What started off as an initiative to meet his own demand for energy to run his textile plants has now resulted in the world’s fifth largest wind power equipment company with revenues of $ 3.2 billion and market share of 10.5%. So what led to this tectonic shift and resulted in one of the world’s best energy company? Let us have a look.
HISTORY: It was the early nineties and India was just opening up. A Gujarati businessman by name Mr. Tulsi Tanti was running his textile business. He had been facing a frequent problem, the infrequent supply of electricity for his textile plant. It was hitting his business hard, so he decided to setup two wind turbine generators at his site to cater to the energy demands. Many regarded this as a foolhardy step where the capital for setup was more than the textile business itself. But he had his sights on more than the immediate, having already seen the potential of wind power and the global opportunities in the field. Moving quickly, he set forth to acquire the basic technology and expertise to set up Suzlon Energy Limited – India’s first home-grown wind technology company. Suzlon began with a wind farm project in the Gujarat state of India in 1995 with a capacity of just 3 MW and has, at the end of 2007, supplied over 7,500 MW world over. Suzlon has grown more than 100% annually and registered a 108% growth, in the financial year ended 2007 – over twice the industry average – in a supply restricted environment. Today Suzlon is being ranked the 5th leading wind power equipment manufacturer with a global market share of 10.5%. The company seized market leadership in India over 8 years ago, and has consistently maintained over 50% market share, installing over 3,000 MW of wind turbine capacity in the country.
CORE COMPETENCY: So what is Suzlon’ core competency is not tough to guess, the question is how it’s focusing on it? Suzlon over the year (13 years to be precise, setup in 1995) has grown leaps and bounds, to become a complete end-to-end company. The company creates demands for its customers by providing comprehensive business solutions by infrastructure development and converting potential windy sites into profitable business measured in the net output kilo-watt hour.
Complete integration of backward supply chain, through this approach Suzlon has developed comprehensive manufacturing capabilities for all critical components in their wind turbines. This provides the company with quality control, assurance of supply and economic sales.
Research and Development: Suzlon’s R&D strategy lays key emphasis on a lower cost for every kilowatt-hour generated through technological competent products making technology the central objective. For this Suzlon has set foot outside India and has R&D centers in Netherlands and Germany. This brings expertise from the best all over the world.
Markets: Following a truly global approach Suzlon has moved from traditional markets to the new emerging markets. It is basically targeting the Asian and the American markets; it has expanded its business in Australia, Brazil, China, Italy, Portugal, Turkey and United States. To be looking at the figures, Suzlon is the fifth largest in the world right now, with a market share of 10.5%, Vestas the world’s largest player in the segment is 13.6%. Apart from this Suzlon has been creating a great market for itself in China and has already captured an 8% share there.
- Suzlon is also developing the biggest wind field in Dhule district of Maharashtra, India. The current capacity is around 650 MW. With an additional capacity of 450 MW, net output wattage will be 1000 MW, making it the biggest in the world.
- In addition to this, Suzlon’s wind farm located in Sanganeri in the state of Tamil Nadu in India, has planned for a capacity of over 500 MW and is home to over 250 wind turbines with a total of 350 MW of installed capacity presently.
- Suzlon has made an entry into the state of Kerala, in southern India, as well.
- Suzlon’s customers in USA currently include Edison Mission Group (EMG) in Irvine, California where EMG holds more than 1000 MW of wind turbine capacity. Another high profile customer John Deere Wind Energy (JDWE) has projects in Minnesota, Texas and recently in Missouri with a turbine portfolio from Suzlon that exceeds 530 MW in capacity.
- Suzlon, under its contract with AGL (Australian Gas Light Company) for 95 megawatts of wind turbine capacity, is setting up a wind farm in rural South Australia. The facility is located in Hallett, 220 kilometers north of Adelaide.
- Suzlon crossed a major milestone in Europe, the world’s largest and most competitive wind market, by completing the commissioning and mechanical erection of turbines installed at its Penamacor projects. The projects cover 39.9 MW of wind turbine capacity with TECNEIRA – Tecnologias Energéticas, SA for two wind farm projects in the Penamacor region of Portugal.
Suzlon’s Clients: Primary customers in India include companies that have manufacturing facilities with high power consumption. These companies have high profitability and seek investment opportunities with stable returns. In India, Suzlon caters to leading corporate houses like the MSPL Limited, Bajaj Auto Limited, Tata Group and Reliance, to name a few. Among others include the ones mentioned in the section under wind farms.
Manufacturing and R&D Sites: Suzlon emphasizes innovation at the core of all its activities, and nowhere is this more evident than the Research & Development effort. The company has developed a comprehensive range of wind turbine models ranging from 350 kW to 2.1 MW, with customized versions for deployment in a variety of climes ranging from hot, dry deserts to humid coasts, to near-freezing plains. Suzlon has driven a focused effort to make wind turbines more reliable, consistently delivering availability rates beating global standards, higher than 95% on an average. The Suzlon R&D effort is working towards lowering the end-cost of power from wind, in cost-per-kW/h terms – leading towards making wind an increasingly viable, competitive part of the global energy matrix. To drive this development effort, Suzlon has – again – chosen an innovative approach: leveraging the core strengths and experience of different places and people to build a global team dedicated to developing world leading technology. Suzlon has established dedicated centers for gearbox technology in Belgium, technology innovation in Denmark, process engineering in India, aerodynamic development in the Netherlands, and composite wind turbine technology in Germany. These centers of R&D, Innovation and Knowledge Management have been carefully located to leverage local expertise, such as the leadership of certain European countries in different aspects of wind power technology, alongside India’s expertise in IT systems and process engineering and innovative technology application. Suzlon has headquartered its R&D effort in its new Global Technology Center in Hamburg, Germany, enabling a centrally coordinated R&D effort, while allowing for technical collaboration with leading technical universities and institutions in Germany, and further afield.
SUZLON – A HUMAN FACE: Apart from serving the business community by setting up wind turbines for power generation which is cost effective. The company is also contributing to a greener world through initiatives in terms of setting up wind farms to generate energy through non conventional and clean sources. It has also taken initiatives on the human front by taking up multiple steps to promote local business, education and health system in India. Few are:
- Suzlon Energy Limited (SEL), through its subsidiary Suzlon Wind farm Services, undertook a major new Corporate Social Responsibility (CSR) initiative, in the beginning of April ‘07, by launching a partnership with the Kutch Nav Nirman Abhiyan (KNNA). Suzlon has partnered with KNNA to gain support for an operational CSR framework for proactive development. The KNNA is a network of multi sectoral institutions with its expertise areas of community development and sustainable disaster mitigation / management. With its primary focus as Kutch as a model of district development, KNNA also demonstrates good practices of community empowerment and disaster management within the country and outside The first project, organized through ‘Khamir’ – a local NGO, will focus on creating employment in the rural area by leveraging locally available skills. This project named the ‘Dutch Kutch Design Exchange Program’, will be run in partnership with the Einhoven Institute of Design, Netherlands, and Dastkar, Delhi. The focus is on developing local crafts to enable the artisans to create marketable products and access better markets in India and abroad. The program will also assist in developing designs with a strong brand identity, specifically in sectors of weaving, block printing, leather, silver and bell metal. Suzlon will support this initiative with amount of INR 3 lakh, in the first year.
- The second project organized by Bhojay Sarvodaya Trust, will focus on health and sanitation services in the villages of Abdasa and Mandvi. Approximately INR 4 lakhs will be contributed by Suzlon for the effort. Under this project, the Bhojay Sarvodaya Trust will organize eye, dental, general surgery, ENT and gynecology camps free of cost across the project villages. The project will coordinate doctors and surgeons for providing care at the village centers, distribute preventive medicines, and also run awareness campaigns in the region.
- The third activity focuses on our Vision of powering a greener tomorrow at our forthcoming corporate facility at Hadapsar, Pune. There are several ways in which buildings can be made more energy efficient, environmentally friendly, pollution free and socially uplifting. Measures to achieve these objectives are including the usage of solar water heating, using other renewable energy sources, energy efficient lighting, maximum use of natural ventilation, building design to suit convenience of disabled persons, water recycling and moving from a typical office environment to an environment that encourages creativity and team work. These steps have been taken by Suzlon to make this vision a reality.