The Woodward News

May 23, 2011

Siemens bringing wind service distribution center to Woodward

Rowynn Ricks
Woodward News

Woodward, Okla. — The Germany-based Siemens Energy has announced plans for implementation of new wind service warehousing operations in Woodward.

Siemens has already been utilizing a 12,000 sq. ft. warehouse in Woodward's industrial park by the airport, but will now expand to utilize another 52,000 sq. ft. facility, according to Woodward Industrial Foundation President LaVern Phillips.

According to a Siemens press release, "with a total of 64,000 square feet, the combined main component, tooling and spare parts facilities will be Siemens' largest wind power service distribution center to date in the U.S."

Phillips said the expansion is part of efforts by Siemens to centralize their service operations for more than 250 of their wind turbines which are already in service or are in the process of being installed in the area.

"In the past, wind farms such as OU Spirit, Crossroads and Keenan 2, which all use Siemens turbines, would just stockpile parts at each location," Phillips said.

But once construction is finished to renovate the interior of the 2 buildings at the Woodward industrial park, he said Siemens will be able to "centralize those parts and have one place from which they can send out parts to all locations."

These parts would include wind turbine blades, drive assemblies and generators, according to the press release.

In addition to wind farms in Northwest Oklahoma, the distribution center would also service Siemens customers in Western Texas, said Tim Holt, Siemens' CEO for renewables service.

Holt said the service region would stretch all the way to the Amarillo area and could even include "any additional installations in New Mexico" that might come in the future.

Currently though, the Woodward distribution center will service "roughly 500 to 600 turbines" in Oklahoma and Western Texas, Holt said.

"Woodward's location in the central region of the U.S. gives us great access to our wind power customers in that area and allows us to address their distribution needs in a cost-effective and efficient timeframe," Holt said in the press release.

When placing distribution centers, Siemens looks for locations where they can "get parts and tools to sites in 8 to 10 hours," he told The News in a short phone interview Monday afternoon.



CONSTRUCTION NEEDED

Because of the need for renovations to the 52,000 sq. ft. facility, it will take some time before the distribution center is fully operational.

"The building will be built out for a move in date of Dec. 2011," Phillips said.

The Woodward Industrial Foundation will be working on the infrastructure of the building including connecting water and sewer services and providing "air conditioning for the whole building," he said.

In addition, he said, "we're going to be building out some offices" as well as "installing a 30-ton crane, new loading docks and a security system."

Phillips said the Industrial Foundation is "handling the costs of all of it through different funding."

That includes assistance from Siemens, who is "putting money into it also," he said.

Siemens currently has a 5-year lease with the city for use of the 2 warehousing facilities at the industrial park, with 2 additional 5-year renewal options, Phillips said.

Within the first 5 years, Siemens "expects to create up to 40 'green-collar' jobs at the facility," according to a release.

In addition to warehouse jobs, Holt said other positions will include several within the fields of logistics, distribution and maintenance.

Phillips added, "Those 40 jobs do not include the people they already have working out at the OU Spirit and Keenan wind farms."

"It also does not include the transportation people who will be coming in and out picking up replacement parts for delivery," he said.

Holt said Siemens is still evaluating whether to hire their own drivers or possibly outsource through a local transportation service.

"But even at 40 employees, their payroll will be around $2 million," Phillips said, noting that is money that will be pumped into the Woodward area economy.



A YEAR IN THE MAKING

Siemens' announcement was made Monday morning during the American Wind Energy Association (AWEA) annual convention in Anaheim, Calif.

Phillips said the announcement comes almost exactly one year after the Woodward Industrial Foundation first met with representatives with Siemens at the 2010 AWEA conference in Dallas.

Gov. Mary Fallin was in attendance for the announcement as she was leading a delegation of state energy partners at the convention as part of efforts to market Oklahoma as the place to do business for wind energy development, according to a press release from her office.

In the Siemens' release, Fallin said Siemens' choice of Woodward as the location of the new distribution center "is a testimony to Oklahoma's combination of outstanding wind resources, business friendly environment, skilled workforce and education programs."

"Siemens Energy is an international leader in the wind industry and we are excited by this new opportunity in Woodward and partnership with OG&E," she said in the release.



PARTNERSHIPS

In addition to efforts by the Woodward Industrial Foundation, Phillips said that OG&E and Competitive Power Ventures, which both operate wind farms in the area, "were instrumental in the process of bringing Siemens to Woodward; it would not have happened without them."

Holt said it was this support from the business community, in addition to Woodward's location, that really spurred Siemens to choose the Northwest Oklahoma community for the distribution center.

"We're very glad for the excellent support we got from the business community and from the city of Woodward and the Woodward Industrial Foundation," Holt said.

Alba Weaver, OG&E economic development project manager, said OG&E's involvement in the recruitment process "is all part of the commitment the company has to all the communities we serve."

"We have a commitment to not only provide an energy service to the communities but also to partner with them and assist in any way we can to make them grow," Weaver said.

She said OG&E's partnership with the city of Woodward and the Woodward Industrial Foundation "has been in place a long time."

"So it's a joy to see something of this magnitude to come to fruition," she said.

As OG&E is a Siemens customer, Weaver said Monday's announcement was doubly significant for OG&E because it not only meant helping a partner community, but also "in regards to the servicing of our turbines because the parts and tools will be that much closer."

"This will help turnaround to get things done much, much faster," she said.

For that, Weaver said OG&E is just as grateful to the Woodward Industrial Foundation for its partnership in the recruitment of Siemens.

"We would like to say we're extremely happy to have such a wonderful partnership with the city of Woodward and the industrial foundation," she said. "It's great to have a partner to not only assist in the process, but who is willing and eager to go the extra mile.  LaVern Phillips and the Woodward Industrial Foundation does an excellent job."

A phone call for comment from Competitive Power Venture's Sean Finnerty, who is the senior vice president of renewable development, was not immediately returned Monday.



A CATALYST

Holt said Siemens is "very glad to be in Woodward."

Phillips said Woodward is equally delighted and "extremely honored" to welcome Siemens to the community.

"We needed a service company to locate in Woodward because we're in a strategic location for wind energy and Siemens would be our number one choice," he said, noting "Siemens is one of the leading and most respected companies in the world and also the most respected in wind energy."

According to the Siemens release, the company "now enjoys a number three position in the (wind) market in terms of installed capacity."

The company has "a combined capacity of more than 4,200 MW in the U.S., which is enough to supply power to more than 1.25 million homes," the release states.

Beyond the prestige of partnering with such a recognized company, Phillips said he believes Siemens' move to Woodward will spark additional interest from other wind service companies.

"This is the key catalyst for recruiting additional businesses to Woodward to service this expanding wind energy industry here," he said.

"We're extremely excited to make this announcement because it will be a benefit for Woodward and the economy of Woodward for existing residents and for future generations," Phillips said.