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Gaia Wind looks to generate more profit with turbines

IT seems there should be a punchline to the one about the Dutchman who bought a Danish wind turbine company and brought it to Scotland.

BLOWING STRONG: Johnnie Andringa at his wind turbine factory in Glasgow . Picture: James Galloway
BLOWING STRONG: Johnnie Andringa at his wind turbine factory in Glasgow . Picture: James Galloway

But there is no joke about the success Johnnie Andringa has had since spotting an opportunity to develop Gaia Wind.

The softly spoken 49-year-old has a quiet enthusiasm which works its way into his words.

He talks animatedly about buying the business in 2006 from its owners in Denmark, relocating it to Glasgow and growing it to a near £10 million turnover company which designs, assembles and sells small scale wind turbines.

He said: "We can build five, six or sometimes seven turbines a week.

"We will sell about 300 turbines this year, which is about 50% up on last year, and at the growth rate we are trying to maintain for the next few years."

The market for the 11 kilowatt devices – which have 13 metre wide blades and are optimised for areas with annual average wind speeds of 10 to 17 miles per hour – is mostly farmers, landowners, rural businesses, country houses and golf clubs with installation costs starting at around £55,000.

Those who buy a turbine also receive UK government backed payments called feed-in-tariffs.

The rate is currently 28 pence per kilowatt hour produced for wind turbines of between 1.5 and 15 kilowatts.

Sitting in an office in Gaia's modern factory unit in Port Dundas in Glasgow Mr Andringa said: "It is people with a lot of space around their property who want to generate their own electricity and benefit from the feed in tariff.

"It is quite attractive to do that with a small wind turbine.

"The customers typically pay it off in six years or so depending on performance. On average it is around £10,000 profit a year with £1000 maintenance so it works out about £9000 net revenue.

"The turbine is designed for 20 years so that is quite a good return. Some people use it as a pension plan."

With 45 people now working in Glasgow Mr Andringa and his board have recently completed a business plan to take the company to £50m of sales over the next three years and increase headcount further.

Part of that projected growth involves increasing export sales from 20% of turnover to more than 50%.

Mr Andringa, a mechanical engineer by trade, says Gaia is making good progress in places such as Italy, Denmark and the United States.

He said: "When we took the company from Denmark to the UK the owners had not managed to take [the products] out of Denmark.

"We wanted to show the offering could go to different countries and that will form a big part of our growth in the next few years."

Part of opening up new markets will involve improving the existing technology.

Gaia works with academics and students at Strathclyde and Glasgow universities on a range of projects.

Twin aims at the moment are improving the efficiency by 20% and reducing the cost by 20% through utilising competitive sourcing from suppliers and trying different component mixes.

Mr Andringa believes by doing that the electricity the turbines generate will have parity with the retail prices meaning they will become economical to run even without state backed feed-in tariffs.

He said: "We are making good progress on both of those and is something we are focusing on over the next year.

"If we make the turbines economic even without a feed in tariff it lets us take it to markets where there is no government support and into expensive electricity markets like Germany and Brazil.

"We have designed the factory [in Glasgow] to handle a lot more capacity but we could look to build another one here or perhaps one in the US or wherever our clients are at that time."

While the growth targets Mr Andringa has set are ambitious he still feels constrained by a lack of finance.

At the moment he is actively looking for investment and believes with the right backing Gaia could grow at 100% for the next three years.

He said: "It is shame as if could access more finance we could grow more quickly.

"It is difficult raising money from banks. We are considering venture capital and have had some discussions but the conditions can be quite onerous.

"To set up in a new market you need the money to invest before you get paid for the orders. We are an opportunity rich business with lots of new markets for the existing products and that is before we even begin to talk about new products."

The building up of a team around him is helping Mr Andringa deal with the increasing demands made on the head of a fast growing business.

He said: "There is a bit more travelling but I don't mind that. It is when you are away and you come back to great piles of emails.

"We are now putting together a senior team which is a nice feeling for me. If I'm away for two or three weeks I know things are still going, and growing. A few years ago everything came to me and that is no longer the case."

A major bugbear for Mr Andringa is the planning system which he describes as "too long a process" even for smaller wind turbines.

He said: "There is a good business environment in Scotland and we have had good support from Scottish Enterprise but planning could be better."

The issue over Scotland's constitutional future has been discussed by the Gaia board although it has no official stance as yet.

Mr Andringa believes the opportunity for more control in Scotland may benefit his business.

He said: "The Scottish Government has a focus on renewable energy so for us it could be a good thing if they were able to set some more of their own policies."

Curriculum vitae

Johnnie Andringa was born in the Netherlands and studied mechanical engineering at university in Enschede.

In 1989 he founded Mecal, which specialised in the design of components for large wind turbines.

By the turn of the century the company employed around 50 people but Mr Andringa decided to sell his majority shareholding and go travelling.

He went on to study for a masters qualification in management at London Business School where he met his Australian partner, Ann.

At around the same time he also met Gordon Proven, of Ayrshire-based Proven Energy, at a trade show in Aberdeen. Mr Andringa was convinced to relocate to Scotland and join Proven as a business development manager.

In 2006 he and some other investors bought small wind turbine manufacturer Gaia Wind which had been running in Denmark since the 1990s.

The business was moved to the UK and now assembles the turbines at its factory in Glasgow.

Mr Andringa is a fan of football club FC Twente and enjoys hillwalking in Scotland. He intends to go walking on Mount Kilimanjaro in Tanzania this Christmas.

He retains a minority shareholding in Mecal.

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