Daewoo targets boom in offshore wind power

South Korean ship building giant Daewoo Shipbuilding & Marine Engineering has announced that it is aiming to generate a third of its sales from wind power by 2020 as global demand for alternative energy continues to climb.

According to Bloomberg reports, the company is looking to diversify its revenue stream and generate sales of up to $7.5bn a year from its emerging wind energy operations by 2020.

Meeting the target would represent a remarkable performance from the firm given that it currently derives almost all of its revenues from shipbuilding and offshore equipment, with its wind energy businesses boasting annual revenues of just $25m.

Chief Strategy Officer Koh Young Youl told the news agency that the company was confident it could hit the target.

"It's a very ambitious target and it won't be easy," he admitted. "Still, the market potential for wind power is very big, partly because there's a lot of interest in going offshore as the space on land runs out."

The company is planning to invest $70m in its wind business with the aim of being the world's third-largest wind power equipment maker by 2020 and cornering 15 per cent of global market share.

Daewoo bought US firm DeWind for about $50m last year to give it a foothold in the sector and establish a US manufacturing base. The division is currently developing its first offshore wind turbine and won a $30m deal earlier this year to provide ten 2MW wind turbines to a project in west Texas.

The company is also due to select a site for a new generator factory in China by the end of this year and has hinted that it may build vessels for installing offshore turbines. In addition, it is considering plans to set up its own wind farms in Europe and North America and may convert a shipyard in Romania to build turbines.

"It is our plan to eventually be able to provide a full chain of services for wind energy, from making turbines to operating mills," Koh said. "We expect demand for wind turbines to grow as there are still a lot of places in China that need power."

Growing numbers of shipbuilders are expanding into the offshore energy sector after a fall in new orders from the shipping industry. For example, shipyard firm Hyundai Heavy Industries announced plans to build a wind farm in Pakistan earlier this year, while South Korean shipbuilder STX Group recently purchased Netherlands-based wind turbine maker Harakosan Europe for $19m.