The Timken Company (USA; NYSE: TKR) has just broken ground in Xiangtan, China on Timken XEMC Hunan Bearings Co. Ltd., its 80/20 joint venture with Xiangtan Electric Manufacturing Co. (XEMC).

The USD $38 million greenfield manufacturing plant is a joint venture dedicated to producing ultra-large-bore precision bearings for wind turbine shaft applications.

The venture was originally announced nearly a year ago.

article: Timken and XEMC in wind energy joint venture
Timken Chairman Ward Timken was in Xiangtan for the ceremony and said: "We are proud of our collaboration with XEMC. We look forward to bringing more than a half century of power-transmission and materials expertise to this joint venture as we collaborate to meet sustainable energy needs in the 21st century."

Scheduled to come online sometime in 2010, and eventually employ approximately 100 workers, bearings produced at the plant will initially be destined solely to meet the needs of China's fast-growing wind energy industry.

Founded in 1936, XEMC brings to the table the ability to leverage its existing market position in China's heavy equipment and large electrical component manufacturing industry. Timken brings expertise in alloy steels, bearing and power transmission system design and engineering, and precision manufacturing knowledge. Combined, the two hope to be able to design and build more durable, reliable, high performance designs for China's fast-growing wind power industry.

The focus on wind energy opportunities in China comes from the country's government. Last year, China's central planners announced it will pursue an energy path designed to address the country's inability to meet fast-growing energy needs via traditional power generation technologies. China has become particularly vulnerable to complaints that its high levels of pollution are caused by decades of simply building more and more low-cost traditional power generation facilities.

Instead, the government is promoting the establishment of a strong power generation substructure involving locally-oriented wind power facilities. With no reliable power grid in place or expected, China's power generation is expected to remain locally-oriented far into the future.

The central government has established a goal that, by 2020, wind turbines will be providing at least 30 million kilowatts of electrical power. The majority of these new wind power generators are expected to be small, low-tech, domestically designed and manufactured units similar to those already available.

But moving to higher output wind generation facilities will quickly become a necessity that requires several leaps in technology. Extremely precise, highly engineered components, instrumentation, and advanced electrical control systems must be deployed -- technologies which have matured in other parts of the world but so far have eluded proper development in China.

And because these systems and technologies are not yet well developed in China, wind energy and related precision electrical component manufacturers from the U.S. and Europe have been quick to move and take advantage of China's long-term government-mandated market opportunity.