Sif Expects to Greenlight Production Capacity Expansion Plan in July

The Netherlands-based offshore foundations manufacturer Sif Group is on track to take a Final Investment Decision on the investment plan to expand its production capabilities in July.

According to Fred van Beers, CEO of Sif Group, market demand has made the need to increase the production of foundations, both in size and quantity, ”more obvious than ever”.

Van Beers added that ”customer support” for the new production capacity is ”one of our cornerstones for taking a Final Investment Decision.”

”From this perspective, we are happy to be in exclusive negotiations on approximately 400 kilotons launching capacity for the new factory,” Van Beers said.

”Furthermore, clients have, subject to FID, committed to substantial funding. The overall conclusion is that we are moving closer to clarity on the capex amount and on the total committed financing. This implies that we expect to take a Final Investment Decision in July 2022.”

The decision to invest in the new production capacity is also supported by new offshore wind targets set by a number of European countries, according to Van Beers, adding that the new targets are expected to put additional pressure on the already challenged supply chain.

”Regulatory and governmental offices can play a substantial role by implementing a more efficient and balanced permitting and tender approval process for renewable energy projects,” Van Beers said.

”Furthermore, political support (like accelerated building and environmental permitting processes and instruments to support investments in production capacity for renewable energy) to facilitate a supply chain ramp up throughout Europe is key to come as close as possible to achieving the targeted ambitions.”

Van Beers added that Sif executed its orderbook in the first quarter of 2022 while managing the operational effects caused by the war in Ukraine such as the prices of energy and the availability of steel

”We were able to secure steel deliveries and we expect to be able to offset the additional costs for electricity and gas against production efficiency. We maintain our full-year EBITDA outlook, as communicated in March, to realize a slightly higher adjusted EBITDA in comparison to 2021, subject to macro-economic and political developments,” Van Beers said.

The mid- to long-term impact of the war in Ukraine with regards to the prices and availability of steel is hard to predict and Sif ”is continuously monitoring this specific element”, Van Beers said.

Sif recorded a total throughput of approximately 48 Kton of steel in the first quarter of 2022, as compared to a 44 Kton throughput in the first quarter of 2021.

During the quarter, the company carried out the production of monopiles and transition pieces for the Dogger Bank A, monopiles for the Maasvlakte 2 onshore wind farm, as well as providing marshaling services to Siemens Gamesa on the Hollandse Kust Zuid project.

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