It has been officially confirmed that more than 120 new jobs are to be created in the south of the Kintyre peninsula in Argyll, through the establishment of a wind-turbine manufacturing plant on the site of the former RAF base at Macrihanish, near Campbeltown.

The plant will be operated by Danish firm Vestas, a world-leader in wind power generation, and has been secured for Kintyre through the efforts of the Local Enterprise Company, Argyll and the Islands Enterprise (AIE) and Highlands and Islands Enterprise (HIE).

Deputy Minister for Enterprise and Lifelong Learning Alasdair Morrison announced the details of the project today (19 June), as he watched construction work get underway on the site.

The £12 million project is a significant boost for Kintyre, which is a priority area for both AIE and HIE. It will create 124 new jobs - beginning with 100 and rising to 124 as the plant reaches full productivity. It is anticipated that the economic spin-offs will see a further 44 jobs created in the local area.

The development has been secured for the Campbeltown area, against international competition, through the investment of £9.54 million,which includes £3.6 million of EU HISTP funding. This will be used to redevelop the site of the new factory and to erect the buildings.

The creation of such a facility in Kintyre, with the involvement of one of the industry's leading players, will enhance the reputation of the Highlands and Islands as an area with huge potential for the exploitation of renewable energy.

The Macrihanish factory will carry out the construction of towers and generator cabins for wind turbines, and will also be responsible for their final assembly. Manufacturing of the turbines' fibreglass nose cones will be sub-contracted, with that work expected to go to another Scottish business. Vestas currently hold 30 per cent of world sales of wind turbine capacity.

Although the company - which has a track record in training and developing their workforce - will assist new employees in learning the skills they require, it is anticipated that they will be able to recruit some of the staff they require from amongst those who worked at the former Campbeltown Shipyard. They will already have some of the necessary engineering, welding and metal work skills required for turbine manufacture.

The renewable energy sector is growing rapidly through an increasing awareness of environmental issues and technological improvements which are reducing the cost of generating this type of power. In 1988 the cost of generating electricity by wind turbine was approximately eight pence per kilowatt hour (8p/KWh), by 1999 this had dropped to two pence per kilowatt hour (2p/KWh).

Vestas decision to come to Macrihanish was influenced by the site's close proximity to the harbour facilities in Campbeltown. This will make it easier to bring in raw materials to the new factory, as well as shipping completed turbines to the UK and Irish markets.

Managing director of Vestas, Tom K. Pedersen, said: "After almost two years of planning, we are extremely pleased that this project is now progressing. It will provide an excellent platform for servicing clients in the rapidly expanding markets on the British Islands. Mechanisms are now in place to meet ambitious political targets set for renewable generation of electricity, and the creation of a domestic industry to serve this market is the next natural step."

Chief executive at AIE, Ken Abernethy said: "Securing this plant for the Campbeltown area is wonderful news. The whole of Kintyre is a priority area for AIE and we have been working for some time to win this development for the region. Unfortunately Kintyre has seen some setbacks, most recently the announcement of redundancies at the Jaeger textile plant. The new jobs created here will go a long way to offset those losses. Alongside this we are also optimistic that a tenant will be found soon for the new tele-service centre we are building in Campbeltown itself.

"The construction of the Vestas plant will, I hope also be an added incentive to re-establish the ferry link to Northern Ireland."

Sandy Cumming, chief executive of HIE said: "I am delighted that Vestas has chosen Macrihanish as the location for their new wind turbine manufacturing and assembly operation. When I was appointed chief executive of HIE I made it very clear that Kintyre was a priority area for the Network and this announcement underlines that commitment.

"Renewable energy is a growing sector in the Highlands and Islands and an industry in which we would like to encourage further growth. I believe the Vestas plant in Campbeltown will help establish the Highlands and Islands as a source of state-of-the-art renewable technology."