UPDATE 2-REpower plans capacity expansion, confirms outlook

(Adds details, background and share price)

FRANKFURT, March 31 (Reuters) - Wind turbine maker REpower RPWGn.DE plans to more than double its production capacity in the next two years to handle further strong growth, especially in Europe and North America, it said on Monday.

REpower, whose major shareholder is India's Suzlon Energy (SUZL.BO), the world's number four wind turbine maker, confirmed its outlook for its fiscal year 2008/09, starting on April 1, which it had raised earlier this month due to a strong order backlog.

It expects sales to rise to 1.1 billion euros ($1.7 billion) in the year ending March 2009 with an operating margin of 5.5-6.5 percent. It sees further sales growth of 40-50 percent for 2009/2010 with rising margins, it said.

Demand for renewable energy is booming as climate-change concerns mount and oil prices hover near record highs.

REpower, which competes with the world's leading wind turbine maker Vestas (VWS.CO), units of global power generation giants Siemens (SIEGn.DE) and General Electric (GE.N) and Spain's Gamesa (GAM.MC), sees particularly strong growth in Europe and North America, it said.

REpower plans to more than double its production capacity in the next two years from 1,300 megawatt (MW) now, investing 86 million euros ($135.7 million) in 2008/2009.

This would not let REpower pay a dividend to shareholders for now, finance chief Pieter Wasmuth said.

REPOWER FIGHTS COMPONENT DELAYS

A key risk was timely deliveries from swamped components suppliers, which has hampered growth across the industry and could continue into 2009.

"We are trying to minimise risk as well as we can and at the moment we don't see a problem there," Chief Executive Per Hornung Pedersen said.

REpower has decided to integrate production further and is setting up its own plant for rotor blades, for example.

Suzlon holds 33.66 percent of REpower voting rights, France's Areva CEPFi.PA has 29.9 percent and Portuguese conglomerate Martifer (MARTI.LS), which is 37.5 percent owned by Portugal's top builder Mota Engil (MOTA.LS), holds 25.4 percent.

Its shares have risen almost a fifth this year and were up 2 percent at 152.14 euros by 1445 GMT, while Germany's technology index .TECDAX eased 0.3 percent. (Editing by Paul Bolding)