Business. WEG is growing its market share, and in the last few years, we're also increasing our presence and offering solutions for motion drive for our clients. Taking this all in analysis, for the first six months, we have a very positive performance in the external market, in spite of a slower investment rhythm in investment. It's worth mentioning that in regions such as Asia and North America, we have shown a very good performance for WEG, and also adding the acquisitions that we have made in 2024 with Marathon, Cemp, Rotor, and Volt in Turkey. We have had, in the external market, in the foreign market, a performance that was a little slower, 4%, but segments such as oil and gas and water and sanitation were positive in this period.
Let's now talk about the transmission, distribution and generation, which is great, where executives are standing up, and it's representing 22% of the consolidated revenue, and that growth is coming from the fact that WEG is exposed and offering solutions in this moment of energy transition, such as renewables and the growing demand for energy geared towards artificial intelligence. Here, we're talking about transformers, substations, and complete solutions for solar, hydro, and wind energy. The external market, we have had excellent performance, 28% growth, especially spurred by the demand on the T&D demand in all regions in which we have productive units, but with a strength in the United States and North America.
Another thing to stress is the very positive contribution of the alternators that were bought from the Marathon, and WEG has been announcing it's growing in this and growing, and we are able to capture more market opportunities. In the domestic market, we also are growing in the T&D, and in this first semester, we have had the contribution of the solar energy, and because of the fact that we don't have wind generators, WEG was still able to grow 8% in this first semester. Speaking about commercial and appliance motors, we have had a very positive performance in the market, in the foreign market, and that is because of our performance in the United States, and in Brazil, 11% growth. Segments such as air, AV, motor pumps, and leisure have contributed to this growth. Paint and varnishes, here we are speaking about industrial paints, powder paints, and industrial varnishes.
And in the internal market, we had a 12% increase with a positive performance in several segments, with special stress in water and sanitation and in agricultural implements. In the foreign market, our growth comes from the powder paints in Mexico, but we're working on the internationalization of this business. In the last year, we have announced the construction of a paint plant for paints in Mexico, and that is going to be delivered next year. And recently, we have announced the Heresite acquisition from the United States that is going to help us in this process. Let us now speak a little bit about the operating results. And here, the message is WEG is finding opportunities to increase its performance with the growth in its revenues. As I said, in the first semester, we have grown 17.2%.
We've reached 20 billion growth, and along the last years, we are improving our EBITDA margin. We've had, in the last quarters, an oscillation of these margins that, in some way, were expected, because, as I said, in the first semester of this year, we've had a delivery that was very important in the solar, centralized solar energy that have lower margins than the consolidated margins of WEG. But still, we finished the first semester with a 21.9% margin that is fluctuating according to what has been delivered in the last two years. 22% in 2024, 21.8% in 2023. 20% increase in the EBITDA, thanks to the contribution of our business, most of our business, especially T&D, and constantly because of our programs of streamlining of costs and streamlining of our capacity of utilization of our assets. Speaking now about our investments, we've closed the first semester.
We have invested BRL 1.205 billion. It's worth mentioning that our budget is BRL 2.5 billion, and we are still a little bit lower than half, and we still see in this slide here that historically, we're investing about 3%-5% of our operating revenue. The focus of investment has not changed. We are focusing on the long term, searching the increase of capacity, internationalization, and modernization, and automation of our units, both in Brazil as in the foreign markets. In this first semester, we are still a little bit higher than this last year's reference, but that is a reflection of the volume of investment that we have announced in the last years, focused on growth, especially in the transmission and distribution area. Speaking a little bit about the ROIC, it's exceptional performance, 32.9%.
Another year that we are operating over 30%, and that demonstrates that we are able to generate solid returns and maintain the discipline of capital allocation. Here, I think that the main takeaway message is that we are allocating capital in a very efficient way. As we can see, along this historical series, we were able to multiply, threefold, the invested capital, and thanks to investment generating good return, WEG has been able to generate a very healthy ROIC, and we're investing in very good projects that generate good returns. Now, let's move on to net income analysis. WEG is increasing the net income independent, regardless of these economic cycles. What is the message here? There are moments in which the company generates growth in revenue, grows in results, and certain times, it has lower results.
We can see this dotted line here with a variation of the net income, but still, with these variations of growth in revenues and results, WEG has been able to increase its net income. Here, when we analyze the increase of the earnings per share, I think that the company will still work on generating better earnings per share for the investors. If you have increased net income and we generate cash, that will become dividends that will translate into dividends. The company has distributed about 50% of its net income in dividends to investors. We see here a fivefold increase in that, attests to the focus of the company on the improvement of the yield for investors in the future.
And to wrap up my presentation, I'd like to focus on three points that we are going to still work on to deliver: margins and wealthy returns above market average, and that thanks to our differentiation, our competitive edge, such as the verticalization scale, our industrial strategy, our productive gains, and all our cost production programs. Regardless of economic cycles, we are focused on generating constant growth on our income and dividends to our shareholders, and the company is still going to generate cash in order to support the growth process in a continuous and healthy way, and also in the volume of investment that we have announced, which is going to be detailed further on in other presentations. Thank you very much. Let's move on now to our next presentation.
Thank you very much, André. Next presentation will be given by Kuba, our CEO, but before he takes the floor, we have another video to share.
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Good morning. How are you doing today? It's really a great pleasure to have you all here today. I'm really moved to be able to open my presentation by telling you that 20 years later, after the speech by Mr. Eggon, the dream he talked about and this legacy he left to the whole team who is still leading the company, we finally reached this position. We are now the largest industrial motor manufacturer in the world.
I believe that everything WEG has been building is exactly based on this legacy that was left by the founders, dream big with feet on the ground, taking one step at a time. I'd like to thank all the board of directors, this team. It's been basically two years since I was announced. By the way, it was on a WEG Day yesterday when I was announced as the next CEO. Since my very first day as a CEO, the team who used to work with Harry is working with me now. So the way that WEG leads things, having the second CEO of WEG as the president of the board and having Harry with me in the board, in our board meetings, it's something really unique, and it's a privilege to do that.
I have been working for the company for 24 years, and while I was part of this whole journey when I joined the company, our revenue was not BRL 1 billion. Now, very proudly, we've reached BRL 38 billion revenue last year, and I'm really happy that after many years leading the motors operation, I could see WEG Motors in 2024 reaching this position, number one in the world. This is something really unheard of. 64, 63 years ago, WEG went to Europe to look for technology, and last year, WEG became the first manufacturer in the world, not only in terms of market share, but with a lot of technology and manufacturing capacity. I think this is an example of how hard work, feet on the ground, but dreaming very big, how this can really take us to very high places.
I'd like to start by showing you our strategy to build the rationale we have today, a product company that is increasingly turning into an industrial solutions company. This slide shows how we work. I really love cars, and as we say, accelerating a car on a straight road, you don't have much risk there, but if you do that in a curve, you are taking risks. Regardless of the car you're driving, accelerating a motor business, which is something we understand a lot, it takes less risk than accelerating in new businesses where we see opportunities, but where we don't have command of the technology yet. So back in 2020, when we had 7.2% market share, we started to constantly announce new CapEx investments, BRL 66 million in a manufacturing unit in Jaraguá do Sul , because we needed to speed up in order to capture opportunities in the pandemic.
We couldn't have BRL 600 million CapEx and capture opportunities that fast if we didn't do that here in Jaraguá do Sul, considering all the structure we had here, and we invested in a manufacturing unit in India, another one in Portugal, a site in Turkey, expansion in China, invested in expansion in Mexico, and this is the result. With the acquisition of Marathon, Rotor, and Volt, we invested almost BRL 5 billion in five years. We more than doubled our market share, and you, with all this CapEx, you didn't see a drop in your earnings, quite the opposite actually. These investments were made with a very high return on investments, and we can see these consolidated figures. While we built in WEG Motors, we have manufacturing units all over the world.
We have over 20 manufacturing units updated with up-to-date products, products that are very efficient, competitive, so we are really ready to be the leaders and to go on advancing in our market share. I'm really happy. I'd like to congratulate WEG Motors team. It's been an honor to lead you for a very long time, but now we are in a new journey, so the same journey we had for motors, traditional products, we started in 2023 doing something similar for transformers, and late last year, we announced a new journey for WEG Energy. If you recall, last year, we announced a CapEx of $62 million that would be invested in the China plant, so we have full capacity there.
We grew a lot in China with low voltage motors, and in the past four, five years, with the passage of Eduardo de Nóbrega, who was the managing director in China together with Koshinski, Edson Koshinski, who today is director of industrial motors and energy, they transformed the energy business in China, and WEG grew a lot there. So we needed a new site. This is the view of our Rugao site here in the back. A medium voltage motor manufacturing unit is being built. Our low voltage motor manufacturing unit is a state-of-the-art site, and now we are building the best manufacturing site in terms of process automation so that we can be competitive in China against the many Chinese competitors we have. So here we can see that we have solar panels.
We have a sustainability journey today, which I'm going to be talking about later, so this will start operations in 2026, and we took another very important step, which is the announcement we made this week with the state government to have BRL 1.1 billion CapEx invested here in the area of Jaraguá do Sul . Part of it will be in the manufacturing site we will be visiting later today, synchronous condensers, and part of it will be invested in another area here, but it has to be here, close to this area. And why? Just as we did for industrial motors, we have to do it here in Jaraguá do Sul because here we have the technical staff to support us, and here we are talking about very big machines that will change everything here. So we are positioning ourselves in traditional products to have a whole portfolio of products.
WEG goes up to 100, 130,000 kW. Now, with these investments, we will reach 300,000 kW, 300,000 kW. So when we look at that, our vision is the following. Just for you to see the magnitude of our growth, I was having lunch with João Paulo this week, and he says something. In 1995, he used to work in the U.S., and he sold the biggest machine, a 3,000 machine. Today, we make machines of 100,000, meaning 30 years later, from 3,000- 100,000. In two or three years, we will be making machines of 300,000. This is the sheer size of our portfolio, and obviously, this investment, behind this investment, is a very clear vision. So WEG will continue growing and prepare to become leaders also in high voltage electric motors.
We had this journey with low voltage motors, so we need more capacity for high voltage motors. Fortunately, we were very successful when the turbo generators started to go down. We started selling more high voltage motors, and then we were able to keep the plant working full speed. Today, we no longer have capacity to go on growing with the facilities we have today for WEG Energy. A big step is the manufacturing site in China, which I mentioned. Another strategic step is the manufacturing unit here in our area, where we will be making machines or equipment that are very big, and we will start working with turbo generators with two poles that are extremely important so that we can really provide full solutions for the pulp and paper industry. Just a quick update on T&D, as I mentioned.
T&D, back in 2023, WEG started accelerating CapEx. And why? Well, we have few opportunities in this business, actually, to invest in manufacturing sites. When you have such a factory with the plot and the construction, it's a very high CapEx, longer returns. Now, when you have opportunities to have this level of investment with a factory that is fully sold, that's outstanding, so we cannot miss that opportunity. Carlos and his team have been accelerating that, and we see here, Mexico, Colombia, Betim, it's all being expanded right now. Mexico, we are accelerating everything we can. The factory started being built right now, so the facilities will be finished by last year, and it will start up or ramp up. It will be 2027, the Colombia, the factory.
2026, Betim factory, we will complete the first stage in the first half next year, so we still have a good opportunity to capture around half a year of revenue there. Expansion in Gravataí, late 2026, expansion in Itajubá. It's going very well too there. We are going to be able to capture revenue in the second half of 2025 so that we can be competitive. So this wire factory in Mexico and more recently a new wire factory in Linhares. Okay, we made a very important announcement a few months ago. This announcement shows the vision we have, the vision we see, all the opportunities we see in renewable energy data centers in the USA, transformers up to 10 MVA. Together, if you look at that, considering renewable energy data centers, and the $77 million in investment is to transform this site we have today.
So for many years, we have been telling you this is a factory that was acquired. In the new factories, we had big challenges to hire labor, and in this manufacturing unit here, we have an extremely high level of automation. This site here should be one of the factories with the highest level of automation in T&D, very competitive. We will have a small expansion here, but a lot of new machinery, and we will increase our capacity by 50%. Great returns because most of the CapEx is machinery and equipment to increase capacity, and in 2028, we will start capturing all these investments we have been making. I'd like to close this session by talking about, so now I'd like to talk about our strategy vision for acquisitions.
When we look at Volt, Cemp, Rotor, and Marathon, so industrial motors, WEG already had a good team, good structure in place, but we didn't have access to the market. We acquired major companies. This was the largest acquisition we made. So these are extremely low-risk acquisitions, and they were very assertive. Volt gave us access to Turkey, Middle East, Cemp, Rotor, Marathon market niches. We have, with that, a bigger portfolio, two manufacturing sites in India, and WEG now is very big in India too, and these were very important and strategic acquisitions. And what is now part of our portfolio? We announced them last year, Reivax. Reivax, Carlos Grillo, we'll be talking about Reivax. Reivax is a strategic company. We couldn't have invested large amounts in synchronous condensers as we did. We couldn't have done that if we didn't have Reivax. And this is pretty straightforward.
WEG last year was a product company. We used to sell only the compensators. Now WEG is a systems company, and as such, we also need controls. In order to have controls, we needed a company like Reivax. What if we hadn't acquired Reivax? Well, we could just be a client, or if Reivax was acquired by one of our competitors, we might have issues providing the whole system. So Reivax brought us technology which WEG didn't have. Reivax, they sell to many manufacturers that are WEG competitors, but they helped us access markets we didn't have in the past. So many synchronous compensators that exist in the world, in Latin America, use Reivax systems. Carlos Grillo, we'll be talking about that later. I would also like to highlight something related to Heresite, which is a new position, a new movement in the industry of special paints.
Heresite is a very strategic company. It's over nine years old. It's a very technical team. They have a very highly skilled technical staff, protective paints for oil and gas and other industries, and through this company, that is part of the vendor list of many companies in the world, American companies, but 70% of revenue is outside the USA, so WEG will be able to be part of this portfolio for paints, and we'll be able to enter segments or industries we never managed to do, particularly abroad. Talking a little bit about integration, integration of Marathon was really great. When we proposed to acquire it with the board, one of the concerns was how would we be able to take in all these manufacturing units, but I would say that integration is within schedule. We've integrated supply chains.
We had many improvements in our commercial structures, and administrative and IT teams did a great job. We had WBS in most of our operations, and we have already captured, with all these actions, around $5.5-$6 million a year of savings in expenses we used to have here. That was a great step indeed. I'd like to congratulate the whole team. Now we have those things that take a little longer. Vertical integration takes long. These companies we acquired were operating in the final stages of assembly. When you do vertical integration, we have to invest in many processes they didn't have. It takes longer. Growth portfolio integration. We are already working on that, particularly to integrate components. We're working on that. It takes time, but many things have already been addressed.
Obviously, we will capture much more value when we integrate SAP. We started the blueprint process. It will take still one or two years or so that we start implementing it. So we are talking about late 2027 to have most operations with SAP. Now, I'd like to talk a little bit about the international scenario. You all know about the volatilities we had because of the issue of tariffs and geopolitical conflicts. Today, we had a note that the Brazilian government is talking with the American government backstage for a meeting maybe with Lula da Silva and Trump, and this means instability. So we have been working in order to try to mitigate those risks. But you know that the greatest challenge faced by every company is that if the world stops growing. Right now, the world hasn't stopped growing.
We still see growth in most countries, but we start seeing some projects being postponed. People are waiting to see what is going to happen, and revenue from projects that were part of portfolios. People think, "Well, next week, tariffs will go down." So in the end, a few things were not done because of all this uncertainty we have in the world right now. But what have we been making in order to mitigate that? It is very important to see that our global footprint has always been a footprint aimed at mitigating risk. It hasn't been a footprint designed to have the lowest cost because if that were the case, we would have a manufacturing unit here and one abroad. Our operations are always local to sell locally, and we have a very strategic process of reallocating production between Brazil and Mexico.
That is, everything that is made by Mexico that is exported not to the USA, we are bringing to Brazil, and everything that Brazil exports to the USA, we are trying to take this capacity that we have in Mexico and have it there. Nothing has changed in terms of expanding capacity in Mexico, but what is happening is that we are speeding up training in Mexico because of this uncertainty we have considering tariffs, and Brazil is preparing to export to other countries, so we tend to go on growing, and another very important point is this. We have been accelerating our investments in Mexico. In Mexico, investments that would take place in 2026, 2027 in motors, we are doing it earlier. For example, automation, we are rethinking automation in order to take this tariff scenario into account, but how is WEG being structured?
We are talking about mature products, and now I will start talking about the solutions strategy and structure strategy. We want to be a company that has placed energy transition at the very center of its strategy. Energy transition is at the very center of the strategy of all products and services we have in energy efficiency, operational efficiency, renewable energy, and also electric mobility. Today, we are increasingly becoming a company that is no longer just making products where we used to sell brown box, and we are walking towards solutions. You cannot possibly sell a product like this one without having software, without having an application layer. You cannot sell a recharge system if you don't have a team that will be following everything that has been installed in the field. So we will see a whole transformation today from products to solutions.
We will be talking about our strategy, the strategy we are designing, considering all the opportunities brought about by energy transition. Grillo will talk about electric mobility. We'll give you an update. We talked about that two years ago. In two years, what was the progress we made? Last year, I talked about BESS. Do you recall that? I touched on BESS. We're going to show you how BESS fits solar energy. What about microgrids in Brazil? This is a very important topic in Brazil. Considering the whole scenario, we see curtailment, blackouts in Spain, in Portugal, a blackout in Chile. We will show you today all the new solutions WEG has in order to provide grid reliability. This is a different day. We're not going to be talking about products.
We are going to be talking more about solutions and system strategies. And we will be very happy to be able to share that with you. So now I would like to invite Carlos Grillo, our Managing Director, Digital and Systems, to give you an update on electric mobility.
Thank you, Kuba. Good morning, everyone. As Kuba has mentioned, two years ago, I was here and I presented something with the same title. And now the intention here is to align on which has changed, but several things remain the same as we have shown you back in 2023. Electric mobility, as we see it, there are two great focuses. It's mobile with vehicles, and we call it power trans inverters, battery packs, generators. And basically, we work on buses, trucks, vehicles for agribusiness, vehicles for mining, and vocational vehicles. And I'm going to delve into that later on.
We also see mobility as an infrastructure, depending on the infrastructure. There are five channels that we have identified: B2C, manufacturers that we have always been very close to working with them, the operators of charging points, the CPO, which is a great business to be tapped as well, fleet operators, and condominiums and buildings. Well, very briefly talking about mobility. Within mobility, we have made some announcements back in 2023, and I would like to delve a little bit on batteries now, battery packs. Batteries are increasingly becoming important for electric mobility. Something that has positively impressed is the life of batteries, and they are lasting longer than expected. Basically, because they have electronic components, the BMS, the battery management system, BMS, a system that we worked, all the electronic parts and also the software layer.
Another important thing are the assays, the laboratory tests, certifications, and so on. For instance, this assay, this is a very emblematic test that we submit our batteries, is the fifth test in a resolution rule, which is the fire resistance of the batteries. This is a bus battery. And suppose that this bus comes to crash into a diesel bus, and the diesel will combust. And how does our battery behave? These are normalized, regulated issues that have to be addressed. And WEG is ahead of the attempt of keeping its products up to date with the legislation. And this is a test that we conduct here at WEG for the certification. Buses in Brazil are still a great business to be tapped. In Brazil, there are about, this is some figures from September, 1,200 buses. And we are very proud that they have powertrains and systems by WEG.
Buses are no longer as concentrated in São Paulo alone. Doubtless, São Paulo is the greatest locomotive of this business, but things are spreading out. We have now in Porto Alegre, Vitória, Belém, and several other places. All these markets are accelerating in the same way that São Paulo did at the beginning. Following these directions, we are still focused on these three levels of applications, light applications having to do with the power. But that's a very technical issue. We don't need to delve into this. We have the light vehicles, the medium vehicles, and the heavy-duty vehicles such as trucks, vocational vehicles, and buses. Outside of Brazil, we have also made some strides. What we have noticed is, especially the vocational vehicles, we must have seen in the airports and ports, they are going through an electrification process.
These are vehicles that they don't have any license. That is because they have a vocational use, and they open up new opportunities for us. So we are tapping this market increasingly. Speaking about charging infrastructure, we are proud to have the most complete line for charging stations. They start from the small stations, which we supply to manufacturers that can be packed in the trunk of a car. And naturally, they are also sold to the B2C, the charging station for residential use, semi-residential condominiums, and so on, and direct current charging stations, different than those smaller ones that work on alternating current. And then we have the WEMOB, 600 kW, which is the biggest charging station produced in Brazil. All this line of charging, especially the C line that has started beforehand, they are certified by the INMETRO, the Brazilian certifying agency.
So yesterday, in the reception, we are spoken a lot with several of you in your condominiums, how you could place and install this. So there are a few difficulties that Brazil is facing as well, other places. But one of the first things that I would say, if the manager of the condominium is worried, they should then, as a first measure, use a certified charging station because there are regulations to be met. And so the 600 kW charging station is not the ceiling. We're working to reaching one mega very soon. This is something that we don't need right away, but the infrastructure is modernizing itself. But soon enough, by the beginning of next year, we should have a one mega charging station to offer.
And a second point that I've shown you that makes us also very proud is that we have approached several manufacturers that naturally started in Brazil, and these manufacturers, the automakers, are taking us now to Latin America, and most of them have their LATAM headquarters based in Brazil, and for heavy vehicles, likewise, they are very well represented in Brazil, and we are very in close relations with all of them, and for the heavy ones, not only in charging issues, but also for the powertrains and battery packs. When we see charging issues, we can simplify this into seven places, and that changes the game a little bit, the channel for sales and so on, even the service that we supply, and the light vehicles, obviously, we would like to charge our vehicles at home or condominiums and also at the destination, supermarkets, shopping malls, and so on.
On the other side, we have the fleets, the bus fleets, and we have several references for that and a lot of experience on it, the distribution centers, because the fleet, electric fleet, they are increasing in number, and also terminal and stopping points, charging and recharging, so the terminals will demand also a charging station to charge the vehicles, but that also goes through the roads, and here is where we started the first movement, and WEG has had some. Two years ago, I have shown you a few of the initial movements we had in this area, and others came along, and so there is an interest on automakers and fuel suppliers because they already have a network in place to create this infrastructure along the roads.
And I'm here talking about higher power stations, not only talking about software, but we need transformer panels and shielded bus systems and so on, and also BESS to help deliver this energy in these charging stations. Here is another very interesting example that I have to give you, and that has to do a little bit with the talk that we had last night because the manager of our condominium is afraid of putting a charging station in my condominium. What is happening? Let's take this example of the Allos Group. It's a giant group of managing shopping malls, and this group has created, in a very professional way, a brand for their charging station. They created this brand called KARG. And we are proud to have played a part in this because we've made something which was very impactful for people that use this power station.
They have shopping malls all over Brazil, and they have created a great charging station with several vacancies. If you have your manager of your condominium not allowing to use this at your condominium, you can use these shopping malls. You can go to the gym and the shopping mall, and for two hours, you're able to fully charge your vehicle. The shopping integrates with your card, with your shopping expenses. We were able to contribute with all this integration in terms of software. That is part of our software, of our system of solutions. There are several brands here that, again, we are proud to be working with. Following this direction, WEG has increasingly betted on a complete and vertical integration solution.
So we come from the project, as I have mentioned before, the road we went to the field, see where there are transformers, where there is energy, where is a possible location for we do all we promote the full turnkey solution. So there's another very interesting solution that we have made, and we made a joke in our Instagram, which is the box team. So we have a relevant team that we call the WEMOB, which has charging stations, the WEMOB Advanced Service, which are the team do the conditioning and monitoring of these charging stations. They identify failures, they forecast possible failures, and with a lot of automation and digitalization allows us to give the support to clients. And today, if you look into the literature, one of the things that make people very unhappy in the charging vehicles is the unavailability of this equipment.
They are placed in places without any support, and should someone just break the cable or something like that, it will remain out of operation. So with this kind of service, we are able to make the equipment and charging station work longer. And here I'd like to show you a launch that we are promoting right now. Let me tell you what it is about. It is a charging that is set within the V2 home or the V2X vehicle to the grid, vehicle to home, or vehicle to everything, vehicle connected to everything. So that's the V2X. The WEMOB station V2X was launched at Intersolar Fair. And what this product does is this very interesting thing. It is a grid managing system at your home.
We've dared to call this a home grid, or perhaps not a microgrid that NATO is going to speak about, but under micro is nano. So nanogrid is a good name. We're still studying, working on this. But what does it do? It's the central controlling station of a grid. We can use these blue arrows are direct current. It can get your solar energy, convert into alternating current, and it may get this energy that came from solar power and store at a little BESS. And both directions is by it can work in either way. And in alternating current, you can deliver it to all the grid on your home, your camera, WEG Home systems, your swimming pool motors, which can be WEG as well, to all the charging needs that you have. And it also receives the energy from the utility grid, which you buy.
It is a V4 for vehicle. It is an equipment that was developed to connect everything to your vehicle. And also in that blue arrow, continuous and bidirectional current. So it charges your vehicle, but it can also discharge your vehicle in case you should manage your energy within this nanogrid of yours. And there's a controller. Obviously, a grid is a complex system. And therefore, it needs a control, a management. And as it's an equipment that follows our strategy of WEG Home, you can speak through Alexa and other Internet of Things. So it has this control. Following up our internationalization strategy, we're speaking in recharging infrastructure. In Brazil, we are absolute leaders in this segment. We are very proud of this. We have worked hard for that.
We've had a very wide portfolio in every channel that we consider important, and we work very hard on each of them. In Latin America, this leadership has been built supported by the very good work that we have had in Brazil. And obviously, it's natural that it will expand throughout Latin America. And we have made a very strategic decision that we have placed the most important executive of this business. We have sent to Europe a few months ago, and we have started an operation of an EV charge operation in Europe. So from next year onwards, we should have products in Europe, manufactured in Europe, following the standard of our WEMOB systems, but adhering to the European strict legislation. This is a strategy of market, but also a technology by understanding what is going on.
Obviously, in Europe, there isn't the problem of a condominium manager because it's a more major market. But there are very important and strict regulations. They may be even worried about a very little bee that would enter the system. So there are several rules that you have to comply with that we have to incorporate into the software and also a little bit into the hardware. So we're going to have an engineering team in Europe to understand better the market and better navigate that market with better offers. And another solution that I have created, so it contemplates power, trains, EV chargers. And we created this in São Bernardo, where we have a very important team. We created the WEG eMobility Center. And that is a service center for electric mobility in Brazil.
Focuses, services, and repair part of our box team that I've shown you beforehand is going to be here as well. Our idea is to work on powertrains and recharging simultaneously. Why São Bernardo? Because that is in the auto making industry center that basically all the manufacturers are based there and also serves as a support for our main clients that are historically there. This area that we intend to make available of 1,200 square meters, we started operating last month. There we have the teams working the São Bernardo plant. We have a 24/7 operator service. That is very good for bus fleets, especially if they need to charge between 12:00 A.M. and 6:00 A.M. If a charging cable breaks the contact, we need to replace that in very few hours. That is very important.
It's important to have this operation located in such a place. But this operation also has a mid-term vision that is the following. Remember the battery packs that I mentioned? They are increasingly lasting longer, but they also are evolving a lot. So the idea of this center, you can see this little bus in the picture. The idea is to replace battery packs to increase capacities and to be able to collect these battery packs and to make a circular economy to work. And finally, my last slide here, we have the microgrid, which I'm going to speak a little bit more later, but I would like to speak about the nanogrid. In every grid, we should look at the energy standpoint and the standpoint of intelligence. So this is the project, the blueprint of the nanogrid.
And at the center of this blueprint is the V2X, which receives solar energy that stores in the BESS that is consumed in the appliances and has a communication to all equipment in the network. And the management is carried out by the very person at home. But this is a spoiler that I'm going to give you now. So our final messages, vocational vehicles increasingly are becoming interested in electrification of their fleets. Another issue is the infrastructure of charging stations creates a new concept of nanogrid. And last but not least, WEG expands their business in South America, Europe. As I have mentioned, that will send a team of engineering and manufacturing for EV charging and also in North America, especially with vocational vehicles.
Okay. Thank you. Now, Salgueiro, back to you. Now is Neto.
Just a few comments here.
Considering the comment that was made yesterday, in the interactions I had with you, okay, I think we should think about the following. You got WEG's strategy where we have trucks and buses and also vocational vehicles, something we didn't have two years ago. But I was asked about buses. What is different? You know, the buses in Brazil are used for around 10 years in São Paulo and then retrofitting and 10 years in the countryside and then 10 years working in a circus. What about the batteries and the second cycle of use of buses? This is a concern for those who own buses, and this is a concern of those who will buy these buses. This is what's happening to electric vehicles.
Many people buy a second-hand electric vehicle, very low price because they are afraid of what is going to happen to the battery of these used electric vehicles. The center of the strategy of WEG today is to develop this mobility center with the know-how we have from our battery team. Our battery lab is constantly assessing cells. We have a team that is developing BMS, which is a battery management system. We will really be able to make this mandatory with the fleet and where these buses leave São Paulo from the capital cities going to smaller cities. We can have a retrofitting in line with the team, updating some battery modules so that they have additional 10 years of service life. This is something different.
This is something which I think WEG will become the optimal partner for those who will be in this journey because those who manufacture a full bus and who are concerned with the equipment only, they don't worry a lot about the fact that these buses will be used for decades. The mobility center, the first one is in São Bernardo for obvious reasons because our service center is there. The idea is to spread this to all our network for technical support services. Many people ask me many questions like this. Now I'd like to call Harry Neto because another very important aspect we have been discussing, which is at the center of the discussion of WEG's strategy, are solutions for microgrids. Neto, the floor is yours.
Good morning. I'm the business director for Solar, BESS and Building.
Now I'm going to be talking about the integration of these three areas, microgrid and nanogrid. I'll focus on these solutions connected to these three business areas. First off, I'd like to say that in solar energy, WEG, in addition to being a PV distributor with a whole range of equipment, also became the biggest EPC contractors in solar energy. We have mid-sized construction in trenches, for instance, 10 works of five megas for some companies, four constructions of five megas, and also big construction, 200 mega, which is what we are delivering right now. We became a big EPC contractor for solar energy EPC. I think you know what it stands for. EPC stands for Engineering, Procurement, and Construction. Engineering of the project, the part related to equipment procurement and the management of that, and construction itself.
We provide a full EPC lump sum solution. Full EPC lump sum means that I do not do EPC without the materials. I usually compete against some EPC contractors that do not work with Curve A. Investors buy the Curve A equipment. The EPC contractor takes them and does it. We will provide full EPC with all equipment. We are one of the few players that work on Curve A and Curve B. Curve A, which are usually the most expensive equipment. Curve B is medium voltage. C curve with CCTV. We have cameras embedded and services with partners. The project management, bankability, responsibility of delivering, responsibility for efficiency, everything is with us. We have delivered 1.2 GW over 250 projects working as full EPC contractors. In these B, A, and C curves, WEG is doing very well with our portfolio.
Solar and BESS and electric panels, transformers, everything in-house, control monitoring systems, SCADA and commissioning, and managing projects together with our partners. Now going into the topic of my presentation itself, microgrids. What does that mean, microgrids? This is a system made up of more than one power generation and/or transmission. We have different sources, as Grillo mentioned before, managed by a smart control system. All these sources, when you have in one system more than one source, you really need intelligence to control and dispatch these sources. I'll mention many cases where we have already delivered microgrids for agribusiness and commerce and industry. Together also with electric mobility, which is not only sources of generation, also transmission, dispatching is part of that, and also solar energy integrating this whole process.
So, our first case in this scenario of microgrid, and this was broken down into two phases, but this is a recurring project in our portfolio. We have already become a consolidated provider of microgrid solutions. So, what do we have here? This is agribusiness. So, they have grid instability. They are at the end of a transmission line. We have many agribusinesses where the guy in the farm is expanding. There is no grid there, but they have land. They have production. So, they may buy or lease a diesel generator. So, we see that a lot in high yield, high productivity farms working with many generators. They may have 20, 40 diesel generators. And how did we start providing this type of service? So, we have a farm that is at the end of the line. They cannot increase their contracted demand because the grid is not there.
They have grid instability, high consumption of diesel because when they are far from the grid, they're usually in more remote places. Taking diesel to a very long distance, it's more expensive. So these more remote places become more expensive. So they had like 40 generators in this particular farm. We coupled the solar system to the generator sets, and we did this controller, all this sizing so that generators were always at the optimum level. So we had 20% solar energy that didn't get into the way of the generator, of the use of generators. So we did the whole integration, and the savings were much better than a system connected to the grid because diesel was very far. They would have to pay a lot to get diesel. So the return was great. What did we do in the second phase?
The farmer said, "No, I want to have more solar energy. The payback is great." Now, if you have much more power and some solar energy, you may have an issue with the diesel generator. At midday, with the peak of solar energy, maybe they are not using the pivots. Maybe at that time they are using them. But what may happen is that when they have too much solar power, diesel will fall down. So we cannot use too much solar power. So then you have solar energy, diesel generator, and BESS. So much less BESS. This is just for power smoothing so that diesel generators operate at the optimal level. So we have more solar energy in. So if you have too much solar energy for diesel generators not to be at the optimal performance, we have added a battery there. So we see these microgrids.
You have a generator set, solar, and BESS. So the three of them will make up a very promising microgrid. And this is the solution we have been offering with two power sources as the integration of these different power sources. This is an example for a farm, agribusiness, which is very strong in Brazil. Now, in the industry, so we have a great penetration in industry. So we have very good sales channels for the industry. So here we have a system that was installed in industry. So this is a mining company. They used to have a contracted demand issue. So there was no power to expand. So they would use a diesel generator for crushing equipment since they didn't have an additional grid for their consumption.
We offer them solar energy generation because they had no power from the grid and a BESS system. This is an example of an industry that installed a BESS to expand their power consumption. We see something that is widely used in BESS, which is revenue stacking. If the grid is down at the mining company, BESS will be a backup. In addition to having more power available because they can store from solar energy using it when it's needed, they may also be used as a backup if the grid is down. Here we have another situation. We are providing the services with quick charging. There are some places in the area of São Paulo where they don't have a forecast when they will have a higher contracted demand in some places. If in this case, I think these are eight.
Now, if you have eight quick charging stations in place, and if the buses get there all together, you may have a peak of demand for power, and they are not prepared for that. Maybe preparing the grid for the eight buses, which is not all together, it's not as feasible as having one BESS system in place. So we are in the bus garages. We have been talking to all of them, particularly to those who have limits in terms of expanding their quick charging stations. We may provide full EPC solution for them. They also have photovoltaic. Of course, photovoltaic was not the largest one. It was connected to the grid. And since they have like a peak of power, they can charge these batteries late at night. So this is different from the mining company that they need to generate more power.
Here, solar energy was like a complement and the biggest role here is to supply energy if all buses arrive there at the same time, so we have a BESS system there to provide power in this peak demand. Also, commerce. We have been working with revenue stacking a lot, using BESS for more than one thing. In the case of this hotel, we had already provided them a carport and also an EV charge, but they also wanted a backup for the diesel generator. Since this is EV charge and solar, a more sustainable footprint instead of a diesel generator, they wanted to install a BESS system, and it's nice because solutions may have more than one function.
Since they already had a battery, instead of paying $0.60 for the flat power to the utility, they paid instead $0.30 during the day and $1.50 in peak demand time. They use the battery to have these, so they charge by $0.20, use by $1.5. It's great because they could reduce from $0.60-$0.20 during the day and used in peak time the battery. They do that every day, charge out of peak. They also have a microgrid with EV charger and solar energy, so we see a lot of adherence, particularly our solar power integrator, who were used to selling more integrated solutions, and now they are offering this solution that will have more than one function, so this requires a more technical kind of sales, but we stack gains, and our customers are really liking this type of solution.
This is another very interesting niche. We did this project in a social project with Natura, a small project off-grid BESS solution. So this is really far from the grid. This is in the middle of the Amazon. We did the system here, and why was this system really nice for us? Recently, there was an auction, SISOL, in the Amazon. I don't know if you know how it works, how villages work there. They have bids there. People have a generator. They have a long-term contract. There are companies that work with power there in this area of the Amazon, and this auction is being encouraged by the government. They are telling people who own generators, "Include 20% of renewable energy in your generators." There's a bid going on, and some important players in the world have participated.
They are giving their bids to have hybrid power systems in these villages. We are preparing for this movement, taking existing general diesel generators and also installing BESS solutions. In these areas where they have more difficulties regarding transportation, that was a very interesting case for us. In addition to the social side of it, helping people living there, we are getting prepared to face these challenges, which may be more difficult because of the location. In line with what Grillo mentioned earlier, in the middle, we have a WEG integrator. I think this is a model we designed, which I think is pretty interesting. We have today around 300 WEG solar integrators all over Brazil. These customers of ours who work only with WEG that will sell only our brand, and now they are becoming energy integrators, energy transition integrators.
They offer microgrids when we talk about bigger things, as I showed you before. They offer that to the commerce, to the industry: microgrids, all WEG equipment, BESS, photovoltaic system, smart energy control and management, EPC, EV charger. But we also have nanogrids, as Grillo mentioned. We talk about solar for residential, BESS for residential use, EV charger or residential, and WEG Home. This is what is being integrated to the solution. This is a nanogrid in practice. You see the number of products we already have in your home. WEG was more used for the SPD protection or maybe motor inside the washing machine or gates. But now you can really choose the WEG product you want in your home. The WEG Home line has touch switches. This is really cool. It's touch, but it's Wi-Fi working with your cell phone.
You can turn lights on and off using your cell phone, UPS, security, and also home automation. We have the smart home, which is a hub. You have everything in your hand, all WEG components, and also your air conditioning and TV set because they take the remote control frequency, and you can use your cell phone. This is nanogrid for solar generation, EV charger, and also household appliances, everything connected because you have also the energy that has not been consumed, being able to turn off the lights. This is also related to comfort. Getting home, say, "Alexa, turn on the lights, charge my car." This is the trend we are preparing for. That's what I had to present. The key messages are WEG continues as a full EPC supplier.
So we want now to add more products, providing microgrids, strengthening our presence in the residential commercial industry with more products, a more engineered solution, not just solar, and provide nanogrid solutions for the residential market. We are working more strongly to be in your home so that you choose WEG, so that you choose a company that has technology and quality products. Because these products, such as solar and BESS, they are more expensive with more value added, and they really choose a premium company that is here that will really deliver what they promise. This is what I had to present. Thank you very much.
Thank you, Neto. We end up the first session of our presentation, and now let's start our first Q&A session.
I'd like to invite to the stage Alberto Kuba, Carlos Grillo, Harry Neto, Director of Solar, BESS, and Building for this first Q&A session. And I'd like to ask you a favor. Whoever would like to bring a question, make a question, please introduce yourself, stand up, and we'll bring the microphone to yourself so that we can also capture you on our transmission so that the people here on the stage know who is asking so that we can follow this. So I see that there are several hands, and I'm not sure whether we will be able to entertain all the questions. We'll try to address all the questions, but should that not be possible, we're going to have another Q&A session after the second session of presentations. I think that, well, let's try to follow the order. Who raised the hand first? Eugenio. Go ahead.
We cannot hear the question here, but I believe that he is asking something that we are going through a deceleration moment in investment. I am sorry, but we are not able to listen to the questions. It's not working. Hey, Favor.
We have a cycle of investment that was started two years ago. The first WEG day was announced. Last year, we have reinforced the cycle. In this WEG day, we reinforce one more investment in the United States with the modernization of a plant with a $77 million investment. When we talk about that, we have a part that is addressed as Brazil along the next year, 2026. Another part that is very important that will be investments in Mexico to supply North America and investments in Colombia as well that will start capacitating the T&D to deliver new products along 2027.
With the investment that was announced by Kuba, we will, with this new plant, more focus for special transformers in the United States that will address BESS and data centers around 20 MVA. When we talk about investments, WEG Energy that was announced this week, that's an investment that is going to be ready in place for in two years' time. We are, and whenever possible, we're having an investment, increase in investment in all capacities. One example that is working in the United States, where it's the alternators that was acquired from Marathon. Last year, we announced a new capacity will be ready in the beginning of next year. Is that right? By the end of this year.
So the main message here is there are certain moments when we're working with T&D, when we have a full capacity, when you have the capacity taken, so all other businesses find solutions and opportunities to keep on growing. And in certain moments, you add a capacity that's more important that you reinforce that. And in other moments, you make little increases in the capacity so you can take this growth further. Another thing, the paints factory in Mexico. When a part of the investments, at least what we have announced in the last few WEG days, when they start generating revenues in the second semester in 2026 and another part from 2027 onwards.
Yes, it's working now. Good morning, Alberto Valerio from UBS. I would like to go on the other end of the question on talking about margins and revenue.
I think that is the most concern of investors. And if you could just let us know what we can expect in terms of margins in this transition from Brazil to Mexico to the United States, how much we should have that normalized, how should that impact on tariffs, how should that impact on CapEx with the change of machinery and so on? That is my question.
Valerio, thank you for the question. When we started the year and we had the first interactions with you, we said that the expectations of WEG were to deliver, to give margins very close to the interval that I showed to 23% and 22.4% in the last year.
And I think that we're going to remain in this line, but we could have a different composition in the margin in the first half of the year and in the second half. We already had in our order book when I showed you the evolution of margin that could bring margins a little lower than we were performing the last years. And that happened. And the expectation was for the second half of the year to have an improvement in order to reach this value that I have mentioned. We have delivered the first half, 21.9%, which is in the range, in the lower range of this. And everything is following this expectation to reach that. But something new came up, which is the tariff issue from the United States. And that is something that we had not forecasted.
Our industrial presence, as Kuba has mentioned, helps in this process, but we didn't have temporary impacts until we are able to implement all actions. And these temporary impacts will take place mainly in the fourth quarter of the year. And I think that we are speeding up with this. We are doing it as fast as we can, trying to implement as fast as we can in order to minimize this. And we have to follow up on these implementations. And on our side, we are expecting you to deliver the expectations that we have announced.
Just let me add something here.
What it's worth looking at is when you look at WEG along the years and André has shown the margins delivered by WEG. There is a very clear indication that before 2010, the margins to be higher. From 2010 to 2019, margins were a little lower at around 15%-17%, and more recently at higher ranges. But from 2010 to 2020, there was an acceleration of new products, new businesses in the pipeline. See, the great quantity of new businesses that we have presented. And every time you do that, you develop a scale. You don't bring great margins when you have major business in place. So that is why our strategy is always a strategy that is focused on the present with a major business as well as in the future business. We have to invest in those two fronts.
The major business that we are putting CapEx into are good margin businesses in which we have scale, in which we have a domain of the technology. So we are trying to accelerate this major business, but these are more difficult in order to grow on them because these markets, the volume of opportunities, they grow along with the GDP of the world. So there is no point in investing, for instance, we are investing in medium tension machinery. But the world is not increased, but in the compensator, a synchronous compensator will grow for this. So we have to do this mix. So talking about margin in the short term is what André is saying. And when you talk in the long term, we are trying to keep margins the highest possible. But when new business gain more scale, these margins are going to be adjusted downwards.
But a downward adjusted margin does not imply in lower net income because our income is growing and our revenue is growing and our EBITDA is keeping at the same range.
Good morning. I'm [inaudible] of BTG. I have a curiosity in order to how is going to be this ramp for the higher product. WEG is a world company for lower power motors, leading in Brazil, but the higher motors has a different channel for distribution. And what do you think about the next five years? And I know that a lot of this investment in the United States is focusing on this market so that in about 5-10 years, but it's another specification, it's another client, it's another kind of application possibly for different industries.
I would like to know what is the way that you're trying to go down in order to replicate your performance in the lower motors.
Well, you are 100% right on spot because of selling different machinery mid-power. WEG made HVS high voltage sales movement, and this team is a team that started a pilot project in the past, and we started concentrated sales team that will sell concentrated associated higher to mid-voltage products. And this has consolidated now, and we understand that the team that sells medium voltage sell projects. And we have now in a very structured way a very strong team in place that sells brown box products, which are motors, gearboxes, or motion drive solutions, and for that, we have over 40 commercial units spread all around the world.
We have centers that we call HVS, in which we have in Europe. We have, we're establishing a center in China, in India, and now in North America. These are dedicated teams to coordinate sales of medium voltage products. Why is that important? Because when we talk about medium voltage products, several times the location in which the project is to be based is different from the engineering company that is offering the thing. It's also different in the product where the manufacturing are located, the ones that are going to buy the products. I think we're very successful with that. WEG is growing in a very accelerated way in low voltage motors. As I mentioned, we have an HVS team in China that had made an outstanding job.
And from 2020 onwards, we had our, well, Fumo, our head of motors now, was the head of WEG Energy and coordinated with João Paulo's team, a restructuring of the portfolio. So now WEG Energy has one of the most complete and optimized portfolios of the segment. And what has been made for motors was also made for medium and high voltage motors. And that has brought a lot of competitiveness. We grew healthy. We grew in a very good way outside of Brazil, in China as well. And in my opinion, the last thing that needed was this investment, the engineering part as well as the sales structure. As I mentioned, it is different. Was already in place. And the sales structure, in my opinion, for the HVS is a key moment that allowed us to grow in drives.
We have a very successful history in the sale of drives. Then correct me if I am wrong, but the participation for high is very similar to medium. It grew very rapidly because who buys medium motors and drives, they want to buy the set. And WEG is one of the only companies that is able to offer this set. And HVS is offering medium drives for medium voltage, but the whole package that involves lower voltage solutions to complete this plan has several that we were able to deal with in the Middle East.
Good morning, Marcelo Motta with JP Morgan. Is it still related to the BRL 1.2 billion investment that you're going to carry out in Brazil and thinking about a synchronous? I think that the transformer is good capacity to sell when it's short.
When you talk about synchronous in this scenario that is short, do you need to get market share from other is more lead time at the beginning? Can you give us a little more details on the dynamics of this?
In the second part of our presentation, we're going to have João Paulo. Along with him, I would like with him to build this vision because what we have to understand is that this CapEx is geared towards to higher, to bigger machinery, to compensators. That's the first part and turbo generators. We are working with turbo generators at TGM to work his team turbines to couple to these generators. The synchronous condensers, which is with the synchronous motors is a plus that is coming.
But João Paulo is going to delve into this later on and then we are able to build this rationale. João Paulo will be. Let's leave this job for him.
Good morning, everyone. Andre Mazini from Citibank. Thanks for the presentation. My question is on this topic that you have mentioned of the service solution. Looking at the global players, they speak a lot about services and they have a percentage of their revenue. And I'm not sure whether you do this, but I think that you're going into this direction to open up to the service solutions. And what is the percentage of the revenue that you think that you can generate with that? Because I think that is very sticky kind of revenue because it's very hard to lose that.
What is the kind of revenue that you're expecting with that and what kind of contracts and solution/services in the longer term that is more predictable and less likely to suffer this volatility of the markets?
Well, I can't answer to these questions after we make the presentation because we're going to speak about services when you talk about reliability of the system. And I think that is going to be better aligned when we have the presentation made. And we are going to have the presentation by Paulo Sinoti, which is our Services Director, showing a repositioning, a strategic repositioning. And he will delve on that and he will talk about it. So I will complement in the second Q&A. Okay?
Well, can I make another question then?
Yes, go ahead.
Another one is about synergy and productivity gains after a year and three months after we have integrated with Marathon. So there was a slide about that. And I remember that last year there was an even more detailed slide on it. So my question is, how far have you gone into the verticalization and how much is still to be done? But I remember that last year you still had the stamping foundry and several things were not in place. And I don't think that are still in place. So what is the current status both in Jaraguá and in Mexico, which is the second most verticalized place?
Well, the good thing is that when there is a Marathon plant, there is also a WEG plant nearby. So we are already making, and João Paulo, this is what João Paulo is developing with the team.
The zero priority of WEG is to increase the capacity of alternators. Fumo's team, WEG Motors team is working so that WEG Mexico is able to increase the component capacity so that we can increase our capacity for our Marathon's capacity to provide alternators. So the alternators market is flying, is as hot as the transformer market. So this is additional. We are putting in place capacity, higher capacity to meet this demand. And when are we going to transform Marathon into a vertical using WEG's components? Well, that is taking, that's going to take a little longer because we have to integrate portfolio. So that may take another two to three years. And why is that? Because that is not a zero priority. Our zero priority right now is to accelerate the capacity of Marathon's in alternators business. So that is zero priority.
Everything that was possible to be made without having to require too much CapEx, all the purchase, sales synergy, and mainly the IT and administrative services was carried out successfully. And now we are prioritizing so that we can with the CapEx to have the highest return. And this CapEx is all geared towards alternators. And we are having a tremendous success in China. Alternators is doing very well in Asia with our Marathon, the thing, and is doing very well in the United States as well, but really very well. And our challenge now is to increase our capacity in order to meet what we are forecasting with the contracts with clients. So this is the issue here. Vertical integration with Marathon is going to take another two to three years. And why is that? Because first we need to solve this capacity in alternators issue.
That is the main focus. And all new lines of Motion, well, those are the ones that we are updating. Engineering is working on the update so that it can gain efficiency, more streamlined products. And all those products that are to be launched in the next two to three years are going to have all shared components. And from there, we can see gains in scale because we see many different automakers sharing powertrains and chassis and so on. So that is what we're going to do with Motion. We may have different products, but they will share sheets or other components that can be supplied by other component manufacturers. And when we invest in foundry, in wire drawing plants, our foundry all is being carried out as expected and forecasted.
This wire plant forecasted for Mexico and the United States and the US market and to supply WEG motors in Mexico and in the United States, which is Marathon in this case.
Good morning. Thank you, Lucas Laghi from XP. I think this is a subject you will be touching on later today. Along this line of revenue growth, I think that WEG is one of the few companies we see that the market pays in advance for a marginal return above capital when you announce new investments. I think this is very much related to the company's rationale to follow a verticalization strategy focused on return and so on and so forth. Thinking about the marginal growth going forward, not only focusing on revenue growth, but how do you see a marginal return for these new investments compared to what we see in our past history?
Thinking about synchronous condenser, electric mobility, BESS, if we look at this marginal return looking forward, how does that compare to past investments? And how can we think going forward, maybe considering the economic value added that you would generate with this marginal investment vis-à-vis this past investment? So more focusing on marginal return and not only revenue with these new business lines you are accelerating right now.
Thank you for your question, Lucas. I think we have to say a few things here. I think that WEG's success of always being able to generate attractive returns above the market is related to our ability to make modular investments when that's possible. We increase capacity according to market demand. This really helps us keep this level.
But at times, we have to take one step ahead, like building a new plant like this one that has been announced for WEG Energy. It's not about increasing capacity. It's something totally new, as Kuba mentioned, will lead to the capacity of producing synchronous condensers from 100 to 300. And these involve sizes. These are 600-ton machines, and they have to have the facilities to manufacture them. And such level investments, of course, will lead to some settlement in our ROIC because first you have to have the infrastructure in place so that then, well, we start with the plant and then you fill the plant. Something I always tell you, operating at a level above 30-32, which is what we have, that's great. That's outstanding. But then we have to settle down so that we can allow the company to grow.
So I think we modulate some components, which is growth. The company needs to grow. We have to have differentiated growth. We have to have a different outstanding margin and return on invested capital. It has to be, it has to stand out. But sometimes it's hard to have everything at the very high level. But the message is, even if we settle down, our mission here is to deliver returns or earnings above the market average. Investment in T&D today helps a lot. These are new plants, but this is a business that is operating today with never-before-seen margins because we have, everybody wants transformers, and people will still want transformers for the next years. Can we have a transformation? Yes, that's possible. But we still will be working so that if the settling down, if it happens, it will be at a different level. Yes, please.
Regarding microgrids inside and outside Brazil, we are starting our journey towards expansion for solar outside Brazil. BESS, we already had an operation in the USA from the BESS EPC. Microgrid outside Brazil, no doubt, that's a movement we are preparing to. But of course, we have to first have the learning curve in-house. But for example, in the USA, which you've asked about, I've just returned from the USA, and microgrids may be different depending on the place in the world. For example, in the USA, we saw microgrids, gas generators with BESS for data centers. WEG, since we have penetration in alternators and transformers with BESS, we can, of course, this is just beginning.
But in the USA, we could, for example, offer an EPC solution for microgrids with a gas generator, BESS, and solar energy for data centers because their data centers now with AI. These are not 3 mega data centers as we have in the cloud, but 300, 400 mega data centers. They don't even have grids enough for all this power that is required. In the USA, they have data centers close to gas pipelines in Texas, having independent microgrids with gas generators, BESS, and solar. Solar, not so much now. They have actually more gas generators together with BESS, and they have 10 mega gas generator and 1 mega BESS. Why? Because gas generator is for regular and BESS. For them, it's a slightly different BESS that we showed here, which is for peak shaving. They have 5 mega. They deliver in 4 hours.
There is the opposite. For example, C equals to 10, meaning that one mega BESS will deliver 10 mega in a very short period of time. For a data center, you have the fixed loads from the gas generator, and you have one mega. If something happens, if everybody is looking for a piece of information in AI, then you have a peak. Then you use BESS for the peak demand. We see many promising things around the world for microgrid, not only solar and BESS, maybe EV charger and BESS, gas generator and BESS. So we are looking at many opportunities outside Brazil as well.
Yes, talking a little bit about margins, I think that the first message I'd like to convey to you is the following.
This evolution, progress of margins in the past few years, part of that was the result of improving margins from our operations abroad, and why do I say that? Because we are always investing in continuous improvements that may ultimately improve margins, but what happens? Let's take the electric motors business, and then I'll mention transformers, and I may mention other examples. The combination, scale plus verticalization, is key to improve margins, so let's look at the three examples of the three main motor manufacturing units in Brazil, in the world: Brazil, Mexico, and China. Brazil, considering that we have the largest motor plant in Brazil and the most verticalized motor plant in the world, it has the best margins over the past few years. What WEG has been doing in all these modular expansion movements, having more and more verticalization steps, with that, we have been improving margins elsewhere.
Outside Brazil, the plant with the highest level of verticalization that will reach virtually the same level of Geraldo Werninghaus will be the Mexico plant. When FOMO ends the investment there in the wire plant, the Mexico plant has today a very competitive margin because over time it expanded, providing more scales. We invested in a foundry. We invested in new equipment there, and this is leading to better margins. In China, it's probable that we will not reach the same verticalization level due to decisions made by us. But in China, what we have been investing is a modernization. The Rugao plant Kuba showed, where energy will also be, is the most modern WEG plant and the one with the highest level of automation. So we really know where we can have verticalization, where we have competitive labor, for example, Mexico, and thus generate good margins.
But we also know where we will not be able to reach this level of verticalization, and there we find other ways to improve margins. The message is nobody. In terms of margins, we will not just be based on the margins for WEG Brazil for electric motors. Different plants, Turkey, people from other sites recently acquired, they have to do this continuous improvement work. I'll mention you an example. I went to visit the Marathon plant in China. The chief executive at that time presented very proudly the margin they had there for motors. And these were decent margins for the Chinese market by Marathon, pretty good margins.
At the end of the presentation, I told him, "I'd like to congratulate you, but WEG's margin in China is double the margin you have here as Marathon." When we are able to reach the level of verticalization, bring our process, the WEG way of working, if we do that, I think we can really improve the margins there. When you talk about transformers now, the margin in the USA, the margin in Mexico, the margin in Brazil, well, the work is done. The job has been done. Okay, but the USA has labor costs that are higher than labor costs in Brazil. Carlos' team knows that they have to improve in all plants. What they are doing right now in the USA, automation, where you have a very attractive return on investment.
I really recall when we bought some other companies, the margins we had, these were break-even margins with other acquisitions, and what we announced to the market was, "We know how to do that. It takes some time." As we talked about with Marathon, we know how to do that. We just need some time to make it happen, and when we reached the level which we had in the business plan to justify our investment, we were really happy, but we continued to work. The market helped us, and today we can operate with margins in the USA very similar to the margins we have in Mexico and in Brazil, and this is what we want to go on replicating, regardless of the geography, regardless of the country, but definitely, scale and verticalization play key roles in this whole process. Just something for reflection.
More important than comparing margins in different countries, of these countries with margins in Brazil, is to make sure that for every region, for every geography we are selling to, we have the plant with the best place to deliver the best margins. I think that's the main point. WEG, considering the very characteristic of our strategy, we will produce locally. If you look at North America, our main plant will be in Mexico for North America. This has been decided many years ago. When you look at Europe, our main manufacturing units there will become China and Turkey hubs. So when we look at Europe as a whole, well, we will be more competitive. Portugal was the first step, and now we took this step in Turkey. When we look at Asia, well, where will it be more competitive to manufacture? In China.
So our benchmark will always be WEG versus local players. What is our margin vis-à-vis local players? And obviously, we also compare to Brazil so that we try to be even more competitive. But our main focus will always be to install our plants at the place where we have labor competitiveness and a good local market so that in the long term, we can have a better performance because we don't see a footprint where WEG Brazil will always be the largest exporter for the whole world. This will not be the case. Local hubs will become increasingly stronger, and these local hubs have to deliver a bigger local average margin compared to other competitors in the same industry as WEG. This is how we see it. We will now close the first Q&A session. We will have a coffee break now for those who are following us online.
We will be back at 11:00 A.M. Brazil time. Thank you all very much.
Nos ventos que geram mudança. Nas tecnologias que acendem novas possibilidades. Nos processos que se reinventam. Na mobilidade que nos transporta para o futuro. Por trás de tudo isso, existe chamado pelo novo. Por novas ideias. Novos caminhos. Novas soluções. Não é a voz de alguém que faz esse pedido. É a voz do mundo. E quando o mundo pede, a WEG faz. Faz por meio do aproveitamento das energias renováveis. E usam a força do ar, da água, do sol e da biomassa para abastecer cidades, transformar realidades e mover economias. Faz desenvolvendo tecnologias com foco na eficiência energética. Que consomem menos recursos e entregam mais resultados. Reduzindo desperdícios e aumentando a performance de ponta a ponta. Faz impulsionando a mobilidade elétrica.
Que carrega diversas possibilidades e reinventa caminhos para transporte mais limpo e com menos emissões de poluentes. É progresso em alta voltagem, a cada pisada no acelerador. Faz trabalhando a inovação que gera eficiência operacional. Com a automação, eletrificação e digitalização dos processos produtivos. Tornando as indústrias mais conectadas, mais competitivas e mais preparadas para o amanhã. O mundo pede eficiência. A WEG faz com inteligência. O mundo pede sustentabilidade. A WEG faz com responsabilidade. O mundo pede futuro. A WEG faz o presente. Tudo porque, quando o mundo pede... A WEG faz.
Good. Welcome to our second part of our presentations. As I mentioned before, if WEG Day is a bit different, it's because we are working on certain topics that we deem very important so that you can understand our strategy.
So there is one more topic here that is very, very important so that you can understand how it is connected to our strategy as a whole. We started talking about products, nano microgrids, and now we get to the grid itself. And grid, as you know, is suffering with the increasingly use of renewables. We have increasingly more instability on the grid, and these instabilities have caused, in a general way, we have seen the power outages in Spain, Portugal. We've seen outages in Chile. We saw situations in Brazil last year, and these all bring challenges and opportunities as well. And I'd like to show you how WEG, this company that is providing solutions for energy transition, how it is seeing this problem and how we are responding.
And with solutions we are proposing, and something very important for you to understand is that we didn't have much time to explain because the Reivax acquisition was after WEG Day last year. And I'd like Carlos Grillo, so that he can explain to every one of you what is the vision of Reivax within this context of the strategy as a whole. So the floor is yours, Carlos.
Good morning. It's a pleasure to have you here, Cássio. Good morning, everyone. Once again, I will try to start this topic of the modernization of grid, but more importantly, the reliability of the grid. We made a purchase last year. We acquired Reivax. We announced it. And Reivax, just to shed a little light on it, is a company that was not a startup. It was founded in 1987. It has had a very good reference in control systems.
Energy is increasingly more complex. The grid is more complex, and the control has to be increasingly more intelligent so that it can deal with all those different sources: solar, diesel, different loads. So Reivax brings this in its DNA, and it has operations in Brazil. It's based in Florianópolis. It also has operations in Canada and in Portugal. About 60% of Reivax revenue comes from foreign markets. And then I brought back that graph that I've shown you earlier on when I talked about the V2X. We explained briefly nanogrid, microgrid, but now going a little deeper. When I look at these different resources, distributed resources, I have to see always with the point of view of energy and intelligence. And when I see the microgrid, as Nando has explained, the generation is multiple. It's biomass, solar, wind, and storage is BESS.
There may be the storage component or not. The consumption, unlike our homes, it's a more complex one. It's an irrigation pivot as in a hotel with vehicle charging industry with its machinery that it has to keep production at peak hours. When we look at the intelligence standpoint, the intelligence of the microgrid demands a little bit more than the V2X of ours that has all the intelligence and we can talk through Alexa. Here it is much more complex. It has the PPCs. For those of you who are going to visit the plant, you will see the power plant control, which is responsible for connecting the external grid and dispatching that energy. The SCADA, the software, the EMS. That's a very complex system that makes this control layer. The communications, obviously. It's a complex system of microgrid. It has the intelligence to it somewhere.
It makes a decision. It has to send a signal to the solar panel to tilt a little longer. It sends a signal to a biomass generator to increase the voltage, whether the voltage has increased, and so it controls everything. The hydraulic control may also control the lateral part of the generator, but also the tilt of the fans of the turbine, so we have to control from a decision from the intelligence, so that takes place in the microgrid on the machines that are involved, and the orchestration, in this case, we are talking through Alexa, and that I'll do it myself, but in the microgrid, no. You can connect the utilities, and one new thing is the grid code. Every country has their own grid code I have to comply. One thing is Brazil with the ONS, the national operator. Something else is Norway's system.
The grid code, the understanding of the grid code is very important. In the traditional grid, which is the topic of this very presentation, is a similar thing. The difference is that the energy and generation may have other components. There could be nuclear. Brazil has a nuclear power plant. There may be gas. BESS is the best option for storage. In consumption, Brazil has a privilege. The consumption is integrated. The system in Brazil is integrated. This energy may be generated at the Madeira River up north and may be delivered here. It's an integrated system. When I get at the intelligence layer, I fuse things to control and communication. It's one thing because it's much more intelligent. The PPCs are there. The SCADA, EMS, everything. Here, apart from respecting the grid code, I have to model.
I cannot make a new solar power plant connected to the national grid without a modeling. Take this information to the national operator, the ONS. That is an intelligence that is pre-ordered. I have to convince the operator of the agency that that is a good thing. All this modeling of the grid code is a very important step to make it taken. Here, the orchestration, different than my home that I speak through Alexa, different than the microgrid that I talk to my client to see what is the components here. With the grid is the ONS. I have to comply with their rules and regulations. All this complexity, I can see the different grids, the nano, the micro, and the grid itself. Reivax comes because of their expertise on this area.
Because they have the expertise in the control of the machinery, be it the microgrid or be it the grid machinery. But they have a lot of experience in modeling to have these connections with the regulators, with the grid codes. So this is the rationale behind this strategy of acquiring Reivax. And only to wrap it up, here is a map. It's not very glamorous, but it's a diagram of the national integrated system. Every line of this is a river in Brazil. And the watersheds and these nodes here are a power plant in Brazil. And 20 years ago, about 90% of Brazil's energy came from hydroelectric, from water power plants. And 20 years on, where is this difference? What's the difference with the renewable, solar, and wind? And solar and wind has an inverter, a voltage that switches.
And every problem, instability, a short circuit, it will break. There is a little inertia. So that's why the equipment for higher inertia to give this protection. Coming back here, the rivers of Brazil, the border of Brazil and French Guiana, here with Uruguay, there the Amazon River, you can understand. Here the São Francisco River, here the Jacuí River, that flows into the Patos Lagoon. So 60% of our energy comes from here. And Reivax is only on those ones. So all the control system of Reivax and all those hydropower plants. And here we have Itaipu, which I forgot to mention. So the importance of the intelligence of Reivax to support us in this journey into a more reliable grid, into a more integrated, horizontally integrated grid, since the transformer and intelligence up to the service.
Here, also, what I have sent, all the possible sources they have to have a control. You control the BESS, the wind, the solar, the inclination of the tracking, the hydro turbines, thermal substations. And I dispatch these energy of our power plant controls organized by SCADAs. And I still have the synchronous condensers to give this inertia and consistency. And Reivax operates in all these junctions and all these machineries. Did you understand? Did you understand the importance of Reivax for the strategies to supply all the solutions?
Can you also get it that without Reivax, we would run a risk in our strategy for synchronous condenser? I think it's clear now. We have mentioned that in the past. And last year, João Paulo said that when we talked for the first time about synchronous condenser, we gave you an idea that we thought that would be a trend.
We also sold the condenser function. Now I'll invite João Paulo, who will show you what WEG has built, what is the solution we built in order to help grid reliability. Because the issues we had recently around the world, this solution would help solve the issues we've had recently in different parts of the world.
Good morning. Earlier today, I was sitting here listening to the presentations, and I got a report saying that the event in Portugal and Spain, these were different events, a problem, a disturbance in the grid, but not caused by under voltage, but by over voltage. Data show that the problem was due to a consistent over voltage on the system, on the grid, meaning basically the following: excess power generation with a drop in demand, thus leading to over voltage. The voltage goes up.
A system to protect the system started putting the systems down. That was a lack of control. That happened in Chile for a different reason. That happened in Brazil in August 2023, when a transmission line in the state of Ceará was down. Then 10 different states had power outages. The state of São Paulo was affected, by the way. That happened. This has been happening more frequently. Why is that the case? Because the grid has become increasingly less resilient. Let's take as an example a country like the USA. A power supply was by thermal power plants, coal power plants, 300 mega generators operating full load with fixed rotation to generate 60 Hertz, which is the frequency in the USA. In Brazil, in Europe, it's 50 Hertz. As they migrate to different technologies.
And here, I don't think everybody thinks that coal is a power source that has to be avoided in the world. As we migrate, you have increasingly unstable systems. It's still valuable, but unstable. So synchronous condensers. Well, in Brazil, we have many synchronous condensers. But in the past, synchronous condensers were there to regulate as a function in load variation and not generation. Now, synchronous condensers have to be added or installed because of variations in generation, particularly as we progress towards the use of wind and solar energy. But what is a synchronous condenser? Now, let's look at it. There are 18 turbines, 700-800 mega each. It's a big rotating electric machine with a lot of inertia that operates as a constant rotation. So it produces constant energy. What the synchronous condenser does, well, it's a very similar machine in Itaipu. It's a generator.
It's a 700 mega generator. Now, if you take this generator, but it's not moved by the turbine, you put it beside a substation, and you accelerate this inertia with power coming from the grid. Once it's accelerated, it will not consume a lot of power. And then it rotates 24 by 7. But there is no turbine. It is moved. It's driven by the power grid, grid power. When there is a disturbance, a problem in the grid, for example, under voltage, the machine will deliver reactive voltage to the grid to reestablish voltage. Likewise, when the voltage goes up, this machine works as a brake to hold voltage down. With that, it helps reestablish voltage drops or dampen over voltage and help reestablish frequency. Is that clear? It's very similar. So it's a machine that just rotates and rotates.
In many cases, it doesn't even have an axis point or tip. Here we have a representation of a system that we have already supplied to the USA. This is a synchronous condenser. In the edges, we have heat exchangers. It has here a machine to accelerate. Because since this is a very large machine, if you try to connect it to the grid, it will cause a very big disturbance on the grid. You have a very smooth acceleration with this machine here. When it reaches synchronicity or the rotation that will produce 60 Hertz, only then you connect it to the grid. Here, basically, it provides reactive power. It also provides inertia and megawatts per second. The power contribution to the short circuit. These are the features that the synchronous condenser delivers to the grid.
But WEG has been making the synchronous condensers for years. We delivered one of 100 MVA for electric utility like 20 years ago. And why were we not successful? Not very successful. Because we thought about supplying only the machine. This is the synchronous condenser. And we would supply that to customers who were actually our competitors. I won't tell you who they are. You probably know. These are five major world companies that, by the way, operate in Brazil. But they make their own synchronous condensers. And they would come to WEG only looking for those frequencies that were not very competitive for them. And then we had a contract with one of our competitors. And they were going to buy a 50 MVA machine from us. Three months later, they said, "You know what?
We decided that we will make the machine ourselves." And then they canceled their order. This made us think, "Why don't we do the compensation function instead of the condenser function, instead of just making the condenser?" You know, WEG has a stator system, has a transformer, has an excitation system, has the circuit breakers. We have it all. Then we decided to change our strategy. And then we started selling to Canada, USA, Chile, in Brazil. So it became a very attractive business for us. But we had an issue. Basic grid condensers, I'm going to show you, they have a power which WEG doesn't manufacture today. These are higher powers. And these are very heavy machines. Our plant is not able to manufacture them, to handle them in our plants. We have a project. It's been announced, five condensers to Chile. And we are having a hard time.
You will see this later today. It's quite complicated to handle with that size and that weight in the plant as we have it today, and there are many opportunities out there for bigger condensers. This is when we decided with the new portfolio, together with other projects we needed to make, to announce this new investment, a manufacturing unit that will make a turbo generator for our steam turbines up to 200 megas, and also condensers up to 300 mega, so here we have a depiction of a power system. It can be the Brazilian system, the USA system. They're all very similar. This is what we call basic grid, which are 200 kV systems up, particularly the one on top, which is 500 kV. At this range of voltage here, we are talking here about transmission lines from 5 to 20 giga.
When we talk about this level of power and voltage, talking about batteries, it's not really economical. Why is that so? Because in order to make a difference in a 20 giga grid or line, adding 100 mega, that's just like a drop of water. You have to have here five, six, 300 mega condensers. Then you will really make a difference in terms of damping. This is what ANEEL is doing now in the auction that will take place on the 30th. Five synchronous condensers of 300 mega each. Here, 230 kV is still synchronous condensers. We have various applications for distribution or for the industry. For example, we sold one synchronous condenser of 25 mega for ExxonMobil in Texas because they have a refinery there, which is end of line.
They have a lot of voltage things which were causing problems to their process. So I don't know if it's already on the way. Yes, it is. So we will deliver the system to ExxonMobil. Here, when we talk about distribution lines, we still can have synchronous condensers, but these are 15-20 mega condensers or batteries. Just for you to understand the difference, where we use batteries and where we use condensers. Projects and opportunities. Today, we have 1,200 mega MVAR. This is not megawatts. This is reactive power or 1.2 gigawatts of power MVAR in execution or in the pipeline. So we have changed our strategy. We have a very good portfolio. In Brazil alone, we have 2 giga of opportunity with this auction. We have sold other condensers outside this auction. We sold that to different utilities.
In Latin America alone, we have mapped almost 5 mega of opportunity until the end of this year. 5 giga. This opened up a new path for us. This is a system we installed, turnkey, whole execution beside an already existing substation. The customer, Vestas, asked us to make a machine house. Usually, it is installed beside a substation or a wind farm. This is for Canada. This one went to Maine. We have been making progress in this market. This is a very important point. There is something we didn't mention when we talked about Reivax. We are talking here about grid reliability. You see all this challenge faced by the whole world. Reivax comes from a control system retrofit. Control, correct me if I'm wrong, João Paulo, control is updated much more often than a machine powering.
Acquisition of Reivax gave us the know-how of the control for the Brazilian system. Reivax also operates very strongly on the retrofitting part of the system. Later, we will connect that to the service area. João Paulo talked about the synchronous condenser solution to provide stability to the grid. Another tool, another way of providing greater reliability to the grid is BESS. Reivax with modernization and retrofitting, synchronous condensers. Now we will see the third solution provided by WEG. Let's talk about BESS.
Okay, folks. I've shown you the portfolio of BESS just to locate you on what was spoken before. Let's get the microgrid and nanogrid to exemplify. We're speaking of our business unit that we are the big BESS or small BESS because we have small to big solutions.
You can see that in the nanogrid, we have batteries up to five kilowatt hours. These are batteries that we have been selling for quite a while along with solar systems. People already opt for a solar system with a hybrid inverter that has solar and battery. Of course, that for residences, the only function would be for backup because in the home, you have a single phase. You don't have a big peak shave or other functions that would work with the BESS. We spoke about this middle of the way, various microgrids that we mentioned the cases. In this middle here, I would like to say that 20 kilowatts, we are at the moment generating 20-kilowatt generators that we use in Brazil to place in the home costs around BRL 50,000 million.
If you get our battery with a hybrid inverter, semi-solar, we are offering something much smaller than this without noise, without diesel use, and without space, so we are gaining in space and scale with these smaller storage systems and backup system. But what we're going to talk about are bigger systems, and João Paulo mentioned synchronous condensers, but this battery also has more utility in Brazil, so it would be for big shaving applications, which I'm going to discuss. Here, the solution is different than the microgrid solutions, which is only one panel. When you go higher up in the scale, the product here is composed by two parts. We call it the DC block, which is this part here, which is a continuous current part.
In this DC block is the cell connected through battery packs, all interconnected to a heat exchanger, a chiller here, which is a very important component with a DMS in panels integrating all of this in this container. This is skid here. We have the AC part, which is also a skid in which we place a transformer and the PCS. The PCS is very similar to a solar inverter. It's called power control system, which is very similar to a solar inverter, but it's bidirectional. It transforms alternating current into AC into DC, DC into AC. It's bidirectional. I see a lot of similarities with the solar, the cell as if it were the solar cell. But the rest of the electronics, we know a lot about it. We have a lot of footprint on this.
We know a lot about this technology. We consider ourselves very well prepared for this challenge of higher voltage for bigger power plants. As João Paulo had mentioned, Brazil is going through a curtailment. What is that? There are several solar power plants that about 20%-30% are unable to connect to the grid. They are being prevented from doing that specifically because the grid gets down when there is an over demand, not only when there is an under supply. With the government plants, we don't have subsidized or supported auction to incentivize putting more solar energy into a bigger grid because there is an over offer at around midday. That was caused by the distributed generation in the system that cannot be controlled. Now we have a phasing and instability phase.
I know I can tell the person in their home to put 10 mega in their home. It costs around BRL 10,000. So they're doing it. So that's going to mean an instability of the grid. And it's already in the government plan to make an auction for the BESS, only for BESS. And that is going to be meant for stabilizing the grid. And that should take place around June next year. That is our forecast. And we are very well prepared with a complete solution. And we are already seeing all the microgrid cases. And we see that the battery can have many more than only one function. We have a voltage control, arbitration of energy, frequency regulation, but at this first moment. And that's why the rules of the auction are being discussed. It's likely that a big shave to load on other times.
There are some GD1 generators that are much better to distribute. They can put 5 MW of small power plants. And this 5 MW is being discussed. 5 MW is at midday. But if I put battery, if I increase my part, may I put.
Thank you, Neto. People, just to bring all these topics together, grid reliability, we are speaking about control system, which WEG has this control, this expertise with Reivax in the auctions and the opportunities that are coming up, Brazil and foreign markets. Brazil, do we have the synchronous condensers, the systems of synchronous condensers? And this is the strategy that we are working. Brazil and in foreign markets, it started in the United States, Canada, then South America last year when I mentioned that BESS would be a great opportunity. You can now see several applications in CNI that Neto has shown.
And what we have been using in the agribusiness, building several examples, several microgrid cases. And there is a very important case here that many of you asked me, which has to do with the digitalization. And I'd like now to show you how WEG is preparing itself to increasingly bring more digitized solutions to our clients. And it is worth mentioning that this journey started a few years back before the WES acquisition. WEG bought four startups. We bought a company, V2COM. We bought a BirminD artificial intelligence company. We bought a PPI-Multitask, which was a company of MES and Mvisia division. So that was the journey that allowed us to bring and gather the know-how to build WEG Digital. And along with that, WEG Digital is an umbrella business that constructed the whole system that we took to our business unit.
WEG built the strategy, built the platforms. Then each business unit formed their own digitalization team. I am proud now to invite Alan, who is our head of WEG T&D. He is one of the persons responsible for this development. What is he going to show you? The grid is there 40, 50 years. Are we able to modernize this system? That's a good question. Can we digitize this grid in order to bring more reliability? That is what Alan is going to share with us now. Thank you, Alan.
Good morning, you all. I am Alan Vicente. I am the Global Industrial Director for Transmission and Distribution. It's a pleasure for me to be here with you at WEG Day. I am responsible for the WEG T&D process in Brazil.
We're talking about 15 plants, also responsible for the cycle of investments that is geared toward doubling our capacity by 2027. Here we are going to explore a little initiative for digitalization in order to modernize the grid. I'd like to start my presentation talking about two very sensitive topics. One is the demands of the grid, and that is a reality and is getting even stronger. The other one is the aging of the system, not only in our markets where we operate, but we can see that the fleet of our transformers are near the limit or over the age limit. These two issues bring a risk and an operational complexity that is very great to the grid. We need solutions with intelligence and digitalization.
For you to have an idea, the smart transformer market and the digital substations, the growth projections for the next year are bigger than the transformer market itself that is already experiencing a lot of growth. So there will be a lot of opportunities. And the idea is to explore and capture these opportunities because we are very well prepared for that. And I'd like to start by speaking of our portfolio. Kuba has spoken of the journey of WEG. And for our unit, it was no different. Along the years, we built a very interesting portfolio, an ecosystem of digital products. And in our strategy, we focus on two fronts. One front of asset management and another one of substation digitalization. In the asset management, we develop a platform, which is the WEG Transformer. It's sensorial, intuitive. And this information goes to the cloud.
And we furnish a control layer and a more sophisticated one with AI to help decision-making and asset management. And we created this platform to be embedded in any manufacturer's machinery with many manufacturers with transformers fleet with several different manufacturers. They have a need to have a single control system. And this system can also be integrated in all our line of products, the pole transformer all the way up to the substation. So we encompass the whole market with a very robust portfolio that is innovative and very competitive. In the digitalization of substation, we have evolved a great deal in the last few years. And let me speak about the concept of a digital substation. It is an asset, but we substitute an analog station with new forms of control. So we're going to have optical fiber.
You're going to have intelligent electronic components, standardized communication protocols because several stations have different manufacturer equipment. You need efficient communications. You need to bring intelligence to this substation, connecting all the components. WEG can offer new digital substation, be it conventional or mobile, or it can offer a digital retrofitting that can have a partial or a complete scope depending on the strategy of each client. This portfolio, in our understanding, we are very well prepared to face these digital demands. WEG will advance in a speedy way. Because of this portfolio that was built in the last few years, WEG T&D has a complete coverage of the grid, generation, transmission up to the distribution.
We are able to embed technology and to give a differentiated solution, be it in industry or the transmission lines where with big equipment that demands differentiated control or equipment of critical equipment, such as data centers up to the technical complexity, so as photovoltaic with their variations. We have to maximize the use of these assets and operational capacity. A key step that is very important in our strategy, digital strategy, and motivated by the importance that we give to the digitalization topic, we have implemented in Blumenau very near our factory plant here an innovation center. At this innovation center, we are going to address all initiatives geared towards initiatives for the digitalization of process. We're going to have an assembly line for substation protection, control, and supervision system, which is the brains of the substation. We're going to allocate over 400 employees.
This is going to be a multidisciplinary team, engineers, data, so that we can have more competitiveness and velocity. We know that the digital world moves very fast, and we have always to be a step ahead. I will show you a few cases. The first one is digitalization of substations, Cargill. This was a pretty interesting case. The customer was doing a brownfield in their new plant. When they came to us, they said that they were having some difficulties in conventional substations and other operations. Operational maintenance problems, some maintenance work they needed to perform, they thought that they could be avoided, so shutdown in production that could be avoided. We looked at their needs. In partnership with Cargill, WEG was a pioneer and launched the first digital substation with a digital transformer.
This substation is operating in Três Lagoas, Mato Grosso do Sul state. And their operational conditions are much better than a conventional substation. And what was the impact on the customer? First, lower CapEx and OpEx because their maintenance expenses were reduced, reduction in physical footprint, command house is tested, comes out of WEG tested, reducing installation costs and time. Copper cables were replaced by optic fiber. And this type of solution, we can get 40%-80% savings. A lot of reduction, not only in material costs, also reduction in carbon footprint. And also, it is simpler to build this. So it provides more agility in future expansions. And finally, it's more resilient, it's more robust, better communication protocols, redundant protection, communication controls, and therefore, they can have early fault detection, summing up. It is much more resilient for the grid. Another very interesting case, this for Gerdau.
This is an asset management case. This is a full solution, asset management and digital solutions. So they were having a hard time. This was a plant in Ouro Preto in the state of Minas Gerais. They had a 2 MVA transformer, and they were having many issues of production shutdown because of grid instability. And they were spending a lot of time with their maintenance crew, and they had to go to the field. The maintenance team was being exposed to risk because the equipment was energized, and they didn't know what the problem was. So they came to us, and we indicated a WEG industrial transformer specialist. And operationally, they are in much better condition. So they have now real-time monitoring in the cloud, wherever they are. And then real-time monitoring, AI helps them in making maintenance decisions. Now they have more prescriptive and predictive maintenance.
This platform has a very interesting feature, which is the health index of the transformers, which is very useful for those who have a transformer fleet with data collected in sensing. They rank assets in criticality to schedule maintenance. And today, they have greater availability and reliability in their production. And to close, wrap up my presentation, this is a very special case. I don't know if you recognize this picture. This is the largest industrial motor plant in the world. It's our plant here in Rio Grande do Sul. And here we have a lot of digital solutions. We have a digital substation and asset management system for the plant and for the transformer. So we did all that to have more reliability, more efficiency, and more simplicity. So these are the things we do, and this is the things we believe in.
And we also think that the future of the grid will be digital.
Thank you very much. Thank you, Alan. Here we have some interesting messages for you to see how we scale our businesses. So a few years ago, we were talking about digital WEG, and we would show our wire factory. And we do that through a dual strategy. First, you use it in-house, improve, and then you take it to the market. WEG Digital was really outstanding in consolidating the technology and each business unit scaling it up. What Alan has just shown you today is a new growth vertical because this will open up new opportunities for us to work on the grid on what is already installed, right, Carlos?
Where we can provide a service layer, where we can provide a layer for control retrofit, where we can digitalize to provide greater reliability to the grid. And this doesn't compete against our transformer plants. And that's great news. We have a center today for the development of digital solutions with WEG T&D, which is in another location in Blumenau. We have 400 employees working on this team to show you that we work. So we want to get speed, mass, and deliver new transformers. That's one thing. But we also believe that delivering only transformers is not the future. We will deliver transformers and also the controls for the assets, which is what WEG Digital is doing together with the TD team.
T&D is digitalizing the process and the assets that have been installed 45-50 years ago in order to prioritize knowing where the service team has to do repair work or replace products. We are coming to the end. Now, I would like to talk about the last step of this idea we had in terms of providing grid reliability. Now, when the whole board started discussing opportunities for the future, we see the service area as a big opportunity to be tapped in. So we talked about different service layers, service layers that will be part of electric mobility and service layers where we will be increasingly delivering integrated solutions to our clients so that they can be really reassured. For example, when you talk about charging stations, one out of ten vehicles in the world cannot charge when they want to charge.
It is important that that team, the box team, knows what has to be done, what has to be updated so that these charging stations can work and are operational for any vehicle, either a brand new EV or one that has been used for some years. When we work on services, services and in products where WEG is already a leader, I'm talking here about large machines, we shouldn't think that we will sell a 100, 200, 300 mega and have no services for that. Services is starting becoming increasingly part of our DNA. Over a decade ago, when we bought TGM 14, TGM, when we acquired TGM in 2018, we entered the services world, and we were not used to that. We made a lot of progress. Sinoti led that operation for some time with their team, and we learned how to operate assets.
The service bit, for instance, TGM, Paulo Sinoti, became a major part of our business and what we are doing here. This is a new vision. It's almost a new vertical component. This is an opportunity that starts to be deployed, meaning also making retrofitting and maintenance and big equipment, large equipment. I'm talking about the equipment Paulo Sinoti is going to be talking about, but particularly, we are finding many opportunities to scale up services for traditional products and doing that globally. What he's going to be talking about now is not really based on traditional products where we are in the whole world, but this has to do with the new vision we have for the services area for this particular business, which is grid reliability. I'd like to invite Paulo Sinoti. He is today Director for Energy Solutions and Services.
More recently, starting this year, he's also responsible for building this business. Sinoti, the floor is yours.
Thank you, Kuba. Good morning. It's a pleasure to be here talking a bit about services. As Kuba said, this complements the whole package of solutions WEG provides to the market. WEG mission in services is to support our customers in their journey to guarantee the availability of their assets so that they have safe and reliable operation of their equipment. This is a representation of the grid. We've seen other representations of the grid today, but anyway, we see everything that is connected to the grid. We have the plants, the generation plants, hydroelectric power plants, large ones, medium-sized power plants, and small power plants, thermal power plants, wind energy farms, solar energy power plants, green hydrogen, synchronous condensers, biomass, thermal power plants.
The cities, the consumers where they are, so the cities where they are shopping malls, everything, condominiums, industry, all that is connected to the grid. This is the reality of the grid. When I look at this picture, considering now the services, what can we see here? We see here a huge industrial complex which is operating, which becomes bigger and bigger every year because every year we have more developments that are connected to the grid. We have plants here that are older than 40 or 50 years. We have brand new plants, and they enter into different maintenance cycles. These maintenance cycles bid for repair or retrofitting or to have plants in conditions to properly operate. We also have modernization of these plants.
Kuba has already touched on that, but they enter into modernization cycles where they will update their technology, thus enabling to have better efficiency and also enabling them to reduce their operating costs. So when we look at that, this is a world of opportunities thinking about services. This is all available for us to work on. And this is something that applies to the whole world, not only to Brazil. The whole world has the same situation. What is installed has to be available and has to operate properly. This is the service baseline. This is the scope. This is the WEG product portfolio we're talking about: transformer, substations, generators, turbines, and gearboxes. Gearboxes, they wear out during operation because of friction. So we have to schedule shutdowns. It is normal so that they can operate normally. Reivax, voltage control system, medium-voltage drives, and so on.
This is all part of the WEG product portfolio. Services will be based on this product portfolio. The important thing is the mission. The mission is to support our customers in their journey to guarantee availability. The brand doesn't matter. We will support our clients on their needs no matter what the brand of the equipment they have is. Looking at the scope of services from retrofits, repairs, and wear correction, this is the basic, which can be done either in the field or in our workshops and plants. Modernization and repowering of plants. This is a very special opportunity for us in services. I will give you an example of the hydropower plants.
Most of them are older than 30 years, and they enter into a very important phase of modernization, retrofitting, where control systems, particularly control systems, will bring efficiency and operational gains for these assets and also equipment repair. And WEG will go beyond WEG product portfolio because we are full EPC contractors. We provide the whole offer to modernize these plants. And we are then responsible for a full package. A lot of opportunities here in terms of plant modernization. Of course, this is not limited to hydropower plants, also thermal power plants. Talking now about monitoring, WEG RM Guardian for rotating machine guardian, RM Guardian. There we work on diagnostics, evaluation of insulation systems, and risk mapping where we can follow how. What is the performance of the machine and the service life of the machine?
We can monitor and follow all that, analyze trends, and then schedule a shutdown for repair, for maintenance at the best time for the customer, avoiding or preventing an unscheduled shutdown, which is what they do not want. To wrap up this part related to services, we have O&M. WEG works on operation and maintenance, particularly within these four initiatives: wind farms, all wind farms. We have delivered, we provide O&M. So this is a full solution provider. We design, we manufacture, we transport, we install the system, we commission it, we connect it to the grid, and then it operates, and then we are in charge of maintenance, providing high availability. Field engineering, remote monitoring, predictive, preventative, and corrective maintenance. This is all part of the O&M in a contract that may vary in time depending on our customer's needs. This is what I had to present.
Thank you very much for your attention.
We are getting near the end. I'd just like to give you the final announcements here for everyone so that we can wrap it up, our vision. We have worked a lot on this vision today that energy transition is at the center of the strategy of our company. The energy transition, I would say that we mentioned three very important topics: our e-mobility solutions in which we were, as well as what is embedded in conventional vehicles, as was shown today, as well as in the recharging station, in which WEG has a very wide array of solutions to be a global player, including sending a director to Europe. And what is going to happen increasingly in the world is what our director in Europe is coordinating. And we talked about microgrids and several solutions that we have for the day-to-day implementation.
We're not talking about the future. We're talking about things that we are selling today because it's reality, because the cost of battery packs have reduced a lot, and we spoke now about how we are preparing to work with the grid that is having an acceleration because of the use of the increase of the use of electric energy, but also by the generation of renewables that is entering the grid. There are several opportunities that we have shown you today, and it's worth mentioning that these are high-technology equipment, equipment that need a high level of reliability. It goes without saying that there's a topic that we haven't mentioned today, which is data center, but a lot of what we're doing today has as a final destination data center, and that has. All of this, we are wrapping around a service layer.
We are putting it together with services. So the layer that we are doing for wind generation, I think we need to have an OEM for BESS in order to guarantee that the BESS works in the future for all adjustment of battery is carried out by a team that knows what you're doing. And in the same line as we are mentioning, talking about batteries, we're talking on e-mobility, which has a dedicated team. So you can see that we are trying to bring it all together and connect everything in the strategy of WEG, that is products, systems, and solutions with a service along all the life cycle of the assets. So every one of these business units, all of this business generates an opportunity pipeline for growth in the revenue with verticals that we believe are very good margins.
I'm speaking about business that WEG has already a great expertise. Major business, we are accelerating everything that we brought to you today, our businesses that WEG has already been operating for a lot of years, and we have a lot of expertise in order to create new opportunities. I also like to say about the energy transition inwards because it's very nice to speak outward, but not look inside your own home. WEG has taken a very challenging last year when we had a sustainability director nominated last year, and we constructed our vision to reduce scope one and two up to 2030 and neutrality up to 2050. We have managed to reach until last year a 28.2% reduction in that target that we have for 2030. For 52%, we are fully convinced that we are going to follow and meet these targets.
We are doing a mapping of all the possibilities for reduction in Scope 1 and 2. Our operation, our example of how this is evolving. Not long ago, we had limited generation and transmission, and then apart from two SPVs for solar energy generation for our own use, we have several plants with solar energy supplying. So we're talking about Austria. We have an example of Mexico, China, but also we have in Portugal. We also have in Turkey with a new condenser plant. In all places that we can work with renewable, we are doing so. In 2024, we reach 70% of all the used energy coming from renewables, and we are going very well along this new journey that we set ourselves. I'd like to announce something that is new. We have approved our reduction targets with the SBTi.
So there is a scientific methodology behind this to validate our calculations. And we have also included the Scope 3 reduction. So we are following global trends in emission reduction. And WEG, for all these steps that we have taken the last three, four years, we are recognized by several international organizations such as EcoVadis that attest for all the efforts of the company in order to look for sustainable solutions. And WEG wants to be a reference, not only in terms of what we sell, but also on what we do in-house. So to wrap it up, I would like to end by a very brief message on all that we have discussed because many of you have asked yesterday about all that is going on in the trade conflicts and geopolitical conflicts that are going on.
And first, very important topic is all the strategy for long-term remains intact as it was when we made our strategic, we mitigated. We had already an example to mitigate, and we are an example for the world industry of a global footprint, differentiated, and diversified portfolio. And we have always had the focus on opportunities with an eye for the mitigation of risk. We were never only for the low cost. And along the time, I think we have made it to translate into consistent growth. An important point that we comment here today was there is a big pipeline of CapEx of major business, BRL 2.5 billion in T&D ongoing. That part is going to be finished next year. And in 2027, the great volume of new plants coming into operation.
Now we have started a new phase, which is the phase of WEG Energy, in which we are looking increasingly to operate energy generation to increase in the motor production, in which WEG wants to have a bigger and more relevant share given all the growth that we've had in industrial motors so far. This new investment opens up a space in the plant of Gravataí, Rio Grande do Sul, in which you're going to visit today, how full it is to increase the scale for higher, medium, and higher voltage motors. With that, we open up a new plant that is going to allow us to wrap all the portfolio of electric machinery. WEG is becoming a complete player in this area. With this CapEx, we are going to form the greatest center for great electric machinery.
I think WEG has constructed, thanks to the vision of the founders. They always had this vision of innovation. They always had this long-term vision. Thanks to that, we have over 4,700 engineers in the company. We managed in Brazil, given the context of the company taken in Brazil. We were able to attract even more engineers. We are making a new center of engineering to specialize in this kind of technology, which is kind of an old-fashioned technology when we look at Europe, for instance, for this synchronous condensers. Global footprint and verticalization of a process are part of our culture. You see that everything that we are placing as CapEx, we are trying to make it the more vertical possible way that allows us for controlling our quality and supply chain and everything, but increasing our competitiveness.
And we are looking now at a scenario of high demand cycle, but all demand is cycled. So I hope that it comes in coming decades. And I hope I'm not the CEO anymore, but the world cycles itself. And in one given moment, there will be more demand and more offered. And we are preparing ourselves with verticalization and competitiveness to be ready to compete in the future as well, in which we are going to have a bigger challenge to bring new entry sales indoors. When we have several things working such as we have today, it's more difficult. As you see, it's a lot of the future that we're bringing to you is digital solutions, electric mobility solutions, all micro and nano-grid.
These are all things that we believe that can translate into great verticals for growth along with services because with this magnifying glass that we placed on this, this is going to bring a lot more sustainability in terms of margins when we grow these revenues. Services obviously have greater margins, and that will help WEG to grow with quality. Thank you very much. I think we have a Q&A session now. Thank you very much.
We will start the second Q&A session. I'll call Kuba and I'll bring also the managing directors, Grillo from WEG Digital Systems, João Paulo from WEG Energy, and Carlos Prinz from WEG T&D. Please come to the floor. So just as we did in the first Q&A session, if you want to ask any questions, please raise your hand.
When you get the mic, please tell your name and then ask your question standing so that we can also film you so that those who are online can see you asking your question. Going back to the synchronous condenser question, if you could talk more about this market, is it easy to sell to this market, or do you have to work a little bit?
Thank you for your question. For the new plant, we have some products we will take or remove from the current manufacturing plant, which is production of turbines for water power. Maybe some of the wind turbines too, they will be taken to this new plant. This is part of the plant. Now, bigger machines from this plant here, they are at the limit. You will see today synchronous condenser for Chile, which is a very big machine to be made here.
It causes a lot of disruption, flow disruption in the plant. This will be manufactured in the new plant, but the main goal of this new plant is what we call new portfolio. Products WEG doesn't make today and that we'll start making. I'm talking about synchronous condensers, 150-200, 250-300 MVAR synchronous condensers, which is a product we don't have today. And also turbo generators up to 200 mega, which we make today up to 100 mega. So this is a very significant progress also to work with steam turbines. But the important thing to say is we have some opportunities to start this plant with big synchronous condensers. This is going to be an auction. I don't know if we will win, if we get it. We will know that in a few months. Maybe the plant will restart with good load.
Anyway, we are not counting on that. The important thing is to have the infrastructure in place in order to be able to start production when we start having the sales. I showed you before that there are many opportunities. Five giga just outside Brazil in South America, two giga in Brazil. There's a big opportunity in the world. This plant will supply to the world because we have no other plant that can manufacture this type of equipment. This is going to be the first plant that will supply to different markets around the world. This is a journey with this new product portfolio that may take some time for us to fully use our capacity.
We are going to focus first on this kind of products that have a higher demand because synchronous condensers motors in the market doesn't grow.
The GDP does, but there is an entry barrier that is bigger. It is much easier and more intelligent to work on what the growing demand or you're going to have a ready plant that is much more aligned with what is going on. Because if you go to a major market, WEG has to open up new ways. We have to put more revenues in order to grow more rapidly. Then we evaluated opportunities in which it can grow with less efforts, but with good margins. That is the vision. Synchronous machinery are going to produce, but that is not the main object at the beginning. We want to create capacity in order to be ready to supply the auctions that are going to happen or the opportunities, sales opportunities that are coming up all around the world.
To add one point, the products that we have today, the entry of orders this year is very good. Our plants are at full capacity. This capacity addition, the increase of the capacity is going to allow us to enter into more agreements to make more sales.
Thank you. Good morning. Thank you for the opportunity, Gianni Garbera at BBA, to questions. Thanks for the participation. First, in this increase of capacity, we commented that this capacity is sold in 2027. Just to understand a little bit, how do you see this dynamic of the price in the dynamics of 2027? It's similar to what is going on. You see oscillations. The second question is, how do you see the prices looking a little bit forward? Because I think the other competitors are increasing their capacity. Other players are also increasing their capacity.
How is the dynamic of prices going to behave when the whole capacity of the market is also increasing their production?
First of all, in terms of adding capacity, we started adding capacity in the second half of 2026 with motor operations and instrument transformers, and also with the first phase of the Betim plant expansion. Here we are talking about large transformers. As we have the main equipment from the plants guaranteed, as we guaranteed that the main equipment, we will make sure that we have the proper filling of these plants, meeting the schedule. So the price level, well, it's the price we have in the market today. So this is a price stability. Now, for 2027, most plants are operational. Well, start operations in the second half. So we are now planning the occupation of these plants provided that we have reliable deadlines.
What we see today is price stabilization, both in Brazil and in the foreign market. Talking about a forward vision, future vision, it's kind of uncertain because we see many unexpected movements, tariffs in the USA, the things we see today in the international scenario. But I would say that we have stable prices today. Alberto Valerio, I have a question on services and the expansion of staff. Are you hiring more people? What should we expect? I imagine that you already provide a little bit of services today. What are you thinking going forward? And also, in terms of product differential, if your transformers have some differential? Sorry, I'm learning how to use the microphone. The second question is related to transformers. Do your transformers have anything different regarding your competitors, transformers, particularly in the USA?
I'll talk about our progress in services. From the acquisition of TGM back in 2018, we started to understand a little bit better the services business and the good opportunity of revenue with good margins that was brought by TGM. Gradually, we migrated that to the services in rotating electric machines, changing our transforming or turning our Bernado Campo plant into our hub for services. Then, more recently, around one year ago, we decided to speed up this business. First, with the transfer of our industrial director from India to Portugal, creating a service center for management for Europe and also a service unit in Minneapolis to work with steam turbine and rotating electric machines working in the USA and to coordinate that at a global level and to accelerate growth.
We decided to have this global service management through Paulo Sinoti, who has just given you a presentation, so the services business is accelerating. It's becoming a good source of revenue and results, but we are still structuring it. We now have a more robust, more solid structure for services, and we will speed it up for the whole world. Regarding your second question, I'll highlight two points in terms of what is the difference in our transformers. So first, our response time, WEG since 2023 announced investments in new plants, both in Brazil and abroad, so we know that WEG is important in the transformer markets for the Brazilian market and also abroad, with investments made in African countries, Colombia, Mexico, USA, so our response time to the market, a response to this growth in the transformer market, was very fast.
The second point regarding our competitiveness, well, we have this vocation for verticalization in this investment package, both in Brazil and abroad. A good part of it is dedicated to verticalization, which makes us more competitive. Summing up, response time and competitiveness are things that really make WEG stand out.
Andre Mazini from Citi again, thank you. My question is about a specific product that you don't make: gas turbines. An American competitor makes that. They have a huge demand for that. Maybe it's something hybrid between 100% renewable energy and something that uses fossil fuel. Fossil fuel is in the middle of the way. There's part of it that uses internal combustion, but there's an amazing demand in the USA. What is your take on this product? A few years ago, like five years ago, we thought about it. We talked about it.
We mapped and looked at some manufacturers around the world, and we didn't really find anything that was really interesting. Either it was a very big, well-established manufacturer that very probably we couldn't afford, or it was something that was very rudimentary. We didn't go on with this plan. We have no plans of entering into this business. And maybe a good driver for that is the following. WEG today provides many solutions for power generation, and all of them are renewable. A gas turbine market is a necessary and very interesting market for energy security, but it's not part of our scope, and it's not part of our plans either. Well, if we have no further questions, we will close the second Q&A session and this meeting. I would like to take this opportunity to thank Dr. Décio da Silva, the president of our board.
I would also like to thank Kuba and all the directors for their presentations today. I would like to thank all our directors who were here attending this meeting, the investors' relations team for the organization, the support we got from our IT and marketing team who helped us hold this meeting, and also our suppliers or providers. So for those who are following us online, we have a link to a satisfaction survey. And for those who are here, later, we'll send you a survey form by email. Please answer this satisfaction survey. It's very valuable so that we can further improve our meeting for next year. So thank you all very much for attending this meeting, and see you in the next WEG day. Thank you very much.