Siemens Reduces Production of Large Gas Turbines

Siemens-Energy-ManageSiemens is looking at ways to reduce its production capacity of large gas turbines, one of the manufacturer’s biggest sales contributors, according to Bloomberg. While Siemens said the reduction is due to industry-wide overcapacity, its competitor General Electric said that it does not plan to cut gas turbine output. In fact, GE increased its forecast for the number of gas turbines it plans to ship in 2014 from around 90 to 105.

Siemens CEO Joe Kaeser has predicted revenues to remain flat in 2015 while the company works out operational shortcomings, saying that the company will not be able to match the growth of its rivals until at least 2018.

Profit at Siemens energy division dropped more than 25 percent in the three months through September. Profitability of gas turbines will fall further.

To reduce its dependence on large gas turbines, Siemens is boosting its smaller gas turbine business with the acquisitions of Rolls-Royce Holding’s energy business and oil and gas equipment maker Dressler-Rand. By acquiring Rolls-Royce’s small and medium aero-derivative gas turbines with a power output of up to 66 MW, Siemens is looking to close a technology gap in its gas turbine portfolio.

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