Is DeWind sale an ill wind for FKI drives?

The future of FKI`s Loughborough-based drives business is uncertain following the group`s decision to sell its DeWind wind turbine business, just two years after buying the business for £23m. A major part of the drives business has been to supply converters for the DeWind turbines.

In the year to March 2004, DeWind made a loss of £6.3m. FKI says that since it bought the firm in 2002, the wind turbine business has changed, with large-scale wind farm orders favouring bigger manufacturers. The five largest turbine suppliers, which now include Siemens and General Electric, account for 80% of the global market. FKI expects that the DeWind closure will cost it about £20m.

FKI, which controls 23 businesses, has identified five which it intends to keep. These include: materials-handling; lifting products; high-tech ropes; and turbo generators.

In January 2004, FKI announced that it was shutting its Norwich-based motors business, Laurence Scott and Electromotors. The closure was postponed while FKI tried to find a buyer for the business, but in its half-year results statement published in early December, FKI revealed that it has failed to find a buyer and and LSE business will shut by June 2005.

The announcement of the DeWind sell-off has prompted speculation of a takeover bid for FKI.