes for the most important main components. We want to establish state-of-the-art manufacturing technology in the centres of excellence, complete with automation and the latest processes and standards. Our vision is that the centres of excellence will become model plants for showcasing high-tech production. This will allow us to safeguard our technological competence and lay important foundations for successful reorientation.’
At the same time, ENERCON has an explicit goal of strengthening its Aurich and Magdeburg production sites for international business with this step. The production processes for the main components and the associated storage and movement of materials are to be optimised at both sites, and synergies capitalised on. ‘The new setup will mean both sites are competitive on a global scale as well’, says Jost Backhaus. ‘We are thus making a contribution to keeping technological competence in the industrial location of Germany.’
ENERCON’s new focus on international markets is the reason behind the intention to reorganise production. The onshore wind industry has been in a tough consolidation process since 2017, which has already affected some of ENERCON’s partner companies as well. Following the collapse of the German onshore market, ENERCON began an extensive restructuring programme that involves focussing on promising international business. It includes a plan to reorganise supply chains, which are undergoing a necessary cost reduction programme with a plan to orient them toward international business. As well as having components produced in target markets to satisfy ‘local content’ requirements, ENERCON is also awarding more production orders to suppliers in ‘best cost’ countries. ‘We have to face up to the costing pressure and the competition and change our focus. That is the only way we can survive in the highly competitive international market’, explains Jost Backhaus.
For these reasons, the plan to integrate production will also involve a necessary consolidation. ‘Major changes will have to be made in individual companies. They will have to actively find solutions to deal with the new situation. Due to the challenging framework conditions, we can in particular no longer afford to have redundant structures in Germany’, says Backhaus. ‘We deeply regret the fact that in the course of reorientation we have to part ways with production partners and suppliers who we can no longer cooperate with in view of the global competition. However, setting up the centres of excellence means we will be able to keep jobs and expertise and reorganise the Aurich and Magdeburg sites for the future. ENERCON grew up here and received a lot of support from politicians and society – we cannot and will not disregard that in our future plans’, reiterates the COO.
‘Onshore wind energy will only bounce back in this country if this support continues in the future. That is why we have always made it clear that we stand by Germany as a location and will try to keep added value in this country to the greatest extent possible during our reorientation’, emphasises ENERCON CEO Hans-Dieter Kettwig. ‘By planning the integration of centres of excellence into ENERCON, we are underscoring our commitment and delivering on our promise to hold on to Germany as a location in future. As a company, we are currently faced with three different sets of demands: we need to adjust to the new framework conditions, we need to react to rapid changes on the market, and we need to manage the impact of the coronavirus pandemic. The fact we are keeping jobs in production and demonstrating stability despite this threefold crisis is something we are very pleased about.’