Spain's Acciona in Chinese Wind Turbine Venture
Date: 07-Jun-05
Country: SPAIN
Acciona's wind power unit EHN and the state-owned China Aerospace Science and Technology Corporation (CASC) announced a plan to invest 24.6 million euros ($30.2 million) initially to build 400 turbines a year in Nantong for the Asian market.
The project could potentially bring 400 million euros in annual revenue for the venture, they added.
Production could rise to 600 turbines per year in the short term, Acciona said. The project would focus on the Chinese market but also pursue exports as Acciona seeks to expand its wind power business.
Acciona's wind power unit EHN and CASC will hold 45 percent each in the venture, with the Hispano-Chinese marketing company Inceisa owning the other 10 percent, Acciona said in a statement.
A second agreement will create a joint venture for research and development in biomass, biofuels, wind energy and wind turbine components.
Acciona shares added to early session gains upon the announcement and were up 2.5 percent at 1500 GMT, topping the leader board of Spain's Ibex-35 index of most-traded stocks.
Acciona stock also outperformed the DJ Stoxx index of European construction stocks, which was down 0.3 percent.
But Acciona had lagged behind other Spanish builders during a recent rally for the sector. Its stock rose 5.3 percent in the past month versus 21.3 percent and 12.1 percent respectively for Spanish rivals Sacyr Vallehermoso and ACS.
"Acciona's agreement in China is good news because the Spanish builder has been able to position itself in a market with high growth potential in wind energy," said Roberto Barrio, an analyst in Madrid for Portuguese broker Espirito Santo.
Acciona has been developing its energy business under a diversification plan in recent years and with help from a cash windfall from the sale of a stake in mobile phone giant Vodafone
Acciona's energy division provided 38 percent of group core profit in the first quarter.
