Becoming a Global Offshore Wind Substructure Operator
Japan Also Expanding Offshore Wind... Creating Opportunities in the Global Market
GS Entec, a GS Group affiliate specializing in chemical plant equipment manufacturing, announced on the 9th that it will invest 300 billion KRW to become a global offshore wind foundation structure business operator. Offshore wind foundation structures refer to the key facilities that support offshore wind turbines on the seabed.
GS Entec plans to invest 214 billion KRW in the introduction of the latest automation equipment and 86 billion KRW in other buildings and facilities. GS Entec has secured about 90 billion KRW from financial investors such as Dominus Investment and Simone Asset Management. Once the investment is completed over the next two years, it will be able to produce various sizes of monopile structures quickly and accurately.
It is unusual for GS Entec, which has posted losses in the 10 billion KRW range for three consecutive years, to announce such a large-scale investment. GS Group’s addition of offshore wind foundation structure manufacturing as a new business to GS Entec, which has traditionally focused on manufacturing chemical equipment for oil refineries, is interpreted as a determination to develop it as a core subsidiary driving the group’s eco-friendly future business strategy.
GS Group stated, "This large-scale investment and business transformation by GS Entec aligns with the group-level new business strategy of 'future growth through digital eco-friendliness' and is a very representative case of the realization of GS Group’s new business strategy."
Huh Tae-soo, Chairman of GS Group, has consistently emphasized, "We should not respond passively to changes in the business environment such as climate change and decarbonization but rather actively seize new business opportunities to pursue future growth."
Offshore wind power substructure of Sif in the Netherlands. GS Entec signed an exclusive technology license agreement through a strategic partnership with Sif, the world's No. 1 company in offshore wind power substructures, based in the Netherlands last year. [Photo by GS Entec]
GS Entec, a subsidiary of GS Global, was established in 1988 and has primarily engaged in manufacturing chemical equipment for oil refining and petrochemical plants. Since the 2020s, it has actively pursued business transformation in line with GS Group’s eco-friendly future business strategy.
Last year, GS Entec signed an exclusive technology license agreement through a strategic partnership with Sif, the world’s number one company in offshore wind monopile foundation structures based in the Netherlands. GS Entec transformed its existing chemical equipment manufacturing plant in Ulsan into an offshore wind monopile manufacturing factory through technical cooperation with Sif and began producing its first products in March.
The monopile method involves welding large steel plates to create cylindrical structures that serve as the foundation for offshore wind turbines. Compared to existing foundation methods such as floating, Tri-Pod, and Jacket, the monopile method has shorter production times and lower costs, making it preferred in the global market.
Based on this competitiveness, GS Entec recently secured a contract to supply 64 monopiles worth 200 billion KRW for the 365 MW Nakwol offshore wind project in Yeonggwang, Jeollanam-do, led by Myeongun Industrial Development, with plans to complete the entire project by September next year. Additional orders are expected due to the expansion policies of the domestic offshore wind market.
Furthermore, with Japan declaring the expansion of offshore wind power, GS Entec’s strategy is to open the door to the global market through the advancement and expansion of its production facilities. The Japanese government announced in its 6th Basic Energy Plan in October 2021 that it aims to increase the share of renewable energy to 36-38% of power generation by 2030 and set a goal to expand offshore wind power to 10 GW by 2030 and 30-45 GW by 2040 through the announcement of its first offshore wind vision.
GS Entec succeeded in turning a profit in the first quarter of this year. GS Group said, "Financial structure improvement is expected in the future," adding, "Entec will act as a catalyst to accelerate GS Group’s ESG management as well as create synergy with GS Group’s power generation companies such as GS E&R and GS EPS through its entry into the offshore wind new business."
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