Spain - Gamesa invites its suppliers to adopt a joint growth strategy

Two Gamesa suppliers will share with attendees their international expansion experiences accompanying Gamesa in its international growth

Gamesa meets with its major Spanish suppliers tomorrow in Navarre, rallying them under the slogan "The challenge of international development." Gamesa will discuss its international expansion plan and convey to vendors the need for continuing to work together on this strategy for global expansion. The 80 supplier firms attending the meeting account for nearly 45% of Gamesa's sourcing from Spanish suppliers, purchases which totalled nearly 1.700 million euros in 2010.

Gamesa Chairman and CEO Jorge Calvet will provide an overview of the cornerstones of Gamesa's 2011-2013 strategic plan, which include becoming an industry leader in achieving a lower Cost of Energy, maintaining growth in markets with the highest wind energy potential and expanding and improving efficiency in construction, product and services processes. In this area, Calvet will discuss the supply chain's vital role in meeting these goals and underscore the opportunity a joint strategy in international markets poses for the company's suppliers.

Gamesa Managing Director for Operations Ricardo Chocarro will further discuss the company's international expansion and invite its Spanish suppliers to join forces with Gamesa abroad. Gamesa requires an established manufacturing base in the growth markets in which it operates. It also needs a group of local suppliers, which the company helps to cultivate in the countries into which it expands in both manufacturing and sales. At the same time, as Gamesa ventures into these markets it aims to involve the supply chain with which it has worked for more than 15 years in Spain.

Gamesa's expansion in manufacturing has seen it build factories in the world's leading wind energy markets, from Spain -- which supplies Europe and North Africa-, to the United States, China, India and, beginning in July, Brazil, which will address demand for the company's products in Southern Cone countries. Gamesa has installed its wind turbines in more than 30 countries worldwide, where it also performs operation and maintenance services and wind farm development and sales activities. As of June 2011, all of the MW Gamesa sold were destined for markets outside of Spain.

Strategy with local suppliers:
Gamesa's expansion strategy assigns particular importance to developing a local network of suppliers, all of them aligned with and committed to the same corporate objectives, quality standards and processes, which will also enable wealth creation in local communities in the countries in which the company does business.

Supply chain localisation is at an advanced stage in the US, with 60% of procurement made up of local content in 2010; in China local procurement accounts for 89% of the G8X-2.0 MW turbine system and for 76% of the G5X-850 kW turbine system. The local supply chain accounts for 35% of sourcing in India. In Gamesa's other emerging target countries and markets, such as Brazil, the company's targets call for 60% of purchases to come from local suppliers in 2012.

At tomorrow's meeting, Gamesa Sourcing Director Wim Geldhof will outline the company's commitment to cultivating suppliers in the regions in which Gamesa operates and to creating a competitive supply chain in each region. Meeting these goals requires the help of all suppliers for the purpose of improving local delivery management, ensuring that deadlines are met, guaranteeing quality standards and optimising costs.

Two Gamesa suppliers, Antec and Hine, will share with attendees their international expansion experiences accompanying Gamesa in its international growth, and will explain the ways in which their expansion abroad has helped to strengthen their businesses. Antec, a Basque Country-based manufacturer of wind turbine brake systems, now operates in Tianjin, China. Hine, which specialises in hydraulic systems and components, has expanded its activities, formerly limited to Spain's Basque Country and Asturias regions -- to the US, China, India, Brazil and the United Kingdom.

Purchases totalling 1.7 billion euros:
Gamesa sourced goods and services worth more than 1.7 billion euros from suppliers worldwide in 2010. Spanish companies accounted for nearly 800 million euros of those purchases, or 45% of the total. By Spanish region, Gamesa's purchasing was concentrated in the Basque Country (31%), Asturias (21%) and Navarra (12%).

Gamesa made direct purchases amounting to more than 1.3 billion euros and indirect purchases of nearly 400 million euros. The latter includes everything from repair services to turbine preservation and maintenance activities, cleaning services at wind farms and the telecommunications networks used to streamline their operation.

Gamesa works with its suppliers to implement Gamesa's General Procurement Conditions throughout the supply chain. These conditions expressly mandate respect for human rights and labour practices and emphasise the company's strong stance against fraud and corruption.

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