101130 growth opportunities in wind market fabricators lucintel strategy

Creating the Equation for Growth


Growth Opportunities in Wind Energy

Market

November 30, 2010

Presented by: Norman Timmins, Director Of Consulting

Creating the Equation for Growth2

Table of Contents

• Wind Energy Snapshot

• Market Opportunities in Wind Energy Market

• Lucintel Solutions to Improve Your Long Term Position in Wind

Market

• About Lucintel and its team

• Next Steps


Executive Summary

• Global wind energy market growing at a 27% (CAGR) last 5 years and

forecast to grow at double digits over next 5 years

• Lucintel estimates wind turbine market to cross US$ 100 billion by

2015

• Wind energy market will require technical innovation to make wind

more competitive vs. other forms of energy

• Increase in turbine size and longer blades are driving penetration of

high performance materials such as carbon fiber

• Global wind market witnessed significant fall in 2010 because of

economic slowdown in U.S and Europe but with future recovery in

works


Table of Contents


• Market Opportunities in Wind Energy Market


Market


• Next Steps


Wind Market Opportunities

• Wind market provides opportunities for growth for material suppliers, blade

makers and various component makers

• Lucintel estimates: market for composite materials such as fiber, resin, core,

adhesive, etc. will reach ~$4 billion in 2014.

• Governments across the world are making a strong push to make wind a

significant source of energy

• U.S. wind market is expected to fall in 2010 but expected to recover

• Chinese government is raising the country's wind power capacity to 100

GW by 2020 .It is expected that China will surface goal before 2020.

• Lucintel growth strategy consulting can help your company position into this

globally competitive market space to benefit and drive future long term growth

opportunities


Growth in Wind brings forth Opportunity and Challenges

66

Source: Lucintel analysis

Global Cumulative MW Key Insights

• Move towards high capacity

turbines

• Highly concentrated market with

high bargaining powers of OEMs

• Rapid growth in energy deficient

APAC markets. Challenges in US

• Legislative support across the

globe for clean energy sources

and technologies

• Wind is driving innovation

across the value chain as it

seeks to improve costs

Lucintel can help you understand what opportunities exist to

improve your company’s profitability in this fast paced

market!


US wind market is expected to fall in 2010 but with future recovery in

the works

4Q 20093Q 20092Q20091Q 2009

4.500

4.000

3.500

3.000

2.500

2.000

1.500

1.000

500

0

1Q 2008 2Q 2008 3Q20104Q 20083Q 2008 4Q20102Q20101Q2010

Forecast

New

US

MW

In

sta

llatio

ns

Challenges as overall wind market expected to

decline in 2010

• 3-4% drop in energy demand has a multiplier effect on new

capacity projects which are 50% renewable

• Fall of natural gas prices affecting wind competitiveness

• Connectivity issues impacting new projects

• Lack of robust long term federal targets renewable energy

continues to impact investor confidence and credit availability

• State level targets are still well into the future

Solutions

• Demand to grow with renewed economic vigor with

EIA forecasting 2% CAGR in next 5 years for overall

demand in energy

• Forecasted 7% CAGR in natural gas prices in 5 Yrs

• Texas and China leading way to new connectivity

• Political support for renewables expected to remain

7


Wind expected to remain attractive in terms of size, growth rate and

cost competitiveness

Wind

Biomass Solar PV

Solar

Thermal

8

As Wind is Renewable Driver

Wind is Cost Competitive . . .

With a Sustainable Growth Record

• Demand to grow with renewed economic

vigor with EIA forecasting US 2% CAGR in

next 5 years for overall demand in energy

• Forecasted 7% CAGR in natural gas prices

in 5 Yrs

• Texas and China leading new connectivity

• Political support for renewables expected

to remain across globe

. . .with Solid Growth & Strong Base


+

–

–

+

Win

d e

nerg

y p

ote

ntial

Percentage of wind energy penetration vs. potential

Indonesia

South Africa

Mexico

India

Germany

Brazil

Russia

Key Insights

• Both the US and China show strong potential

and low current penetration

• Russia has high potential but currently share

of wind is <1 percent due to availability of

alternate energy sources,

• PROFINA program is expected to drive wind

power sector in Brazil

• PROFINA targets 5000 MW installation

by 2015

• Germany, widely considered a leading

economy in adopting wind energy is currently

at 30% penetration

Why Wind: even in highly developed wind markets such as

Germany, penetration relative to potential is low while big markets

such as USA and China have very low penetration levels

USA

China

9


Lucintel Analysis

Heavier blades (1980’s)

Trends towards

lighter blades –

carbon fiber (2000’s)

Next generation

blades (2012+)

Trends Driving Opportunities

• Need for improved wind energy

cost competitiveness driving

longer blade lengths

• Better mechanical properties

holds the key for more market

penetration of composites

• Increased load and stress driving

need for new materials and

design philosophy

What are right:

• Products & Specifications?

• Segments & Positioning?

• Geography & Value

Chain?

How can you and your company be best placed to drive wind

opportunities?

Blades during 1990’s

Blade material evolution


Table of Contents

• Executive Summary

• Market Opportunities for Composites in Wind Energy Market


Market


• Next Steps


Lucintel has an extensive toolkit to address common questions on

expanding focus within wind

12

WIND

Market Entry

Voice of Customer

Product Benchmark

Procurement Optimization

M&A

Plant Optimization

Opportunity Screening

• Is market space / opportunity of current

product offerings sufficiently robust?

• Wind is focus for many: how can my

company profitably differentiate?

• Based on our core skills, where should

we focus?

• Should we build or buy? Is build even an

option?

• What game changer actions exist and/or

is a more incremental approach best?

• What is the order sequence of market

entry segments / products?

Key Questions


In-depth Opportunity Scanning for rapid revenue growth

+

–

–

+

Ma

rket G

row

th

Profitability

Source: BCG casework

Wind Tower:

Wind Blade:

Gear box:

Yaw system : Rotor Hub:

Rotor bearings:

Power converter:

Transformer:

Main shaft:

Main frame:

Brake system:

Nacelle housing:

Illustrative


Our Deep Experience in Wind and Wind MRO complements our

strengths in wind

14

• Insightful reports on wind market by Lucintel:1. Top 5 Global Wind Gearbox Manufacturers: May 2010

2. Top 5 North American ISP’s in Wind O&M Market, May 2010

3. Top 5 Global Independent Wind Blade Manufacturers, May 2010

4. Wind Cost Competitiveness vs. Alternative Energy Sources, June 2010

5. Future Material Needs for the Global Wind Energy Market, 2009-2014,

May 2009

6. Growth Opportunities in Wind Energy Market 2009-2014: Materials,

Market and Technologies, May 2009

7. Opportunity Assessment for Maintenance, Repair & Overhaul in the

Global Wind Energy Market, 2008-2013, January 2009

• In depth custom projects in wind market for small to fortune

500 clients:1. Market size and market entry

2. Product benchmarking

3. Material usage, lifespan and durability

4. Customer & competitive Profiling

• +1,000 primaries realized in last year in wind & wind MRO1. Realized across the supply chain from wind farms to OEM’s to blade

manufacturers to material suppliers


Extensive Market Potential and Benchmarking Experience

throughout wind energy value chain. . .

15

• Regional: Feasibility study of carbon fiber plant for a

Eurasian nation with market potential, entry strategy and

customer lists

• Wind: Market validation and entry strategy for parts /

solutions provider into wind

• Strategic business plan: Multi-million dollar investment

analysis and business strategy for wind market entry

• Forecast Due Diligence: Revenue validation due

diligence for carbon fiber parts manufacturer and an

Acquisition Due Diligence for a major OEM purchasing

• Benchmarking: Product benchmarking and market

potential for early stage “stealth mode” pre-market resin


. . . As well as deep expertise on the technology and optimal plant

location, technology and processes

16

• Deep understanding of process: RTM, hand lay up,

VARTM, Filament winding, pultrusion, autoclave and

prepreg layup, among others

• Materials and Processes: Material requirements,

optimal processes and effective design to build strategies

• Technology due diligence: Plant layout, technology

obsolescence and team effectiveness

• Feature / Value evaluation: Cost and benefit to

customer of features for optimal product design and

profitability


Table of Contents




Market


• Next Steps


Lucintel is the leading global management consulting & market

research firm for aerospace, marine, wind, construction, consumer

goods, transportation, chemical, and composites

Lucintel creates your equation for growth and is committed to

actionable results that deliver significant value and long term growth

to our clients

Lucintel has been creating measurable value for over 10 years and

for more than 1,000 clients in 70 + countries worldwide

Visit http://www.lucintel.com/imovie/ for a short 3.5-minute movie on

Lucintel solutions

About Lucintel

http://www.lucintel.com/imovie/


Research Methodology: Lucintel converts unsystematic data from

primary and secondary research into client specific solutions…

19


Research Methodology: Primary Research drives our insight…

20

Interviews by Industry Member

0 2 4 6 8 10

Supplier

Producer/Dist

End User

Govt. Agency

Military

Industry Expert

Aerospace

Sport

Interviews by Job Title

0 2 4 6 8 10

Consultant

President/CEO

Biz Mgr / Dir.

Technical Dir.

Research Mgr.

Product Manager.

Military Officer


. . . with Project Teams with an appropriate mix between technical

and business expertise for results that drive the bottom line

Senior level consultants and analysts

PhDs, MBAs, MS in Market Research

Masters level engineers

Scientists and Industry experts

Past projects ranging from start up to multi-national Fortune 500

companies.

21


V.Vinu, Account Manager, Lucintel

Vinu is a Sales Account Manager for Lucintel with two years of sales

management experience as a Sales and Relationship Manager at ICICI Bank,

one of India’s top ranked bank in India. He holds an MBA in Marketing and

Information Technology from the Indira School of Career Studies, Pune and a

Bachelor’s degree in Commerce. With, Relationship Management as a

strength, he is very keen to help his customers achieve their organizational

goals

Lucintel Management Team

Chuck Kazmierski, Project Manager

Senior Analyst and Project Manager for Lucintel, with 20 years of diverse

experience in market research, opportunity screening, value based management,

voice of the customer, value chain analysis, and market structure analysis. Over

10 years of experience with resin and composites industry. Former marketing

research professional with Dow Chemical, encompassing a succession of

increasingly responsible positions in market research and business intelligence,

including business unit research analyst, research manager for business analysis

team, subject matter expert in marketing research expertise center, and internal

business/ marketing consultant.



Alan Clark, FInstSMM, Sales Director - Aerospace,Defense & EnergyWith over 30 years work experience in manufacturing covering senior sales

and commercial roles he has successfully negotiated many major contracts

throughout the world. Prior to Lucintel, Alan worked for many leading

Aerospace companies including BAE Systems, Goodrich, Meggitt,

Doncasters and PCC (AETC) covering complex systems, supply chain

solutions, component and process sales. Alan has been responsible for

developing and implementing innovative Market Strategies leading to

substantial profitable growth.

Major strengths: profitable growth, contract negotiation, market and win

strategies, mentoring and coaching.

Alan is a Fellow of the Institute of Sales & Marketing Management. Alan

believes in the importance of a strong corporate Vision backed by a robust

and validated Market Strategy to excel in an ever changing Market

environment.


.

Norman Timmins, MBA, Director of Consulting Norman is Director of Consulting for Lucintel with over 20 years work experience

in B2B marketing, consulting, energy and transportation.

Consulting Experience: Prior to Lucintel, Norman worked for Boston

Consulting Group and Bain Consulting, managing consulting projects for

Fortune 500 companies. Sample projects include:

• Feature Value and growth strategy for White Goods for Fortune 100 Company

• Growth and Cost Optimization Project for Fortune 100 Transportation Company

• Procurement Strategy and Negotiations for near bankrupt technology firm

Business Development Experience in Developing Economies: Worked for

DHL Express as Country Director of Corporate Strategy while directly managing

urgent and highly successful turnaround of a +350 retail storefronts. Also served

as Senior Manager for Business Development for PMI in Mexico achieving

company record for sales margins while managing firm’s most profitable account.

Major strengths: strategic consulting, growth strategies, value based

management, profit improvement and market research. Norman received his

MBA with honors from Wharton and his BA with honors from Brown University.



Sanjay Mazumdar, PhD, CEO

With a global consulting experience spanning over 10 years, Dr. Sanjay

Mazumdar has been leading Lucintel for the past ten years on projects as

diverse as growth consulting, due diligence, value chain strategy and

opportunity analysis providing actionable and cost-effective market

intelligence, consulting and insights, to over 700 global customers. To date,

Dr. Mazumdar has been instrumental in leading and executing over 100

consulting projects for OEMs, Tier 1, Tier 2 and material suppliers across

aerospace, marine, wind energy, transportation and sporting goods market for

Lucintel, and remains the first choice consultant for global companies

worldwide.

Sanjay holds a Ph.D. in Mechanical Engineering and additional training in

Strategic Management from M.I.T. Boston with strong general management

qualifications in strategic planning, project development, sales and marketing,

budgeting, goal setting, trouble shooting and capital improvement. He has

also authored a highly endorsed book titled “Composites Manufacturing,

Materials, Products and Process Engineering” as well as published more

than 25 technical papers in the international journals and conference

proceedings.



Lucintel’s Unique Capability for Your Project

Lucintel’s focus is in advance materials and components and has extensive

experience in wind energy, aerospace, marine, construction and

automotive markets

• No Learning Curve - Deep industry knowledge and insight

• Quality, Accuracy & Depth

• Speed to Market - Time Savings

• Cost Savings

• Neutral Third Party Position for better market info access and interpretation

Continuous networking with your whole value chain including customers,

suppliers and competitors.

Access to vital, hard to find insights through detailed primary and secondary

research and analysis. Incomparable data accuracy and integrity.

26


Table of Contents




Market


• Next Steps


Alan Clark, FInstSMM

Director of Sales

Email : [email protected]

UK Cell: +44. 7875.708825

Customer Service

Email: [email protected]

Tel. : +1-972-636-5056

Norman Timmins, MBA

Director of Consulting


Cell: +1-940-597-3786

Chuck Kazmierski

Project Manager


Tel: +1-972-620-8888 (Office)

Contact Information

28

Contact Alan Clark at [email protected] or Tel. +44. 7875.708825 for further detail or to discuss your project opportunity.

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101130 growth opportunities in wind market fabricators lucintel strategy

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