It is widely acknowledged that the pandemic has been a boon for renewables. The world installed more than 260GW of renewable energy capacity in 2020, an increase of almost 50% from 2019 levels, according to a report by the International Renewable Energy Agency. In 2020, greenfield foreign investment in renewables exceeded flows into fossil fuels for the first time on record, according to investment tracker fDi Markets.
Philip Fracassa, chief financial officer of US-based bearings and components manufacturer Timken, shares with fDi the company’s successes of 2020, off the back of rising demand for renewable energy, and why it is launching $75m worth of capital investments.
Q: Tell me a bit about the “breakout year” of 2020, and your decision to launch more investments across the world.
A: Through both innovation and acquisitions over the past several years, we’ve become a leading supplier and technology partner in wind and solar energy. This is resulting in record sales and a robust pipeline of opportunities.
In 2020, renewable energy revenue increased by more than 50% and became Timken’s single largest individual end-market sector, representing 12% of our total sales. Strong underlying market momentum, share gains and our competitive advantage in application engineering and R&D are driving the increase in sales. Today, we are a leading technology partner for major solar power systems and wind turbine manufacturers worldwide, meeting their evolving requirements for optimized reliability and performance.
To support our long-term growth, we have launched $75m in capital investments through early 2022 to expand our global wind and solar manufacturing capacity.
Q: Are you seeing equal interest in solar and wind among customers?
A: Timken experienced significant growth from both its solar and wind customers in 2020. Strong underlying market growth and share gains are driving the significant increase in renewable energy sales. Application engineering expertise and innovation are competitive advantages. We are expanding product-line coverage in renewables and we have an active pipeline of new program wins.
Q: Tell me about the new campus of consolidated sites in Jiangyin, China.
A: At Jiangyin, we are consolidating multiple sites into a new, larger campus to further increase production capacity, broaden the product range and improve productivity for precision drives used in the solar energy market. We are also further investing in new automated equipment at this site.
We’re now expanding our plant in Xiangtan, which is expected to be completed in the first quarter of 2022. This project will significantly increase our wind energy bearing production capacity.
Q: What place do you think China holds in the global supply chain of renewables?
A: There’s no question that China is a leader in the global renewables market. But given the continued strong growth we anticipate in wind and solar for the foreseeable future, we believe there’s a good deal of opportunity globally. We’re continuing to invest in our renewable capabilities in China; however, that’s just one part of our comprehensive global approach to serving the renewable industry. And to serve our global renewable energy customers, we’ve developed an extensive network of engineering and innovation centres and manufacturing facilities throughout the US, Europe and Asia.
Philip Fracassa is the executive vice president and chief financial officer of Timken, a US-based manufacturer of engineered bearings and power transmission product brands. In 2020, the company posted $3.5bn in sales and employs more than 17,000 people across 42 countries.