Nordex Closes Rotor Blade Production In Rostock - 600 Employees Affected

Hamburg, Germany - Nordex announced yesterday afternoon that it is to cease production of rotor blades at its Rostock facility.

Nordex plans to discontinue rotor blade production in Rostock at the end of June 2022. In order to make the planned job cuts socially acceptable, a reconciliation of interests and a severance scheme are to be negotiated with the works council in the short term. The discontinuation of production at the GVZ would affect around 600 of the roughly 8,600 employees worldwide. In Germany, the Nordex Group employs about 3,150 people.

In addition to rotor blade production, Nordex operates a production facility in Rostock for the manufacture of nacelles, hubs and drive trains (DMR). In addition, employees from the engineering department and the service organisation work in Rostock. These employees are not affected by the measure.

Increasing price competition increases cost pressure - shift in demand towards larger turbines

Since the introduction of auction systems in most energy markets, the industry has been characterised by increasing price competition worldwide. Since the electricity producers with the lowest bids are awarded the contract, they pass on the price pressure to the turbine manufacturers. In order to remain competitive, the manufacturers would have to reduce their production costs. According to Nordex, the cost of generating energy from wind has fallen by around 50 per cent in the last five years and this trend has had a negative effect on the manufacturers' profitability.

Despite all the cost-cutting measures already initiated, the cost of blade production in Rostock is not competitive, according to the wind turbine manufacturer. In addition, Nordex expects the need and demand for the rotor blades produced in Rostock for turbines with a maximum rotor diameter of 149 metres to continue to fall in the future in the wake of the global trend towards more powerful turbines and ever longer rotor blades.

"The wind industry operates in a highly competitive, global market that is mainly cost-driven. Against this background, we must optimize our global production and sourcing processes in order to ensure profitable production and to secure the Nordex Group’s competitiveness", says Nordex CEO José Luis Blanco. "As a German and European-based company, we particularly regret that we do not see an alternative to this painful measure", Blanco adds.

Nordex share price climbs - Ukraine war drives renewable shares

The current rise in Nordex stock is primarily due to the Russian invasion of Ukraine, not the announced closure of rotor blade production. At EUR 15.90 (02.03.2022, closing price, Stuttgart stock exchange), the share price was 47 percent higher yesterday than the low for the year to date on 24 February (intraday).

Investors assume that the dependence on fossil energies in Europe will be reduced more quickly in the future. Green shares have been on the rise since then. Since its low for the year of 1,330.93 points on 23 February 2022 (closing price), the global share index RENIXX has gained more than 20 per cent to 1,621.5 points by Tuesday (01.03.2022, closing price, Stuttgart Stock Exchange). Since then, the RENIXX has fallen back somewhat and is currently trading at 1,562.63 points (03 March 2022, 12:53 p.m., Stuttgart Stock Exchange).

Source: IWR Online, 03 Mar 2022