TPI Composites, Inc., through its direct and indirect subsidiaries, operates as an independent manufacturer of composite wind blades for the wind energy market with a global manufacturing footprint.
The company enables many of the industry's leading wind turbine original equipment manufacturers (OEM) to outsource the manufacturing of a portion of their wind blades through its global footprint of advanced manufacturing facilities strategically located to serve large and growing wind markets. The...
TPI Composites, Inc., through its direct and indirect subsidiaries, operates as an independent manufacturer of composite wind blades for the wind energy market with a global manufacturing footprint.
The company enables many of the industry's leading wind turbine original equipment manufacturers (OEM) to outsource the manufacturing of a portion of their wind blades through its global footprint of advanced manufacturing facilities strategically located to serve large and growing wind markets. The company also provides field service inspection and repair services to its OEM customers and wind farm owners and operators. The company's field service inspection and repairs services include diagnostic, repair and maintenance service offerings for wind blades that have been installed on wind turbines located at wind farms. The company's field service inspection and repair services can be performed up-tower, where a blade technician performs these services in the air or from the wind turbine tower on a wind turbine blade, or down tower, where a blade is first removed from a wind turbine and these services are performed on the ground at the wind farm site or in a repair facility.
The company also leverages its advanced composite technology and history of innovation to supply high strength, lightweight and durable composite products to the automotive market. Composites offer multiple advantages to metallics in the automotive market, including strength, weight and ratio of strength to weight. The company has numerous contracts with OEMs in various stages of maturity from design and development to full scale production. The company is in the process of exploring strategic alternatives to ensure the automotive business is sufficiently funded to execute on its growth strategies as it intends to prioritize capital for growth opportunities in the wind blade business in the near term.
Segments
The company operates through four geographic operating segments: the United States (U.S.), Mexico, Europe, the Middle East and Africa (EMEA) and India.
The U.S. segment includes the manufacturing of wind blades at the company's Newton, Iowa facility in which production has been shut down since the end of the fourth quarter of 2021, and is expected to resume within the next 12 to 18 months, the manufacturing of precision molding and assembly systems used for its automotive business at its Warren, Rhode Island facility, the manufacturing of composite solutions for the automotive industry, which it also conducts at its Warren, Rhode Island facility, wind blade inspection and repair services, its advanced engineering center in Kolding, Denmark, which provides technical and engineering resources to its manufacturing facilities, and its engineering center in Berlin, Germany.
Mexico segment includes the manufacturing of wind blades at the company's three facilities in Juárez, Mexico and two facilities in Matamoros, Mexico, the manufacturing of precision molding and assembly systems and composite solutions for the automotive industry at its fourth Juárez, Mexico facility and wind blade inspection and repair services.
EMEA segment includes the manufacturing of wind blades at the company's two facilities in Izmir, Türkiye, and wind blade inspection and repair services in Türkiye, its wind blade inspection and repair service facility in Madrid, Spain, wind blade inspection and repair services in the United Kingdom, and wind blade inspection and repair services in France.
India segment manufactures wind blades at the company's manufacturing facility in Chennai, India.
Business Strategy
The key elements of the company's business strategy are to grow its existing relationships and develop new relationships with leading industry OEMs; leverage its footprint in large and growing wind markets, capitalize on the continuing outsourcing trend and evaluate strategic acquisitions; continue to ensure that wind energy remains competitive with other energy sources; expand its field service inspection and repair business and introduce new ancillary products and services to help its customers better manage the full life cycle of a wind blade; and focus on continuing innovation.
Wind Blade Manufacturing Operations and Process
The company has developed significant expertise in advanced composite technology and it uses high performance composite materials, precision molding and assembly systems including modular tooling, and advanced process technology, as well as sophisticated measurement, inspection, testing and quality assurance tools, allowing it to produce over 92,000 wind blades since 2001 from its continuing and discontinued operations with a strong, long-term field performance record in a market where reliability is critical to its customers' success. The company manufactures or has manufactured wind blades ranging from 30 meters to over 80 meters in length across its global facilities and has the capability to manufacture wind blades of greater lengths as required by existing or new customers. In combination with its advanced technologies, the company seeks to create manufacturing processes that are replicable and scalable in its manufacturing facilities located worldwide, regardless of cultural or language barriers. Using continuous improvement principles, the company can customize each manufacturing step, from raw materials to finished products.
Precision Molding and Assembly Systems
The company produces hundreds of precision molding and assembly systems, ranging from 30 meters to over 80 meters in length, to support its global operations. The company's tooling solutions include precision wind blade patterns, precision molding and assembly systems, including modular tooling techniques.
Wind Blade Production Process
The company has developed a highly dependable method for making high-quality wind blades. In conjunction with its continuous improvement principles, the company designs its proprietary manufacturing processes to be replicable, scalable and transferable to each of its advanced manufacturing facilities worldwide. As a result, the company can repeatedly move a product from its design phase to serial production while maintaining quality, even in developing regions of the world. Similarly, the company has developed the manual portions of its manufacturing processes based on proven technologies and production methods that can be learned and implemented rapidly by line personnel. The company focuses on safety, consistency and quality control across its facilities, using hands-on training methods and employing repeatable manufacturing processes.
The company uses an advanced form of vacuum-assisted resin transfer tooling process to pull liquid resin into a dry lay-up, resulting in light, strong, and reliable composite structures. In its manufacturing process, fiber reinforcements and core materials are laid up in a mold while dry, followed by a vacuum bag that is placed over the layup and sealed to the mold. The wind blade component is then placed under vacuum. The resin is introduced into the wind blade component via resin inlet ports and then distributed through the reinforcement and core materials via a flow medium and a series of channels, saturating the wind blade component. The company is also capable of employing additional composite fabrication processes, such as pre-impregnated laminates, in addition to its vacuum infusion process.
Wind Blade Supply Agreements
The company's wind blade customers, which include Vestas, GE Vernova, Nordex, and ENERCON GmbH (ENERCON), are some of the world's largest wind turbine manufacturers. According to data from Bloomberg, its customers represented approximately 34% of the global onshore wind energy market, approximately 77% of that market excluding China, and 87% of the U.S. onshore wind turbine market over the three years ended December 31, 2022, based on MWs of energy capacity installed. In its collaborative dedicated supplier model, the company's customers are incentivized to maximize the volume of wind blades purchased due to pricing at higher purchase volumes.
Vestas
In December 2023, the company extended its supply agreements with Vestas at its manufacturing facilities in India and in Matamoros, Mexico through 2024. The term of the Matamoros supply agreement will continue until the one-year anniversary of the date upon which the company commence production of a new Vestas wind blade model on up to four manufacturing lines at its Matamoros manufacturing facility.
GE Vernova
The company has two supply agreements with GE Vernova to manufacture wind blades from three manufacturing facilities in Juárez, Mexico. In October 2022, the company signed an agreement with GE Vernova that enabled it to secure a ten-year lease extension of its Iowa manufacturing facility. Under the agreement, the company and GE Vernova plan to develop competitive blade manufacturing options. In December 2022, the company extended its supply agreements with GE Vernova for ten of its existing lines in two of its Juarez, Mexico manufacturing facilities through December 2025, and in December 2023, the company added a third manufacturing facility in Juarez, Mexico for four new manufacturing lines, also through December 2025.
Nordex
Generally, the company's supply agreements with Nordex provide for a minimum number of wind blade sets to be purchased by Nordex each year during the term, and it commits to dedicate a specific number of manufacturing lines to Nordex for each of the years under the supply agreements. The company supplies wind blades to Nordex from its manufacturing facilities in Türkiye, and India, and from a manufacturing facility in Matamoros, Mexico that it took over from Nordex in July 2021, pursuant to a three-year supply agreement expiring on June 30, 2024. The company is in the process of transitioning the operation of this Matamoros manufacturing facility back to Nordex. In December 2023, the company extended two of its supply agreements with Nordex at its Türkiye manufacturing facilities for eight lines through the end of 2024 and added two new lines through the end of 2025.
Research and Development
For the year ended December 31, 2023, the company's research and development expenses totaled $1.4 million.
Competition
The company's competitors include LM Wind Power (a subsidiary of GE Vernova) and other independent wind blade manufacturers such as Sinoma Science & Technology Co. Ltd., Shanghai Aeolon Wind Energy Technology Development (Group) Co., Ltd., Aeris Industria E Comercio De Equipamentos Para Geracao De Energia S.A. and ZhongFu Lianzhong Composites Group Co., Ltd., as well as regional wind blade suppliers in geographic areas where its current or prospective manufacturing facilities are or will be located.
Automotive Products
Automotive products, including buses, trucks, electric vehicles and high-performance automotive products and components, are ideally suited for the company's advanced composite technology because of the benefits derived from weight reduction, corrosion resistance, strength, durability and lower upfront capital costs. These benefits should allow the company to develop structural composite solutions to assist its customers in developing electric vehicles, including light, medium and heavy-duty trucks, buses and automobiles with clean propulsion systems or in meeting new and developing fuel economy standards.
In addition, by producing a range of composite structures, the company is able to leverage the materials and manufacturing process technology and expertise developed through one project to maximize production quality, improve performance and minimize costs across its other manufacturing efforts, including its wind blade business. The company's projects for customers in the automotive market have historically generated project-related revenues for a specific duration.
The company's facilities in Warren, Rhode Island and Juárez, Mexico manufacture products for customers in the automotive market using, in some cases, similar proprietary and replicable manufacturing processes that it uses to produce wind blades. The company's projects for customers in the automotive market include, or have included, the supply of all-composite bodies for electric buses and last-mile delivery as well as automated people mover systems for airports.
Regulation
The company's operations are subject to various foreign, federal, state and local regulations related to environmental protection, health and safety, labor relationships, general business practices and other matters. These regulations are administered by various foreign, federal, state and local environmental agencies and authorities, including the Environmental Protection Agency (EPA), the Occupational Safety and Health Administration of the U.S. Department of Labor and comparable agencies in Mexico, Türkiye, India and individual U.S. states. In addition, the company's manufacturing operations in Mexico, Türkiye and India are subject to those countries' wage and price controls, currency exchange control regulations, investment and tax laws, laws restricting its ability to repatriate profits, trade restrictions and laws that may restrict foreign investment in certain industries.
Further, as a U.S. corporation, the company is subject to The Foreign Corrupt Practices Act of 1977 (FCPA), which generally prohibits U.S. companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or keeping business. As a U.S. corporation with global operations, the company is also subject to foreign antibribery laws and regulations in the countries where it conducts business, including the U.K. Bribery Act and the India Prevention of Corruption Act.
History
TPI Composites, Inc., formerly known as LCSI Holding, Inc., was founded in 1968. The company was incorporated in 2004.
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