China Wind Systems cuts deal with large wind supplier

Wuxi-China based China Wind Systems said today it has signed an agreement to supply wind power components to Hangzhou Advanced Gearbox Group.

China Wind Systems said the terms of the agreement stipulate that it complete two shafts and five gear-rim prototypes based on Hangzhou Advance Gearbox Group's technical specifications.

Once those prototypes satisfy Hangzhou’s inspections, then the company said it expects to purchase shafts and gear rims from China Wind Systems in 2009. Pricing, quantities and terms of delivery for the equipment have not been set.

The current average selling price per ton of forged products in a gearbox is RMB 15,000 (approximately $2,195 US), according to China Wind Systems. Those gearboxes will be put to use in Hangzhou’s  for use in its 1.5 MW gearboxes.

China has stated its goal is to generate 30,000 MW of wind power by 2020 (see World Bank, China working together on clean energy). 

The company said it currently produces 500 gearboxes per year and the approximate total tonnage of shafts and gear rims in a gearbox weighs about 30-to-35 tons (see AES boosts wind capacity in China).

China Wind Systems said its forged product sales for use in the wind power industry are expected to reach $7 million in the fourth quarter of 2008, which is expected to account for approximately 44 percent of China Wind Systems’ total revenues. The deal is part of the company’s transition to a wind-power components manufacturer, according to company executives.

The company said it is also in discussions with other potential customers. China Wind Systems said its goal is to boost sales of its forged products for the wind industry to $40 million in 2009.

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