Energy services giant Wood Group is to launch a new joint venture with Siemens as it looks to capture the gas turbine market.
The Aberdeen-based firm will partner with the German company, bringing together Wood Group GTS’ maintenance and power solutions arm with Siemens’ Turbocare business unit.
The new venture, which is expected to begin operation in the first quarter of 2014, will be split 51% to Wood Group and 49% to Siemens, with expectations it could generate around $1billion a year in revenue for the firm.
The company admitted it had found it difficult to compete with equipment manufacturers in the sector, with the link-up set to boost the division’s competitiveness. The new joint venture is expected to save Wood Group around $15million a year within the next three years.
“Today’s announcement is an important step in the ongoing development of the group’s strategy,” said Wood Group chief executive Bob Keiller.
“The JV with Siemens will bring together two complementary businesses and create a differentiated service offering for a global customer base.
“Our joint ventures with OEM [original equipment manufacturer] relationships typically deliver stronger performance, and, as we look ahead, we see good potential for the JV.”
The new project will employ around 4500 people around the world, offering maintenance and after-market repair, design and manufacturing for gas and steam turbine customers.
Wood Group GTS chief executive Mark Dobler will lead the new joint venture, stepping down from Wood Group’s board to take charge of the project. He will continue as CEO of Wood Group GTS in the interim.
“The JV will bring together Wood Group’s capabilities in the areas of asset operations, maintenance, risk management & life-cycle optimization with the aftermarket design, repair & manufacturing capabilities of TurboCare to deliver greater flexibility, greater market reach and an expanded footprint to service customers,” he said.
“[It] will be a significant integrated rotating equipment service provider to the global power generation, oil & gas and industrial sectors.”
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