Wind energy major Suzlon Energy aims to double growth by moving into developed markets in Europe, the US and China.
MUMBAI: Wind energy major Suzlon Energy aims to double growth by moving into developed markets in Europe, the US and China.
Announcing the appointment of Andre Horbach as the group’s global chief executive officer, chairman Tulsi Tanti told DNA Money that Suzlon is moving its global management headquarters to Amsterdam, Netherlands and its marketing headquarters to Denmark. “We need to be closer to the market,” Tanti said.
With two major functions moving away from Indian shores, Tanti’s role will increasingly evolve into a supervisory one. India will, however, be the manufacturing hub for Suzlon’s operations, Tanti added. For Suzlon Energy - with its heavy dependence on advanced global markets such as North America, Europe, Australia and now China — it is critical to put up beachheads abroad.
Towards that, Suzlon’s unit Hansen Transmissions International NV will invest Rs 975 crore in setting up a gearbox factory in Coimbatore for supplies to its domestic customers. The unit, capable of making up to 2,000 gearboxes a year, will be operational by December 2008.
The announcement of Horbach’s appointment, Tanti avers, is part of bringing in “a global management bandwidth to Suzlon’s operations.”
So far, Suzlon had a free run in India. But with heavyweights like Reliance ADAG and Essar and global majors like Vestas making a foray into the wind energy sector, the market place is tighter.
Suzlon, meanwhile, is concentrating on overseas orders. As on date, it has an order book of Rs 7,716.24 crore, comprising Rs 1,544.31 crore of domestic orders and Rs 6,171.93 crore of export orders. Its domestic orders can fill up a pipeline for 3-months, whereas overseas orders are for up to 3 years.
But analysts are worried that margins have not kept pace with the sales growth. Suzlon posted a marginal rise of 8.82% in net profit for the quarter ended December 31 at Rs 176.23 crore (Rs 161.94 crore). Total Income increased 30.44% to Rs 1,126.07 crore (Rs 863.24 crore).
“We would like to wait and see a rebound in margins before we decide,” avers Mehul Mukati, of Emkay Share and Stock Brokers.
Tanti is unfazed about the challenges. The market is big enough to accommodate everyone and margins will improve, he says. Analysts tracking the sector are, however, unsure if it has benefited from the overseas focus. But Tanti is convinced margins will go up by a couple of points in 2008-09 on export sales alone.
The Suzlon share dipped 6.40% to Rs 1,204.75 on Monday from Thursday’s close of Rs 1,287.10, a loss of Rs 82.35 per share.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}