Wind energy equipment – Moventas, and The Switch – Safe harbors found after storm winds…

15.2.2016. Finland, like Sweden, has a really long history of mining in their own backyard. Iron ore and other metal ores have been mined throughout both countries for centuries. The mined minerals have spawned metal production and skills in light and heavy machinery production. The list of companies is impressive and diverse. You can look at SSAB, Sandvik, ABB, Switch, Metso, Bofors, Atlas Copco, Wärtsilä, etc. They all continue to operate as stand-alone companies, but there are 2 Finnish companies that have survived after being tossed about by gale force winds and then saved from the brink.

The first is a company called The Switch that was established in Vaasa in 2006 by a small group of entrepreneur engineers to produce full-power converters and permanent magnet generators for the renewable energy sector. They saw a rapid rise and fall in turnover leading to losses. The company was finally acquired in 2014 by Yaskawa, a Japanese specialist in advanced drive train technology. The Switch is now headquartered in Helsinki, and on the road to recovery.

The other company, Moventas, is in the wind turbine business. Like The Switch, it has seen a revival over the past years, even though the path up to the present has been really rocky, the story is fascinating. Back over 60 years ago Valmet, owned by the Finnish government, was producing heavy power transmission equipment. It was a weak company that was eventually spun off as Metso Drives in 2001. It was later renamed as Santasalo Moventas Group, that was then sold to a Finnish private equity investor in 2005, CapMan, who then, 2 years later, resold their holding to IK, another Nordic private equity investor. The new owners wanted to expand sales, but the financial crisis hit the wind farm industry hard in 2007 and turnover fell sharply. You may recall that the Danish wind sector giant Vestas was also close to failing around that time.

The FT on 2.9.2012 wrote: “Multiple profit warnings, almost a fifth of jobs cut, talks with lenders to stave off a breach of its covenants: Vestas has become the poster child for the woes of the wind industry.”

In 2011, Moventus fell into bankruptcy with heavy debts and falling orders. A Scottish investment firm Clyde Blowers Capital based in Glasgow then purchased them in November 2011 and recapitalized the company. They are now, once more, a fast growing designer and manufacturer of gearboxes for onshore and offshore wind markets, with over 14,000 installed units. They have now employed 100 more people in the past year and R&D is producing gears with improved levels of cost efficiency. According to the US Energy Information Administration, renewable energy growth is expected to exceed 9% with wind having the largest share.