Wind firm picks Portland

A Danish wind-turbine manufacturer announced Wednesday that it plans to open its largest worldwide plant in Portland by next summer and offer 1,000 jobs by the
beginning of 2004.

Scott Learn
Oregonian

Vestas Wind Systems, coveted by the city and state for its jobs and pro-environment profile, said Wednesday that it is entering final negotiations with the city, state and
Port of Portland to build a 230,000-square-foot plant on 113 acres in North Portland’s Rivergate industrial area.

The company dubs its huge turbines, up to 242-feet tall with blades up to 77 feet long, "the power plants of the future," insisting they are cost-competitive with traditional
power sources. To meet surging U.S. demand, it plans to build 300 of them a year in Portland, enough to supply energy for 135,000 Northwest homes.

Johannes Poulsen, Vestas’ managing director, said that he does not expect final negotiations to be an obstacle. The plant will serve as the company’s U.S. headquarters.

"It’s more like a formality to have it finalized," Poulsen said. "It’s our intention to get started as quickly as possible, and we need to do that to meet our deadlines."

At 8.1 percent, Oregon has the highest unemployment rate in the nation, and the Vestas announcement amid the state’s economic downturn was greeted with joy
Wednesday by federal, state and city leaders, including Portland Mayor Vera Katz.

Katz and other city leaders are hoping Vestas will put Portland in the "green industry" vanguard, helping the city attract similar businesses, just as landing silicon wafer
manufacturer Wacker Siltronics in the 1970s helped promote the Silicon Forest.

"We truly have a company that will mark a cornerstone of a sustainable economy for this community and for the state," Katz said. The company expects to use "green
building" techniques in constructing the plant, which officials said will generate little pollution.

Vestas is in line for a local property tax break of $7 million to $10 million over five years, officials said, and should be eligible for millions more in federal and state tax
credits. Katz’s office said the company may be eligible for $800,000 in reduced permit and developments fees. The state is also chipping in $750,000 for worker training,
likely at Portland Community College, that will directly benefit the company.

Vestas would be the region’s largest new manufacturer since Gresham landed an LSI Logic plant in 1995, officials said, and Portland’s largest since recruiting Wacker
Siltronic.

Start-up investment $35 million How much Vestas will invest in the plant is unclear. The company’s announcement Wednesday said it planned to put the equivalent of $35
million in the plant, first opening in summer 2003. But Portland Development Commission and state officials said the investment will eventually total $100 million to $150
million.

Poulsen said the plant will employ hundreds of welders, workers skilled in molding fiberglass, electrical and mechanical trades people and unskilled manufacturing
workers. Vestas American Wind Technology, the company’s American subsidiary in Palm Springs, Calif., will move its 200 sales and technical support jobs to Portland.

And jobs for engineers and scientists could run as high as 200, Oregon officials said. Development commission officials said they expect entry-level jobs to start at $10 to
$12 an hour minimum.

Denmark is a leading country in producing wind turbines, increasingly popular as alternative energy sources.

The U.S. Senate’s March 9 vote to extend a wind-energy tax credit for two years also boosted the company’s expectations for U.S. sales. Those sales increased sixfold
in 2001.

The tax credit is due to expire in 2004, but Poulsen said the Portland plant can remain in operation even if the credit is not renewed. The company expects that U.S.
demand will absorb the 300 turbines the plant can produce annually, he said, but the plant also could supply Canada, Central and South America and Asia.

"We’re not looking to build 70,000 square meters of production dependent on a further extension," he said.

Transportation a factor Poulsen said the availability of workers, access to transportation and proximity to Northwest projects that are using Vestas turbines were key to
the decision. The Rivergate land is close to rail lines and the Port’s Terminal 6, which the company can use to receive shipped parts and export turbines.

Vestas’ largest customer doing business in the Northwest is FPL Energy, which developed the Stateline Wind Project straddling Eeastern Oregon and Washington and
the largest wind project in the Western United States.

FPL, based in Juno Beach, Fla., announced an agreement this week to buy 170 additional Vestas turbines. The company also has an option to purchase as many as 650
additional machines, news that sparked a 4 percent increase in the company’s stock Wednesday.

Bill Wyatt, the Port’s executive director, said Vestas will build its own plant but lease the land from the Port at market rates, from $1.7 million to $2 million a year.
Negotiations continue over who will pay for improvements, he said, including a new rail spur.

In return for tax breaks, the company would have to agree to retain 50 percent of its employees for at least two years; use minority, women and small business
contractors during construction; and strive to hire workers from North and Northeast Portland, among other requirements.

Andersen Construction is the general contractor, and IDC of Portland is the project designer.

Global warming concerns, particularly in Europe and Asia, along with the U.S. production tax credit, are driving huge leaps in wind power worldwide.

Vestas began producing wind turbines in 1978. It now claims a 24 percent market share in wind-power manufacturing on sales that jumped 50 percent in 2001 and profits
that increased 39 percent. The company expects sales to nearly double by 2003.

Vestas and associated companies have roughly 5,400 employees worldwide, with multiple production facilities. Last year, the company also announced new production
facilities in Scotland and Germany. Poulsen said the Portland plant, with the ability to produce equipment that generates 500 to 700 megawatts a year, will be the
company’s largest.

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