|LONDON - Engineer FKI says it will withdraw from its loss-making wind turbine business at an exit cost of 20 million pounds as consolidation in the industry makes it increasingly tough for smaller players.|
"The rapid consolidation of wind turbine manufacturers and the increasing influence of major wind power developers have significantly increased competitive pressures," the firm said in a statement.
Shares in the firm were little changed in Monday morning trade, up 0.4 percent at 126-1/4 pence, valuing the firm at around 730 million pounds.
FKI FKI.L said its Germany-based DeWind business, which designs and sells wind turbines, was suffering as the cost of keeping up with industrial giants like Siemens SIEGn.DE and General Electric GE.N - newcomers to the industry - rocketed.
German engineering giant Siemens entered the market by buying Danish wind-turbine maker Bonus last month. Just over two years ago General Electric of the U.S. entered the business by buying Enron Wind which it renamed GE Wind.
In the year to March 2004, DeWind made an operating loss of 6.3 million pounds. FKI said the cash cost to close the business - bought for 23 million pounds just over two years ago - would be around 20 million pounds spread over several years.
"The impact will be mitigated by any proceeds from the sale of inventory and by any income from technology agreements," the firm said.
DeWind currently employs 316 people. The firm did not say how many jobs would go.
REUTERS NEWS SERVICE