Monday 16 September 2019

C&F Group shuts wind turbine business after being hit by tariff issues and red tape in Japan

Delays: C&F Group’s John Flaherty has been held back by the loss of a trading certificate in Japan
Delays: C&F Group’s John Flaherty has been held back by the loss of a trading certificate in Japan

John Reynolds

Athenry businessman John Flaherty's C&F Group has shut down the wind turbine manufacturing division of the business, the Irish Independent has learned.

There will be no job losses associated with the surprising move, and between 15 and 20 employees who worked in the division will be absorbed by other group companies.

However, it could see up to €30m that Mr Flaherty invested to manufacture small wind turbines over a number of years effectively now be lost, although some of that will have been recouped from sales in recent years, it is believed.

"C&F Group has been a strong believer in the benefits of wind energy and has invested heavily to develop a sustainable Irish small wind business," it said.

"However, we have been forced to conclude that, as a result of political and regulatory inaction in our foreign markets, this business is no longer sustainable and, in the circumstances, the broader C&F Group will no longer continue to fund it."

Mr Flaherty said Irish turbine owners not being able to sell the electricity to the grid also had an impact on sales.

The statement continued: "Unfortunately, there has been a worldwide lack of appetite for sustaining feed-in-tariffs for small wind.

"Frequent U-turns affecting them, such as recently occurred in Taiwan, make trading uncertain. We have seen entire markets quickly disappear as a result of rowbacks on tariffs.

"Regulatory delay also affected the sustainability of the business. After receiving thousands of site approvals for our turbines leading to hundreds of customer orders in the Japanese market, the C&F trading certificate was temporarily closed by Japanese regulatory authorities due to an installation issue in Japan.

"This ongoing restriction has prevented us from trading there while it continues. We have worked diligently to resolve the relevant issues to the satisfaction of the authorities as quickly as possible. However, they have yet to reopen the certificate and management are concerned about the sustainability of the business there."

Mr Flaherty focused heavily on success in Japan in recent years, with more than 400 turbines installed there.

They underwent rigorous testing to ensure they could withstand earthquakes and 200kmph typhoons, one of which occurred last year. Turbine towers were manufactured locally, while electronic components and nacelles were exported from Galway. A service and maintenance partner was also in place in Japan.

The turbines ranged in size from 110kw to 250kw, making them suitable for smaller sites. The US, Australia, Taiwan and the rest of Asia were being targeted for further export sales.

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