Suzlon to expand overseas offerings

Pune-based Suzlon Energy Ltd, India's leading wind turbine manufacturer, plans to focus on downstream activities in the wind sector this fiscal. The company, whose business comprises 70% exports, is looking at providing services such as maintenance of turbines, servicing of equipments, managing of windmills, etc, for its overseas clients. Sumant Sinha, chief operating officer, Suzlon Energy, said, "Currently, we are offering such services for our Indian clients but the market overseas has evolved in a different way. In the overseas market, downstream activities are not offered by the equipment suppliers." He said the company sees the services as a good opportunity to emerge as an integrated player in the wind power equipment segment. However, manufacturing wind turbines will continue to be the main driver of Suzlon's business in India and abroad. The wind power equipment industry worldwide has been growing at a rate of 30% year-on-year with a sales figure of 29,000 mw worldwide. "This year the numbers are expected to be flat because of the global financial downturn, but things are starting to look up gradually," he said. He said the company would be happy to grow 40-50% this fiscal but said the growth rate would be challenging to maintain when it enters new territories. Suzlon's order book has picked up somewhat in the new calendar year. In the last one month, the company has won orders worth 274 mw and since January 2009, worth 400 mw. The company is looking to enter new regions this year with a major focus on Latin America and the African continent. It is also eyeing the Middle East and Southeast Asia. In January, Suzlon entered Sri Lanka with an order to supply turbines for a 10 mw windmill. So far, the major driver of Suzlon's business has been the US wind market with revenues of close to $1 billion last year. "This year, the revenue spread is expected to be more broad-based though US will still be the leading market for us," Sinha said. Excluding subsidiaries, Suzlon has a wind turbine manufacturing capacity of close to 4,200 mw, which can be augmented to 5,700 mw if the demand is too high. Currently, the capacity utilisation is nearly half of the installed capacity due to slack demand, he said. The Indian wind energy market has an installed generation capacity of 8,000 mw, which is operating at 25% plant load factor (PLF). The biggest wind power generating country is the US, with an installed capacity of 30,000 mw and China, with 12,000 mw. The total installed capacity the world over is 120,000 mw.