Setting sights: Brazil?

Plans by Vestas to open up a plant in Brazil largely crept under the radar this week, but it’s an interesting decision and one worthy of further investigation.

A BRIC cornerstone, Brazil represents much that is favourable about investing in emerging markets, particularly in renewables. Despite the fact that wind energy currently represents only 1% of installed energy capacity in the country. With Government plans, however, to diversify energy generation away from hydro power, currently the mainstay, Brazilian wind power is expected to grow exponentially in the coming years.

So what does this really mean for Vestas and what does this really mean for Europe?

Earlier in the year, Ditlev Engel, Vestas’, Chief Executive Officer, commented that he expected slower growth in the European onshore wind sector following economic austerity in many major European economies. And whilst Mr Engel emphasised the threat from Chinese competition, diversifying the business’s portfolio into alternative emerging markets makes a lot of sense.

And it’s perhaps this diversification that is assisting the business in some of its recent work in securing a Canadian servicing agreement and Spanish installation projects, whilst ensuring it doesn’t fall into the same sort of traps that have blighted Nordex this week.

Whatever the long-term outlook for the European turbine manufacturers, it is increasingly evident that in under the current market conditions, the horizons have to be set much further afield. Hello Brazil?