Germany-based renewable energy developer juwi group has announced a comprehensive restructuring and cost-cutting program that will lead to about 400 job cuts globally.
Specifically, juwi cites past amendments to the German Renewable Energy Act and changes to other energy-related policies in Germany. The company says such reforms virtually ceased the development of large-scale solar PV plants in the country, as well as led to a temporary withdrawal of investor confidence in new wind energy projects.
In 2013, juwi says its revenue declined roughly 30% to around EUR 710 million, mainly due to the collapse of the German solar market. The company notes that the loss in sales volume could not be completely consolidated through the expansion of wind energy and the business abroad.
"We have to become aware of the fact that the commitment toward and the understanding for the need of climate protection measures has decreased considerably in many of our core markets," explain Fred Jung and Matthias Willenbacher, founders and CEOs of juwi.
In order to remain strong, juwi says its business activities will focus on project development and EPC, as well as operations and maintenance. Together with Roland Berger Strategy Consultants, juwi has also developed a package of the following measures:
– Reduction of approximately 250 jobs in Germany and 150 abroad from about 1,500 globally;
– Validation and possibly short-term closure or reduction of some activities abroad, especially in Europe but also in the Americas;
– Further short-term outsourcing of non-core business activities, including wind energy towers, racking systems and the sale of electricity; and
– Strengthening of the equity ratio by adding an external investor, as well as adaptation of existing credit contracts according to new business planning.
Furthermore, juwi will reorganize the company's executive board. There is going to be a new chairman focusing on restructuring and financing. Stefan Gros, a banker and economist who has worked at various German and international companies, will become CFO and CRO. Moreover, Stephan Hansen is going to become COO. Hansen has been working as managing director for juwi International GmbH since January.
The former CFO, Martin Winter, and the former COO, Jochen Magerfleisch, left the company on June 30.
"We know that these measures signify a caesura in the history of the juwi group," say Willenbacher and Jung." Yet if we want to secure juwi's future, we do not see any alternative to these severe and painful measures for many employees and for friends of our company."
juwi group nonetheless claims it has a"well filled," project pipeline to keep the company busy. In Germany, for instance, it says it has a pipeline of about 200 MW to 300 MW of wind energy projects.
Abroad, the company says it is still realizing several large-scale wind and solar projects representing more than 200 MW in Uruguay, South Africa, the U.S. and Australia. Moreover, juwi says there are numerous projects in Chile, Japan and Great Britain.