Changes

Suzlon Energy

7,933 bytes added, 11:16, 11 May 2011
/* Strategic Position */
'''Summary'''
*Largest wind turbine manufacturer in Asia and the 3rd largest worldwide (Suzlon + RE Power)
*End-to-end wind power solutions from assembly, installation to commissioning. The company manufactures blades and generators
*Suzlon was founded by Tulsi Tanti in 1995
*Suzlon operates the largest wind park in the world, the 584 MW wind park in the Western Ghats-Tamil Nadu, India
*Planning to acquire remaining 9% stake in Repower
<br>
==Company Overview==
Suzlon Energy (Suzlon) is engaged in the manufacture and sale of wind turbine generators (WTGs) and components. It provides various wind energy solutions including wind resource mapping, site identification and development, installation, operation, and maintenance services. The company has operations across Americas, Asia, Australia, and Europe. It is headquartered in Pune, India and employs about 16,000 people.
The company recorded revenues of INR206, 196.6 million ($4,330.1 million) during the financial year ended March 2010 (FY2010), a decrease of 20.9% compared to FY2009. The operating profit of the company was INR6, 125 million ($128.6 million) during FY2010, a decrease of 77% compared to FY2009. The net loss was INR9, 825.6 million ($206.3 million) in FY2010, compared to a net profit of INR2, 364.8 million ($49.6 million) in FY2009.
*<br><br>===Key Facts===<br>
{|border="2" cellspacing="0" cellpadding="4" width="9555%" align="center"|align = "center" bgcolor = "#CCCCFF538ED5"|<font color="#000000">'''Head Office'''</font>
|One Earth , Opp. Magarpatta City<br>Hadapsar<br>Pune 411 028<br>India
|-
|align = "center" bgcolor = "#CCCCFF538ED5"|<font color="#000000">'''Phone'''</font>
|91 20 4012 2000
|-
|align = "center" bgcolor = "#CCCCFF538ED5"|<font color="#000000">'''Fax'''</font>
|91 20 4012 2100
|-
|align = "center" bgcolor = "#CCCCFF538ED5"|<font color="#000000">'''Web Address'''</font>
|[http://www.suzlon.com/ http://www.suzlon.com]
|-
|align = "center" bgcolor = "#CCCCFF538ED5"|<font color="#000000">'''<nowiki> </nowiki> Employees'''</font>
|16000
|-
|align = "center" bgcolor = "#CCCCFF538ED5"|<font color="#000000">'''Turnover (US $M)'''</font>
|4330
|-
|align = "center" bgcolor = "#CCCCFF538ED5"|<font color="#000000">'''Financial Year End'''</font>
|March
|-
|}
===Key Financials=== [[Image:Suzlon1.jpg|thumb|center|600*400 px]] <br> Source: [http://www.ismcapital.com/images/news/ISM%20Capital_Suzlon_Tilting%20at%20Windmills.pdf IMS Capital Report]===Revenue Distribution=== The following table gives the geographical break-up of revenue distribution of Suzlon Wind Turbine Generator (not Suzlon Group) for the year 2010:<br> {|border="2" cellspacing="0" cellpadding="4" width="50%" align="center"|align = "center" bgcolor = "#538ED5"|'''Geography'''|align = "center" bgcolor = "#538ED5"|'''Revenue (INR Crore)'''|align = "center" bgcolor = "#538ED5"|'''% of Total Revenue'''|-|India|align = "center"|4,094|align = "center"|42%|- |USA|align = "center"|2,483|align = "center"|26%|-|China|align = "center"|813|align = "center"|8%|-|ANZ|align = "center"|1,192|align = "center"|12%|-|Europe & ROW|align = "center"|1053|align = "center"|11%|-|'''Total'''|align = "center"|'''9,635'''|align = "center"|'''100%'''|-|}  <br> ==Business DescriptionOverview==
Suzlon's wind energy business traces its roots back to the incorporation of Suzlon Energy Limited in 1995 by the venture of Mr. Tulsi R. Tanti. The company along with its subsidiaries engages in designing, developing and manufacturing of wind turbine generators and related components such as rotor blades, control panels, nacelle cover, tubular towers, generators and gearboxes. Further, the company also provides consultancy, design, manufacturing, installation, operation and maintenance services as well as is involved in wind resource mapping, identification of suitable sites and technical planning of wind power projects. The company principally operates in India, China, The Americas, Europe, New Zealand, South Korea, South Africa and Australia. <br>
The company has forged ahead with an ethos of innovation in everything that it does. This has led to pioneering approaches and offerings such as a fully vertically-integrated value chain, leveraging local expertise and global experience, an 'end-to-end solutions' model and highly customized products – all contributing to make Suzlon the highest-growth, highest-margin wind turbine maker in a highly competitive environment. Suzlon's design, manufacture, operations and maintenance services have been certified as ISO 9001:2000 by Det Norske Veritas. It has a strong presence in the BSE as well as a part of S&P CNX Nifty Index (NSE) that shows investors’ satisfaction towards the company and the stability of its stock in the financial market.
===Product & Services===
'''Product Portfolio'''
*Wind Turbine Generator, Low to Medium capacity (350 kW – 2.1 MW)
*Operation & Maintenance Services
===Geographic Presence===
[[Image:Location.jpg|900px|center]]
==Key Executives=Organization Structure===[[Image:Org chart1.png|center|thumb|1000 px]]<br> ===Mergers & Acquisitions==={|border="2" cellspacing="0" cellpadding="4" width="10075%" align="center"|bgcolor align = "#CCCCFFcenter"|<font colorbgcolor ="#000000538ED5">|'''NameAcquisitions'''</font>|align = "center" bgcolor = "#CCCCFF538ED5"|<font color'''Disinvestments'''|align = "center" bgcolor ="#000000538ED5">|'''TitleSubsidiary M&A'''</font>
|-
|Tulsi Tanti* SE Forge (Oct 2010)<br>* RE Power Systems (Dec 2009)<br>* RE Power Systems AG (Jun 2009)<br>* RE Power Systems AG (Jun 2008)<br>* RE Power Systems AG (Jun 2007)|Founder, Chairman, Managing Director, Chairman * RE Power Systems (Aug 2010)<br>* Swibi AG (Jun 2010)<br>* Hansen Transmissions (Apr 2009)<br>* Denker & Wulf AG-Quitzow Wind (Mar 2009)<br>* Hansen Transmissions (Jan 2009)<br>* SE Forge (Oct 2008)|* RE Power Systems AG acquired PROASEGO Wind Park (May 2010)<br>* RE Power Systems Swiz acquired stake in Wind farm Corleto Perticara (Aug 2010)<br>* AE-Rotor Techniek of Employees Stock Option Plan Committeethe Netherlands acquired Eve Holding NV, Chairman of Securities Issue Committee and Member a manufacturer of Investors Grievance Committeewind turbines (Mar 2006)
|-
|Robin Banerjee}<br> ===Order Book==={|border="2" cellspacing="0" cellpadding="4" width="44%" align = "center"|align = "center" bgcolor = "#538ED5"|'''Region'''|align = "center" bgcolor = "#538ED5"|Chief Financial Officer'''Orders as on 04/02/11'''
|-
|Andris CukursIndia|Chief Executive Officer of USAalign = "right"|1,624
|-
|Dan Kofoed HansenUSA|Chief Executive Officer of Australia & New Zealand and Vice President of Sales & Marketing - Asia Pacificalign = "right"|246
|-
|Per Hornung PedersenChina|Chief Executive Officer of Europealign = "right"|324
|-
|Silas ZimuANZ|Chief Executive Officer of South African Operationsalign = "right"|4
|-
|Ashok D'SaEurope|President of India South Asia and Middle Eastalign = "right"|162
|-
|Arvind MathewSouth America|President of Nacelle Manufacturingalign = "right"|218
|-
|Nilesh VaishnavOthers|President of Bladesalign = "right"|NA|-|'''Total'''|align = "right"|'''2,578 MW'''
|-
|}
<br>'''Biography of Tulsi TantiSource: Factiva News Articles, Analyst Reports'''<br>Tulsi Tanti is from Gujarat, India where he started his first venture which was in textiles but he found the prospects stunted due to infrastructural bottlenecks. The biggest of them all was the cost and unavailability of power, which formed a high proportion of operating expenses of textile industry. In 1990, he invested in two wind turbine and realized their huge potential. In 1995, he formed Suzlon and gradually quit textiles. This is how he set out on a new path.The $10 billion Suzlon Energy is his wind power based company that has expanded its operations into various parts of the globe. With this successful venture, Tanti is amongst the ten richest Indians and one of the most successful entrepreneurs in Asian region. With a net worth of $5.9 billion, he is the chairman and managing director of Suzlon energy. Tanti owns 70% of the company with his three siblings.
<br>
==Investment History=Client Base in Key Markets=[[Image:Investment Details.jpg|700px|center]]<br> ==Order Book==[[Image:order book.jpg|center]]==SWOT Analysis==
{|border="2" cellspacing="0" cellpadding="4" width="100%"
|align = "center" bgcolor = "#CCCCFF538ED5"|<font color'''India'''|align = "center" bgcolor ="#000000538ED5">|'''StrengthsUSA'''</font>|align = "center" bgcolor = "#CCCCFF538ED5"|<font color'''China'''|align = "center" bgcolor ="#000000538ED5">|'''WeaknessesAustralia/NewZealand'''|align = "center" bgcolor = "#538ED5"|'''Europe & South America'''</font>
|-
|1. Integrated business modelTata Power<br>2. In house technology and design capabilitiesBajaj Auto<br>3. Market leadership in India and global presenceEssel Mining<br>4. Prudent acquisitions and alliancesMSPL<br>5. Global productionONGC|John Deere Credit<br>6. Pricing powerEdison Mission Group<br>7. Diversified product linePPM Energy<br>Horizon Wind<br>Duke Energy|1. Operational riskHuaneng Shandong<br>2. Growth in assets diminishing growth in profitsGuohua<br>3. Unsupportive stock pricesDatang<br>4. Unfavorable ratingsHoniton<br>5. Improper working capital managementJingneng<br>6North Union Power|Australia Gas & Light<br>TrustPower<br>Renewable Power Ventures <br>Pacific Hydro|SIIF Energies do Brasil Ltda (SIIF)<br>Servtec Instalacoses<br>NeoAnemos Srl<br>Techneira S. Weak strategic financial managementA.<br>Energi Kontoret<br>Martifer Energy Systems<br>Iniciativas Energetitas<br>Eólia Renovables group<br>Spanish Savings Bank Unicaja<br>Ayen Enerji
|-
|}'''Source: BTM Consult''' <br> ==Market Overview=====Market Share===[[Image:Market Position1.jpg|600px|center]](*Suzlon 6.9% plus RE Power 2%)<br>'''Source:BTM Consult'''<br>*Market Share of Suzlon Wind Energy for 3 years from different sources (Excluding RE Power){|border="2" cellspacing="0" cellpadding="4" width="47%" align = "center"|align = "center" bgcolor = "#CCCCFF538ED5"|<font color'''Source'''|align = "center" bgcolor ="#000000538ED5">|'''Opportunities2010'''</font>|align = "center" bgcolor = "#CCCCFF538ED5"|<font color'''2009'''|align = "center" bgcolor ="#000000538ED5">|'''Threats2008'''</font>
|-
|1'''BTM Consult'''|align = "center"|6. Environmental awareness<br>29%|align = "center"|6. Government initiatives<br>3. Untapped offshore market<br>4. Steady growth in demand<br>%|align = "center"|7%|-|'''Make Consulting'''|align = "center"|6%|align = "center"|5. Vast coastlines of India and low cost8%|1. Intense competition<br>2. Foreign exchange risk<br>3. Technology risk<br>4. Objections to wind power<br>align = "center"|7%
|-
|}
 
==Competition==
===Market Position===
Suzlon is the 3rd largest Wind Turbine Generator manufacturer with a 9.8% share in 2009.
<br>
[[Image:Market Position.jpg|900px|center]]
(*Suzlon 6.4% plus RE Power 3.4%)
''Source:BTM Consult''
<br><br>
 
===Share by Geography===
*'''India'''
Suzlon is the dominant provider in India, with a 50% market share in 2009. Enercon and Vestas have aggressively
targeted the Indian market over the past 3 years, in part driven by the slowdown in developed markets. Suzlon has maintained
land bank of premium sites is an important barrier to entry.
<br><br>
*'''Brazil'''
Suzlon is market leader in Brazil with a 50% share. ''Source:MAKE Consulting Report''
<br><br>
*'''China'''
Chinese providers (Sinovel, Goldwind and DongFang Electric) are expected to continue to dominate the Chinese market. Suzlon
has launched a price competitive product to compete with local players. A small market share would have a material impact on
outside China is minimal, held back by the perception that they produce low price, but low quality turbines.
<br><br>
===Competitive Advantage===
Integration is a key advantage for Suzlon, setting it apart from most of its competitors. This helps to maintain quality standards
and compatibility and is particularly important for gearboxes. Suzlon remains the dominant shareholder in Hansen and the two
companies have long term supply agreements in place. Hansen is also developing a customised gearbox for RePower. If Suzlon
sells its stake in Hansen, some of this advantage may be eroded.<br>[[Image:Competitive advantage.jpg|center]] '''Source:Analyst Reports'''<br> ===Strategic Position===[[Image:Strategic position1.jpg|center]]'''Source:Analyst Reports''' ===SWOT Analysis==={|border="2" cellspacing="0" cellpadding="4" width="55%" align = "center"|align = "center" bgcolor = "#538ED5"|<font color="#000000">'''Strengths'''</font>|align = "center" bgcolor = "#538ED5"|<font color="#000000">'''Weaknesses'''</font>|-|1. Integrated business model<br>2. In house technology and design capabilities<br>3. Market leadership in India and global presence<br>4. Prudent acquisitions and alliances<br>5. Global production<br>6. Pricing power<br>7. Diversified product line|1. Operational risk<br>2. Growth in assets diminishing growth in profits<br>3. Unsupportive stock prices<br>4. Unfavorable ratings<br>5. Improper working capital management<br>6. Weak strategic financial management<br>|-|align = "center" bgcolor = "#538ED5"|<font color="#000000">'''Opportunities'''</font>|align = "center" bgcolor = "#538ED5"|<font color="#000000">'''Threats'''</font>|-|1. Environmental awareness<br>2. Government initiatives<br>3. Untapped offshore market<br>4. Steady growth in demand<br>5. Vast coastlines of India and low cost|1. Intense competition<br>2. Foreign exchange risk<br>3. Technology risk<br>4. Objections to wind power<br>|-|} ==Recent Developments=={|border="2" cellspacing="0" cellpadding="4" width="90%" align = "center"|align = "center" bgcolor = "#538ED5"|'''S.No'''|align = "center" bgcolor = "#538ED5"|'''Date'''|align = "center" bgcolor = "#538ED5"|'''Details'''|align = "center" bgcolor = "#538ED5"|'''Source'''|-|align = "center"|1|align = "center"|23rd April<nowiki>’</nowiki>11|'''Suzlon '''has announced the signing of an order with Gujarat State Fertilizers & Chemicals (GSFC) to set up, operate and maintain wind energy projects totaling to 50.4 MW in Gujarat.The projects, utilising 24 units of Suzlon<nowiki>’</nowiki>s S88-2.1 MW wind turbine, will be set up in wind farms operated by Suzlon in the Rajkot and Surendranagar districts of Gujarat. This is GSFC<nowiki>’</nowiki>s fifth order with Suzlon and is scheduled for completion and commissioning by September 2011.|align = "center"|ProQuest|-|align = "center"|2|align = "center"|9th April<nowiki>’</nowiki>11|Recently, '''Suzlon Energy''', India<nowiki>’</nowiki>s leader in wind energy launched a new range of large capacity wind turbine machines suitable for low wind speeds. It has also raised its stake in Repower Systems AG to 95.16% from earlier 91%. The company will initiate a <nowiki>’</nowiki>squeeze out procedure<nowiki>’</nowiki> of minority shareholders so that Repower becomes a wholly owned subsidiary.|align = "center"|ProQuest|-|align = "center"|3|align = "center"|6th April<nowiki>’</nowiki>11|'''Suzlon Energy''', through its subsidiary, would have full control over the off-shore wind equipment specialist Repower, thus enabling access to the German player<nowiki>’</nowiki>s portfolio of products and more importantly technology. Added to it, the reasonably rich cash status of REpower and its minimal debt balance sheet could be more effectively utilised by Suzlon. This was not possible earlier, with Suzlon holding a less than 100 per cent stake.|align = "center"|Business Line|-|align = "center"|4|align = "center"|5th,April <nowiki>’</nowiki>11|Massive, new natural-gas discoveries in the U.S. slashed the price of the fuel that wind competes most directly against. And the recession slowed demand for new power plants of any kind, leading more politicians to question renewables subsidies. Congress has declined so far to pass a renewable-energy requirement. Some major wind-turbine makers are cutting production at some factories. More than a year ago, '''Suzlon Energy Ltd.''', an Indian company that is one of the world<nowiki>’</nowiki>s biggest wind-turbine makers, began laying off workers at its plant in Pipestone, Minn., which makes blades for turbines; the plant now is operating at just one-third of its capacity, says Tulsi Tanti, the company<nowiki>’</nowiki>s chief executive. Given the lack of a nation-wide renewables mandate, he says, Suzlon also has postponed plans to build another U.S. factory, in Texas.|align = "center"|Factiva|-|}<br> ==Key Insights=='''Support from Government of India'''<br>The Indian government has enacted legislation giving a tax break for investments in renewable energy twice in the last five years giving a significant boost to Suzlon as it has a 50% market share in India.<br><br>'''Rejection of Wind Turbine Blades'''<br>Suzlon has faced the problem of continuous rejection of wind turbine blades and it resulted in the following:*Shares dropped 19% because of china issue*Shares dropped 84% last year because of US issue*Spends $100M to fix cracked-blade problem<br>'''Debt Problem'''Suzlon currently has net debt of USD 2.05bn and faces a heavy debt repayment schedule beginning in FY2013.*Monetized 35.22% stake in Hansen Transmissions*Realized GBP 224 million through placement of 236 million depository interests at a price of 95 pence per depository interest<br>'''R&D and NPD Outlook'''*Suzlon has doubled its R&D expenditure*Introduced 2 new products*Extensive research in setting up wind mills in forested area<br>'''Repeat Orders in India'''*Gujarat State Petronet Ltd.*Rajasthan State Miners & Minerals Ltd.*Gujarat Alkalies and Chemicals Ltd.*State Bank of India*Gas Authority of India<br> ==Key Executives=={|border="2" cellspacing="0" cellpadding="4" width="70%" align="center"|bgcolor = "#538ED5" align = "center"|<font color="#000000">'''Name'''</font>|bgcolor = "#538ED5" align = "center"|<font color="#000000">'''Designation'''</font>|-|Tulsi Tanti|Founder, Chairman, Managing Director, Chairman of Employees Stock Option Plan Committee, Chairman of Securities Issue Committee and Member of Investors Grievance Committee|-|Robin Banerjee|Chief Financial Officer|-|Andris Cukurs|Chief Executive Officer of USA|-|Dan Kofoed Hansen|Chief Executive Officer of Australia & New Zealand and Vice President of Sales & Marketing - Asia Pacific|-|Per Hornung Pedersen|Chief Executive Officer of Europe|-|Silas Zimu|Chief Executive Officer of South African Operations|-|Ashok D'Sa|President of India South Asia and Middle East|-|Arvind Mathew|President of Nacelle Manufacturing|-|Nilesh Vaishnav|President of Blades|-|}<br> *'''Biography of CMD, Tulsi Tanti'''**Tulsi Tanti is from Gujarat, India where he started his first venture which was in textiles but he found the prospects stunted due to infrastructural bottlenecks. The biggest of them all was the cost and unavailability of power, which formed a high proportion of operating expenses of textile industry. In 1990, he invested in two wind turbine and realized their huge potential. In 1995, he formed Suzlon and gradually quit textiles. This is how he set out on a new path.**The $10 billion Suzlon Energy is his wind power based company that has expanded its operations into various parts of the globe. With this successful venture, Tanti is amongst the ten richest Indians and one of the most successful entrepreneurs in Asian region. With a net worth of $5.9 billion, he is the chairman and managing director of Suzlon energy. Tanti owns 70% of the company with his three siblings.
<br>
===Competencies===
[[Image:Competencies.jpg|center]]