Daewoo Shipbuilding DeWind To Exit Wind Power Business

- Jan 24, 2018-

Faced with the brutal reality of sustained losses, Daewoo Shipbuilding ultimately chose to completely withdraw from the wind power business.


According to Korean media reports, Daewoo Shipbuilding plans to completely wind power business after the sale of wind power company DeWind. Daewoo Shipbuilding hopes to rely on DeWind's global wind power industry's leading dream eventually failed and caused a heavy loss to Daewoo Shipbuilding.


Earlier this month, Daewoo Shipbuilding decided to sell DeWind to a U.S. private equity firm for about 1.5 billion won (about 1.4 million U.S. dollars). In 2009, Daewoo Shipbuilding acquired DeWind for 140 billion won ($ 131.166 million), and its current price means that Daewoo Shipbuilding can only recover 1% of its original investment.


After the sale of DeWind, Daewoo Shipbuilding is also expected to sell other power plants owned by DeWind, as Daewoo Shipbuilding believes the market value of these devices is small. Therefore, Daewoo Shipbuilding will completely withdraw from the wind power market. glenflange


Daewoo Shipbuilding believes that wind power business has been unable to operate as expected, will only bring losses, which decided to sell subsidiary DeWind. In 2008, the wind power business was once regarded as a new growth point for shipping companies in South Korea. The former "President Lee Myung-bak government's" low-carbon green development "plan has benefited greatly from the wind power industry. For shipbuilders with marine propeller technology, , Into the wind power market is relatively easy. At the time, Daewoo Shipbuilding entered the wind power market when it said that by 2020, Daewoo Shipbuilding will become one of the world's top three wind power equipment companies in the global market share of 15%.


Unfortunately, the expectations of Daewoo Shipbuilding are completely lost. Government support is crucial because wind power requires considerable capital investment to install large materials and equipment and to secure large areas. However, since the global economic downturn, governments of all countries have reduced their investments in the wind power industry and the number of wind power orders has dropped significantly. In addition, once soaring oil prices also began to plunge, new renewable energy demand growth is far below expectations.glenflange


Since the acquisition of DeWind by Daewoo Shipbuilding, DeWind has never been out of a loss situation. In 2009, DeWind net loss totaled 4.1 billion won (about 3.84 million US dollars). DeWind then reported a loss every year; especially in 2016, DeWind suffered a loss of 106.1 billion won ($ 99.34 million). Heavy losses made Daewoo Shipbuilding decided to sell DeWind.


Meanwhile, Hyundai Heavy Industries and Samsung Heavy Industries, which entered the wind power market at the same time as Daewoo Shipbuilding, are also expected to sell the related wind power companies.