September 1, 2008

Turbine Blades Spin New Facilities

By Soule, Alexander

Continuing a recent trend in manufacturing, Hexcel plans to open its first new U.S. plant in more than two decades in Colorado; to produce reinforced material for wind turbine blades. The new plant will be built later this year even as the Stamford-based company prepares to open a similar factory in China. Hexcel's Colorado plant fits with a recent trend of U.S. manufacturing companies reassessing overseas manufacturing in light of a continued decline in the U.S. dollar, which is down more than 15 percent this year against the Euro.

A Hexcel spokesman said the Colorado plant is more a logistics decision - material can be manufactured at the highest profit margins close to the massive molds required to make wind turbines.

The development comes as Connecticut manufacturers finally ended nine straight months of job losses, eking out an employment gain in June numbering 200 jobs.

Hexcel has long supplied material for wind turbines manufactured by Denmark-based Vestas Wind Systems AS, which in March opened a plant in Colorado that will initially employ 650 people. Last month, the company announced an order for 44 wind turbines for an unspecified wind farm in the United States; the company is planning a plant capacity of 1,800 turbine blades annually.

Hexcel reported having 4,080 employees at the close of 2007, 380 fewer than a year earlier. The company has yet to specify how many jobs it will add over the next 18 months as the Colorado and China plants come online.

"Colorado has the potential to build faster than China," said David Berges, CEO of Hexcel, addressing the plant's growth prospects last month in a conference call with analysts published by market analyst Seeking Alpha. "It's substantial and could be more than China; and it could be fast."

Wind-farm operators and manufacturers have been working to resolve a recent trend in cracking in turbine blades. Hexcel hopes to solve the problem with blades produced in Colorado that use pre- impregnated material, dubbed prepreg in the industry, that combine fiber fabric with strengthening resins.

Prepreg composites are also being designed into a range of other materials, from passenger aircraft to recreational gear like skis. Earlier this year, Hexcel announced the largest contract in the company's 60-year history: a deal to provide carbon-fiber material for the new Airbus A350 jet, which could generate up to $5 billion over the life of the contract.

Hexcel plans to handle A350-related production at a Spain plant that also produces material for wind turbine blades, as well as at another one just outside Salt Lake City. The company has not ruled out adding manufacturing capacity in Eurpoe at a later point, and has yet to say whether its Colorado plant might eventually produce material for other uses.

In the second quarter, the company had a $27 million profit on record sales of $360 million, up 24 percent from a year earlier. The increase has come despite the dollar's weak performance against the Euro, and sky-high oil prices.

"We are all discouraged by the headwinds that we face, and we recognize we are going to have to find ways to economize to get where we need to get for this year," Berges said. "We don't have any big restructuring announcement ... It's more a blocking, tackling and making sure that we maximize the efficiency of the plants."

In separate Far East news, or $22 million sold Boeing Co. its stake Hexcel in a composite parts joint venture in China. Hexcel will continue supplying material to BHA Aero Composites Parts Co. Ltd., whose minority shareholder is China's Aviation Industry Corp.

Copyright Westfair Communications Aug 4, 2008

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