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Vacon signs deal to build drives for Converteam

15 January, 2007

Vacon has signed a global co-operation agreement with Converteam to supply the motors, drives and generators business formerly known as Alstom Power Conversion, with air-cooled low-voltage drives. The deal is in line with the Finnish drives-maker`s strategy of supplying its technology to third parties, as well as selling it under its own name.

The deal has taken several years to come to fruition. Negotiations began when the Converteam drives business was still part of Alstom. Converteam will continue to produce its own high-power drives. It will probably also continue to use some products from Control Techniques which was previously its main supplier of low-power drives.

"We chose Vacon because of the synergies between our two ranges of drives," says Converteam`s chief operating officer, Florent Battistella. "In addition, we appreciate their willingness to meet our specific requirements, as well as their worldwide presence."

According to Heikki Hiltunen, Vacon`s executive vice-president for products and markets, the two companies plan to establish a strategic long-term collaboration which could lead to shared development and engineering activities. They are also planning to establish further co-operation on selected projects and in particular markets.

Vacon already supplies other companies including Eaton, Honeywell, Hyundai, Johnson Controls, Rockwell Automation, Schindler and Schneider Electric.

The Finnish company is still expanding faster than the market. In the first nine months of 2006, its order intake rose by 24.5% to €141m, its revenues by 29.1% to €135.4m, and its operating profit by 39% to €17.1m. For the whole financial year, Vacon expects its revenues to rise by around 20%, with a margin of at least 12% and a return-on-investment of more than 30%. Vacon`s share of the global LV AC market in 2005 was around 3.5%.

The company is establishing a series of "mini-factories" with development facilities to "mass customise" products close to its customers. As well as a mini-factory in Finland serving most of Europe, there will be others in Italy, China, Asia (probably India) and North America.

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