Energy for the future EKOL

ENERGY FOR THE FUTURE

The leading Czech turbine and boiler manufacturer EKOL, which has become one of the major players in its sector on a global scale, has recently been acquired by a new owner. Romana Moares spoke to the company founder and managing director, Mr Stanislav Vesely, about what made him sell his company and what this milestone means in terms of its further development.

Brno-based EKOL’s core business is the delivery of complete energy generation units of up to 100 MW (including design, production, erection and commissioning), making it one of the leading European producers in its sector. Since its establishment in the early 1990s by the current managing director Mr Vesely, EKOL has won customers for steam and gas turbines in many countries in Europe and further afield. Export represents approximately 90 per cent of production and until today the company has delivered and commissioned over 250 environmentallyfriendly modern combustion chambers for various types of gas turbines.

The name EKOL is derived from the word ‘ecology’. From the very beginning, the company focused on producing designs to reduce emissions of harmful substances in burning fossil fuels in gas turbine combustion chambers and this has remained the focal point up to the present day. “Environmental upgrades of gas turbines have been our contribution to the worldwide movement for environmental improvement. With our scientific and research staff, experience and the latest technology, we can offer our lowemission solution for any gas turbine,” says Mr Vesely.

Turning point

While the company has been going from strength to strength, Mr Vesely, who has been in charge of EKOL for 25 years, felt that the time had come for a strategic change. “We have been thinking of a strategic partner for some time, to enable further expansion and to progress to the next level on global markets. By that I mean deliveries of sophisticated capital equipment to major players in the power sector,” he says.

The vision was to choose a strong company in a similar business. In the end, the management opted for Chinese engineering company Xi’an Shaangu Power, which bought a 75 per cent stake with an option for the remaining share for the three to six years following the acquisition.

ShaanGu, a member of the Shaanxi Blower Group, is the largest Chinese producer of industrial compressors and one of the largest Chinese companies focused on deliveries to the power engineering, metallurgical and petrochemical industries. Furthermore, according to its management, it wishes to become one of the leading world producers and suppliers in the field of turbines and boilers.

“After long and hard consideration, we have come to believe that the partnership would result in numerous synergies beneficial for both companies – they wish to establish a presence in Europe, we want to expand into South East Asia,” explains Mr Vesely. EKOL will also help the new Chinese owner to raise the technical standard of its own turbines, using the Czech company’s extensive know-how and experience. For this purpose a research and development centre in Brno is being established to secure both companies’ turbines unification with a view to reducing production costs, shortening delivery times and further improving market response.

Eastern promise

Was it not difficult to sell the successful company to which Mr Vesely had dedicated a significant part of his life? “Of course the decision was not easy, but the fact was there was no one in my family, nor in the families of the other two Czech co-owners, who would take over. A strategic partnership was the only feasible way forward. By this we hope to secure further company development, particularly the transition from unit production to deliveries of whole power plants or heat & power plants, and expansion and a firm footing in markets outside Europe,” he reflects. “Shaangu is able to finance large projects. It will be possible to reduce

production cost as a result of the acquisition and thus to compete with other companies on the Asian market.”

For the time being, EKOL should supply Shaangu with steam turbines for driving compressors as well as for driving complete technological units that are supplied to the Asian market by the Chinese company.

The deal is the first case in which a Chinese publicly tradable company has acquired a Czech company. As mentioned earlier, both companies want to jointly establish a research & development centre for the development of compressors, steam turbines, gas turbines, boilers and power engineering equipment. They will cooperate with the Technical University of Brno and other technical universities in the Czech Republic and abroad.

New future

EKOL’s product and service portfolio remains, so far, unchanged and the acquisition has shown its first tangible benefits: the Chinese have already ordered three turbines from EKOL, which, in times of falling prices and reduced investment in the energy sector, hints at a promising future.

However, as a result of the stagnation in the conventional power sector, EKOL has been considering expansion into other sectors where its technologies find good use, primarily waste management. The wisdom of such a move has been evidenced by two major contracts for waste incineration plants in the Czech Republic and Poland. “Waste management is a business of the future with huge potential. Demand for incinerating stations will undoubtedly increase and we certainly want to capitalise on this development,” says Mr Vesely.

“Our main goal is to establish a position among the world’s leading manufacturers and impress the name of our company on the subconscious of the world and on industry professionals. EKOL should be a synonym for turbines for technical college students anywhere in the world,” he claims.

Given the continuous growth of his company over the past 20 years and his recent success with the Chinese, his aspirations may not be far from the truth. n