OVERVIEW
Founded : 10 April, 1995
Head Quarters : One Earth Campus, Pune, Maharashtra, India
Founder and current
CEO : Mr. Tulsi Tanti
Markets Listed in : BSE, NSE
Products : Wind Turbines
Revenue for 2011-12 : 21,082 Cr Rs.
Gross Profit : 1,670 Cr Rs.
Net Profit : -472.59 Cr. Rs.
No. of employees : 13,000 plus
Total Global Installed Capacity : 19,176 MW
Global Market Share : 7.6%
Global Rank : 5th
The
Suzlon Group is ranked as the world’s fifth largest wind turbine
supplier, in terms of cumulative installed capacity.
The company’s global spread extends across Asia, Australia, Europe,
Africa and North and South America approaching 20,000 MW of wind energy
capacity installed in 28 countries, operations in 33 countries, a
workforce of over 13,000.
ORIGIN And HISTORY
Suzlon is a very western sounding name for an Indian company. The origin
of the name of this wind energy company is very much Indian. ‘Suz’ in
Suzlon, comes from the Gujarati word ‘suz-bhuz’, meaning intelligence
and ‘lon’ — a Gujarati way of pronouncing the English word ‘loan’. The
company was founded by Mr. Tulsi Tanti, a Gujarati businessman from Rajkot.
The story goes that the Tanti family who were into textiles. In the year 1995, the Mr. Tulsi Tanti realised that India's shaky power grid and the rising cost of electricity offset any profits the company would make. After providing electricity for his own company, Tanti realized that other companies in India could also greatly benefit from being sold wind power technology and advised on its use. With the help of some of his friends of Rajkot, he moved into wind energy production as a way to secure the textile company's energy needs, and founded Suzlon Energy. Suzlon adopted a business model wherein clients would be responsible for 25% of the up-front capital investment and Suzlon would arrange the remaining 75% on loan.
So the company conducted their business with lot of ‘suz-bhuz’ and by providing ‘loans’.
MAJOR MANUFACTURING PLANTS
Suzlon has 8 major manufacturing plants in India and 1 in US. They recently sold off their manufacturing plant in china to repay their FCCBs debt.
In India various plants are located at-
Other than that they have a manufacturing plant in Pipestone, Minnesota in the USA. The plant was established in the year 2006 for manufacturing of rotor blades and to send a message that suzlon energy is not an Indian market company but a global company.
Other than that they have a manufacturing plant in Pipestone, Minnesota in the USA. The plant was established in the year 2006 for manufacturing of rotor blades and to send a message that suzlon energy is not an Indian market company but a global company.
VISION
•To be the technology leader in the wind sector
•To be in the top three wind companies in all the key markets
of the world
•To be the global leader in providing profitable, end-to-end
wind power solutions
•To be the 'company of choice' for stakeholders
CORE VALUES
Agility
Creativity
Adding Value
Committed
Integrity
PRODUCTS AND SERVICES
Suzlon offers end-to-end
wind power solutions from assembly, installation to commissioning.
The various other products and their specification offered by Suzlon Energy are:-
| Product Name | Rated power | Cut-in wind speed | Rated wind speed | Cut-off wind speed | Survival wind speed |
| S52-600 kW | 600 KW | 4 m/s | 13 m/s | 25 m/s | 59.5 m/s |
| S64-1.25 MW | 1250 kW | 3.5 m/s | 14 m/s | 25 m/s | 59.5 m/s |
| S66-1.25 MW | 1250 kW | 3 m/s | 14 m/s | 22 m/s | 52.5 m/s |
| S82-1.5 MW | 1500 kW | 4 m/s | 14 m/s | 20 m/s | 52.5 m/s |
| S88-Mark II DFIG | 2250 kW | 4 m/s | 14 m/s | 25 m/s | 52.5 m/s |
| S82-2.1 MW | 2100 kW | 4 m/s | 14 m/s | 25 m/s | 59.5 m/s |
| 9X Suite - 2.1 MW | 2100 kW | 4 m/s | 14 m/s | 20 m/s | 52.5 m/s |
FINANCIAL PERFORMANCE
The financial performance of the company has not been great over the last few years. Although their sales have seen just a slight dip, but the net profits have dropped a lot and have become negative.
Dip in sales can be attributed to the increase in competition, specially from Chinese OEMs and the decreasing growth rate of the industry. Inspite of that Suzlon has maintained its healthy market share and 5th position in the world.
The area of concern is their bottomline. Suzlon in last three years have not been able to show net profits. This is due 2 reasons. Firstly, they have large no. of assets and thus have a high depreciation. Secondly, Suzlon have a large dedt (11,165 Cr Rs by the end of march 2012) on which they are paying high amount of interest.
And not only that, a larger percentage of this debt is going to mature soon for which Suzlon should raise capital.
But things are not as bad as it sounds. There operating profits are steadily rising and they have a huge surplus to cover up the debts. And that is why 11 banks lend money (1500 Cr Rs.) to Suzlon recently when they were required to redeem their FCCBs worth $360 million. But another $210 million worth FCCBs are due for redemption in October.
SWOT ANALYSIS
Strengths
•Integrated Business Model
•End-to-end Solutions
•Vertically Integrated Supply Chain
•Market Leader
•Confidence OF Financing Institutes
•Research & Development
Weakness
•Financial Performance
•High Debt Short Term Liabilities
FFCB
Of $360 mn Matured In June
FFCB
Of $210 mn Maturing In October
•High Inventory Level 5000 Cr Rs
Opportunities
•Steady Growth In Demand CAGR of 7%
•Off-shore Market And Foreign Markets
•Government Policies Favouring Wind Energy
•Environmental Concerns
•High Growth in Asian Markets
Threats
•Slowdown in Demand
•Nuclear Energy
•Chinese OEMs
•Technology Risk
•Shrinking Order Book (2 years only)
•Competitors Increasing Capacities
•Dipping Share Price
RECOMMENDATIONS
•Investment in R
& D
•Reduction of
Inventory Levels
•Concentrate on
Off-Shore markets
•Synergies with RE
Power
•Focus on Indian And
Chinese Markets
•Passing on benefits
of vertical integration to costumers
•Diversification
into other renewable energy
Solar Power
Bio-Mass
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