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June 22, 2012—By deploying radio frequency identification technology at its facility, Idealcombi, a custom window and door manufacturer based in Denmark, has successfully automated aspects of its production process, reports Arne Burlund, the company’s IT director. As a result, he says, Idealcombi has doubled the capacity of its plant without requiring additional employees.

With EPC Gen 2 passive ultrahigh-frequency (UHF) tags attached to products, the system automatically adjusts the setting of assembly machines, based on specifications required by a particular order. Previously, the entire process was performed manually. The RFID technology, provided by Prosign RFID, also enables the firm to create a record of its production processes. In the event of a defect or problem involving a specific product, the manufacturing process can be easily retraced.

At its 88,000-square-meter (947,200-square-foot) factory in Denmark, Idealcombi operates a series of machines for carrying out such tasks such as painting, drilling and installing brackets, and competes with manufacturers that produce similar products in nations where labor costs are lower. Therefore, the firm had sought a solution that would help reduce labor costs, while allowing it to continue its operations in Denmark.

The company first met with Prosign approximately four years ago, says Michael Jensen, Prosign’s RFID director and CEO, with the goal of doubling its capacity without increasing its number of employees. At that time, its staff adjusted the machines manually in order to meet the specifications of each order, which required the company to print instructions on a piece of paper that followed each window or door as it moved from one machine to the next. The staff could then read the instructions and set the machines accordingly.

Vestas Wind Systems of Denmark has dropped plans to build a wind turbine factory in Kent, dealing a blow to the UK manufacturing sector and government hopes of creating jobs in the renewable energy industry.

Vestas, Europe’s largest wind turbine maker by sales, last year picked the former naval dockyard at Sheerness on the north Kent coast as the proposed site for a factory making its 7MW offshore wind turbines. With a rotor diameter of 164m, the V164 is Vestas’s largest turbine model and the first prototype is due to be delivered in 2014.

The Sheerness plant received planning permission from Swale Borough council in May and had hoped to create up to 2,000 jobs. But Vestas said on Friday that the plant would now not proceed with the investment. The company declined to give a reason, but analysts pointed to uncertainty surrounding energy market reforms and concerns about possible cuts to government subsidies for wind power as major factors.

Juan Araluce, chief sales officer at Vestas, said the group’s “strong commitment to the development of both the offshore and onshore wind industries is not affected by this decision”, and that Vestas would “remain active across the two markets in the UK as they both continue to show considerable potential”.

Vestas has a turbine testing site on the Isle of Wight, but the group closed its factory making turbines on the island in 2009, citing a lack of orders.

Charles Hendry, the energy minister, said Vestas’s decision was “disappointing, in particular for the local economy in and around Sheerness”.

He added: “Promising offshore wind manufacturing projects are being taken forward by other firms, including Siemens on the Humber and Gamesa in Leith.”

Severn Trent is to issue up to £100m-worth of RPI-linked bonds to take advantage of UK savers’ demand for inflation-proof returns and diversify into “cheaper” sources of funding.

The FTSE 100 water and sewerage group, which serves 4.2m homes in the Midlands and mid-Wales, announced the launch of a 10-year sterling bond, offering a 1.3 per cent annual coupon and a repayment of capital that will both rise in line with the retail prices index. Unlike its previous index-linked issues, however, the 10-year bond will be offered via eight private-client stockbrokers in minimum tranches of £2,000.

In issuing an index-linked bond specifically for the retail market, Severn Trent has become the fifth UK company to identify savers seeking a real return on cash as a source of cost-effective funding.

Last September, National Grid offered a 10-year RPI-linked issue that attracted more than £282m from private investors in an offer that was twice extended to meet demand. A month later, Tesco Bank raised £60m with an eight-year issue. Earlier this year, social housing group Places For People secured £40m through its first inflation-linked bond. RBS issued the first index-linked retail bond in 2010.

Mike McKeon, Severn Trent’s chief financial officer, said that the group would cap its first retail issue at £100m, but return to the market annually if it proved successful.

“We don’t want to tap out the market if want to come back in a year or 18 months,” he said.

Although the retail bonds will comprise a small fraction of Severn Trent’s £4bn net debt, Mr McKeon said that this form of funding could become more substantial in future. “If we raise £50m-£100m a year over five years and beyond, it could be 10-20 per cent,” he said. “Overall, the economic cost it is cheaper for us. It’s not attractive to offer coupon of 5 per cent, as we can already borrow cheaper than that. But an RPI-linked issue is attractive for us terms of cash flow.”

KPMG, which advised on the issue, claimed that more companies would turn to the retail market in future. “This will provide important alternative funding options for borrowers, especially as the bank debt markets look likely to remain under some stress in the future,” said partner Clive Gibbard.

However, financial advisers warned that individual retail bonds exposed savers to additional credit risk. Severn Trent’s bond is being issued by the plc, not its regulated water business, so investors are not protected by regulatory “ringfencing” of capital. It is expected to be rated investment grade Baa1 by Moody’s and BBB- by Standard & Poor’s, but Canaccord analysts noted that National Grid’s RPI-linked issue currently offers higher yield from a higher rated issuer.