Tower Tech set to expand

It signs deals to supply wind towers to subsidiary of Spanish firm

By Thomas Content, The Miwaukee Journal Sentinel

More expansion is in the works for Tower Tech Systems Inc. of Manitowoc after its parent company raised $100 million in a stock sale.

Tower Tech is a manufacturer of towers used in wind power projects, a growth area within the manufacturing sector given the record pace in the expansion of wind power generation projects across the country.

For Tower Tech, growth is buoyed in part by an agreement it signed this month to supply wind towers to a subsidiary of the Spanish company Gamesa, a leading player in the global wind industry.

Financial terms of the deal weren't disclosed, but Broadwind says it is the largest single order for towers placed by Gamesa with a North American tower manufacturer. Delivery from Manitowoc of the 256-foot, four-section wind towers for Gamesa begins this month.

"That's a significant arrangement to lock in with one of the premier and major wind developers in the U.S.," said Jeff Anthony of Milwaukee, a manager at the American Wind Energy Association and an active participant in Wisconsin's renewable-energy sector.

"Gamesa is establishing their presence in the U.S. and is one of the fastest-growing wind turbine suppliers and project developers in the U.S."

Broadwind Energy Inc. of Naperville, Ill., Tower Tech's parent company, said it planned to raise $100 million through sale of stock to investment funds managed by Tontine Associates. A separate agreement with an unidentified partner would result in additional financing, Broadwind said.

The proceeds will be used to "accelerate . . . current expansion plans" as well as acquisitions and investments in plans to grow production, the company said.

Lars Moller, chief operating officer, said the company would be poised to expand its production of towers and gears from current locations in Manitowoc and elsewhere, as well as through new factories "strategically placed throughout North America."

Broadwind was created after Tower Tech bought Illinois-based Brad Foote Gear Works Inc., a supplier of gears for wind turbines, last fall.

The company moved its headquarters from Manitowoc to Naperville last month. Production in Manitowoc won't be affected by the change, the company said.

In 2007, Broadwind's sales were $29.8 million, and the company posted a net loss of $3.3 million.

Sales attributable to Tower Tech tripled in 2007, to $12.8 million from $4 million the prior year. The Tower Tech Systems division posted gross profit of $4.7 million in 2007, compared with a net loss of $800,000 in 2006.

The growth of Broadwind comes at a time when the manufacturing side of the wind industry is seeing a surge in interest as European wind turbine developers are building factories in Iowa, Pennsylvania and other states, Anthony said. A conference being held this week in Des Moines is attracting 600 participants, and registration for the event had to be closed.

Anthony said the wind power supply chain conference is being held in Iowa because of the leadership of Iowa's state government in trying to mobilize efforts toward the manufacture of wind power components.

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