Milching the Winds: The Suzlon Way
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Milching the Winds: The Suzlon Way
Dr. Kishor B. Barad
Dr. Vrajlal K. Sapovadia
Introduction:
Suzlon Energy Limited is an Indian company enabling the world to harness the wind energy, one
of the major sources of sustainable renewable energy. Suzlon along with its subsidiaries is
engaged in designing, developing and manufacturing of wind turbine generators (WTGs) and
related components required for generating electricity from the winds. Presently 85% of the
world’s energy requirement is fulfilled by fossil fuels, a non-renewable source. Coal, crude oil
and natural gas are prominent sources of fossil fuels. The pace of exploration and consumption
of fossil fuels currently is extremely high and thus the inventories of these fuels is also depleting
at a faster rate. It would take millions of years to restore the fossil fuels that have been consumed
and thus renewable energy could be universal panacea for providing energy security to the
world. Greatest advantage of using renewable energy is that they do not emit hazardous
substances and pollute the environment. As we know that renewable energy is a natural source
and thus it can replenish itself naturally within the shortest possible time. Renewable energy
emanates from solar power, wind, flowing water, geothermal energy and so forth and these
sources could be tapped with appropriate technology for commercial use.
Suzlon Energy Limited was founded by Mr. Tulsi Tanti; the idea of renewable energy business
struck him while he was searching for a solution to the electricity crises for his textile business.
The promoters of Suzlon leashed out their business acumen and entrepreneur’s skills on one
hand and on the other, proved to the world, especially Indian Energy Industry that blowing winds
can also be converted into profits and build a business of billion dollars out of it. The case is all
about Mr. Tulsi Tanti’s foresight, vision and his zeal to strive for social, economic and
environmental sustainability. Suzlon, the fourth-largest maker of wind turbines in the world
contribute 30% of global wind turbine business with annual turnover of ` 6, 1642.20 million
(March 2010).
Wind Energy:
Wind energy is one of the prominent sources of renewable electricity. It is rapidly becoming a
global business, spreading its wings beyond its original markets of European countries, India and
1
Electronic copy available at: http://ssrn.com/abstract=1725640the United States. Wind power is one of the cleanest energy and can be generated with zero
percent emission of global warming gases. The global wind power industry has tremendous
economic and business potential. Amongst all other renewable energy sources, wind energy is
one of the most viable sources because of the availability of technology, which makes it
economically feasible and ideal for large scale power generation. It is quick to install and will
save billions of tonnes of CO2 by 2020. Wind energy makes sound economic sense too. The cost
of fuel needed for generating electricity over the total lifespan of a wind turbine is zero. This
takes away a substantial part of the investor’s risk. At many sites, wind power is already
competitive with new-built conventional technologies and in some cases it is much cheaper.
When taking into account the price of carbon, wind power is even attractive. Job creation and
regional economic development are also key factors in economic considerations surrounding
wind power. It employs around 2 lakh people, has an annual turnover of more than US$ 23
billion and is growing at an annual rate of more than 28% for the last 10 years. It fulfills the
electricity needs of more than 25 million households. Europe is a major player in wind energy
and accounts for 65% of total installed capacity. About 1 lakh wind turbines of varying
capacities has been installed in 70 countries to generate more than 74,000 megawatt of electric
power. Today, wind energy has unquestionably emerged as the second largest renewable energy
source, behind hydro-electric power. It is currently being harnessed by almost 70 countries of
which 19 countries have already installed more than 100 MW each in 2007. Installed wind
energy had touched 94 GW in the same year. By 2016 this is expected to touch a phenomenal
455 GW. It is estimated that the world wind marketplace will continue to grow at over 2o% till
past 2012.
Introduction to Suzlon Energy Ltd:
Suzlon Energy Limited is a Pune (Maharashtra) based Indian company specialized in the
business of manufacturing and supplying wind turbine generators, used for generating electricity
from the wind energy. The company along with its subsidiaries is engaged 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. The company
also provides consultancy for design, manufacturing, installation, operation and maintenance of
wind farms. It is also involved in wind resource mapping, identification of suitable sites and
2
Electronic copy available at: http://ssrn.com/abstract=1725640technical planning of wind power projects. The company is currently ranked as the third largest
wind turbine manufacturer in the world, with a global market share of 9.8 %. The company has
globally so far supplied wind turbines to generate 8,000 MW of electricity and has installed
projects to generate more than 4,800 MW of electricity based on wind energy. It is the largest
wind turbine manufacturing company in Asia and its operations are spread across fifteen
countries and five continents.
Background Note:
Suzlon is a large sized widely held company which was formally incorporated on 10th April 1995
with initial Authorised Capital of INR 4,450 million under Indian Company Act 1956. The paid
up equity share capital of the company as on 31st March 2010 was INR 3113.5 million and
revenue turnover was INR 207.79 billion. The company came up with a public offer of 29.34
million equity shares of INR 10 each in the price band of INR 425 to INR 510 per equity share of
face value INR 10 in September 2005. The equity of the company is listed in India on Bombay
Stock Exchange, Mumbai (BSE) and National Stock Exchange, Mumbai (NSE), part of S&P
CNX Nifty Index, and FCCB listed in Singapore. The company has registered 100% year-on-
year growth for the past five consecutive years, achieving leadership in India and then becoming
the leader on the global stage. Suzlon has a strong workforce of 14,000 people working across
twenty one countries. It has consistently grown at a rate faster than the industry, more than twice
the industry average over the past four years.
Genesis of Suzlon:
The seeds of Suzlon had been sowed by Mr. Tulsi Tanti, a Guajarati entrepreneur who was
associated with textile industry in the year 1995. The textile business of Mr. Tanti in 1995 was
facing dual problem of rising electricity cost on one hand and infrequent power supply by the
state run electricity board on the other. In search of a solution to the dual problems of Mr. Tanti’s
textile business, the idea of generating power from wind was conceived to him. To meet the
power requirements of his textile business, Mr. Tanti for the first time set up a wind farm to
generate 3 mega watt of electricity in the state of Gujarat with a workforce of twenty people.
This development laid the foundation stone of Suzlon Energy Limited India’s first indigenous
wind technology company and the rest is history. The first subscribers to the memorandum of the
3company were the family members and friends of Mr. Tulsi Tanti. Over the years Mr. Tanti
mastered the expertise of wind turbine technology and the art of milching the winds.
Vision:
Its vision is,
§ To be a technology leader in the wind industry
§ To be among the top three wind energy companies in the world
§ To be the most respected brand
§ To be the best team and place to work at
§ To be the fastest growing and most profitable business
Mission:
§ To contribute to sustainable development of Wind Energy sector through an integrated
product design and manufacturing strategy
§ To increase contribution of wind power to meet global energy demand
§ To create a better, greener tomorrow for all
Business Overview:
Suzlon Energy Ltd. develops and manufactures technologically advanced WTGs with an
emphasis on high performance and cost-efficient WTGs. Along with its associate companies
(Refer Annexure I) in the group; company has positioned itself as an integrated solution provider
of services related to wind energy in the global markets. Company also provides after-sale O&M
(operations & maintenance) services for WTGs supplied by it. The associate companies of
Suzlon acquire sites identified by it found suitable for wind energy projects, which are then sold
or leased to its customers, and undertakes the technical implementation of wind farms, including
infrastructure development, supply and installation of WTGs and connection to power grids.
Business Philosophy:
The company operates with the following business philosophy:-
§ Suzlon envisages being a company that serves society with sustainable wind-power on a
commercial scale with a focus on continuously increasing efficiency and reliability of its
wind turbines.
4§ To always be committed to a life-long relationship with customers and work towards
total customer satisfaction.
§ To lay importance on bettering its quality, safety and environmental standards.
§ To build partnerships with all stakeholders; employees, customers, vendors, service
providers, local communities and governments.
§ To conduct business with the highest standards of ethics.
§ To contribute to the reduction of use of fossil fuels by reducing its carbon footprint in all
its operations.
Operations Management:
The manufacturing operations of the company are completely integrated with focus on
designing, engineering and development of WTGs. Suzlon’s vertical integration has been its
success driver. The supply chain of the company is fully integrated with manufacturing facilities
spread across three continents. Suzlon started its journey with a vision to develop leading edge
technology and build manufacturing capability for all key components in the wind power
domain. The Wind Industry’s supply chain experiences the critical bottleneck of a long
production lead time for key components such as bearings, gearboxes, forged parts and
components etc. However, Suzlon has managed to gain the competitive advantage with better
control over time, cost, quality, long-term customer service support and integration of turbine
technology for shorter production cycles. The different components of WTGs like rotor blades,
tubular towers, control panels and nacelle are designed developed and manufactured in-house.
The tubular tower manufacturing activities of the company is carried out through its 75% owned
subsidiary company, Suzlon Structures. Some of the components that the company is not
manufacturing are outsourced from its leading suppliers and vendors.
Manufacturing of WTGs is undertaken by Suzlon Energy Limited and after-sale O&M services
are provided by its wholly-owned subsidiary Suzlon Windfarm Services Ltd (SWSL). The
company has also made arrangements with its associate companies and some other companies
for site procurement. These companies procure sites in India that have been identified by Suzlon
as suitable for WTG installation. Another associate company, Suzlon Infrastructure Ltd (SIL)
undertakes the project execution work, including site development, civil works and electrical
works, as well as erection and commissioning of WTGs and construction of power evacuation
5facilities. Suzlon’s associate companies provide necessary and valuable services in relation to its
activities in the Indian wind energy market. While Suzlon works closely with its associate
companies, it does not have any equity interest in its associate companies. All the associate
companies are controlled by its promoters (Refer Annexure IV). Suzlon Energy Ltd is highly
dependent on its associate companies in providing integrated wind energy solution packages to
customers in India.
Manufacturing Facilities:
Suzlon has adopted a mix of manufacturing strategies to ensure unfettered growth. Suzlon is
globally integrated company, with production facilities in four countries including India, China,
USA, and Germany with an aggregate capacity to manufacture WTGs to generate 15,000 MW of
power per annum. Suzlon has also developed forging and foundry units in India. In fact the
company has established forging facilities of 70,000 MT and foundry facilities of 1, 20,000 MT.
The manufacturing facilities of the company alone has employed over more than 4,000 people
worldwide. Currently company conducts aerodynamics research in The Netherlands, develops
wind turbines and components in Germany, and optimizes gearboxes in Belgium. Company’s 13
units across the globe make all the key components of wind turbines. The rotor blades for its
different models of WTGs are manufactured at its Daman and Pondicherry plants. The company
manufactures generators through its 74.9% owned subsidiary Suzlon Generators, and tubular
towers through its 75%-owned subsidiary Suzlon Structures.
To reduce the risk of non availability of key components on one hand and prevent it from being
imitated by the competitors on the other, it has entered into exclusive supply agreements with
some of its leading suppliers. It has also expanded its vendor base across different countries to
further improve supply chain efficiencies and to build a natural hedge against foreign currency
risks.
Research & Development:
The company has forged ahead with an ethos of innovation in everything that it does. To
accomplish its innovation philosophy, Suzlon has established its R&D and engineering offices in
Denmark, Germany, India, and The Netherlands. The R & D activities of the company are
carried out through its subsidiaries, SEG and AE Rotor Holding B.V., Netherlands (AERH).
6These subsidiaries focus on designing and developing new WTG models, upgrading current
models and developing efficient and effective rotor blade technology for its WTGs.
Management of the company views technology as a competitive advantage driver and a vital
enabler in this industry for a company to be a market leader. Suzlon’s sophisticated R&D
capabilities in the wind energy space have enabled the company to develop comprehensive
product portfolio, ranging from 600 KW to 2.1 MW wind turbines. At Suzlon, wind turbine
technology continues to be a dynamic field of research with greater focus on reliability, ease of
operation and load reduction that will enable the company to reduce the weight and cost of its
wind turbines. Suzlon is strongly focusing on increasing the energy yield of wind turbines at a
given rating by improving aerodynamics and applying larger rotors. Its R&D team consists of
500 wind technology experts, operating from its R&D headquarters in Hamburg. The
collaborative efforts of Suzlon’s R&D teams, the product development teams in Germany, The
Netherlands, Denmark and India, its leading technological partners such as Hansen
Transmissions and research centres experienced in wind energy such as Risø in Denmark, ECN
and TU Delft in the Netherlands and Fraunhofer Gesellschaft and the University of Kiel in
Germany gives it the needed technological expertise.
Quality Control and Product Certification:
Quality is the buzzword at Suzlon and hence it’s been embedded in every action of the
organization. The business processes of Suzlon facilitate it to manufacture the WTGs of highest
quality. Its design and manufacturing facilities and operations and maintenance services have
been certified as ISO 9001:2000 by Det Norske Veritas. The Suzlon’s WTG models are designed
for a 20- year life cycle and its rotor blades undergo extensive reliability and operational testing
conducted by the Technical University of Delft. Suzlon’s WTGs are also designed to meet the
standards set by the two internationally-recognized independent WTG certification bodies,
Germanischer Lloyd and the International Electrotechnical Commission. It also has obtained
WTG certification from the CWET, an autonomous body attached to the Indian Ministry of Non-
Conventional Energy Sources which in turn is affiliated with the Risø National Laboratory,
another internationally recognized WTG certification agency.
7Environment and Safety Policy:
Suzlon feels that it is not only the business entity but union of community, shareholders, vendors,
contractors and employees. At Suzlon, all the stakeholders are united, from all walks of life
making company a global community, working together in fulfilling its vision of powering a
greener tomorrow. Suzlon continuously endeavors to find out ways to exceed stakeholders'
expectations in providing product and service with sustainable quality, technology, cost and
value. Suzlon is truly committed to the environment and safety of all its stakeholders. The
company has therefore taken all the measures to safe guard the health & safety of all its
stakeholders and completely fulfills the environmental compliances.
Products:
Suzlon is an integrated wind energy solutions provider. It offers the entire gamut of solutions
starting from wind resource mapping, land acquisition, technology development, turbine
manufacturing, engineering, procurement and construction (EPC) projects and completing the
chain with operations & maintenance services. The current product range of the company’s
WTGs includes S88-2.1 MW, S82-1.5 MW, S66-1.25 MW, S64-1.25 MW and S52-600 KW.
Suzlon Energy is among the first Asian company to manufacture WTGs in different capacities.
Company sells S88-2.1 MW, S82-1.5 MW, S66-1.25 MW, S64-1.25 MW and S52-600 KW
models of WTGs in Indian markets. WTGs model S82-1.5 MW and S64-1.25 MW are sold in
Chinese markets. In Australian markets WTGs model S88-2.1 MW is sold. WTGs model S88-
2.1 MW is sold in North American markets and company sells model S88-2.1 MW in European
markets. To explore the growth opportunities in the global market for WTGs, company has also
set up its marketing headquarters in Denmark, a centre for wind energy.
Markets & Clients:
The company principally operates in India, China, America, Europe, New Zealand, South Korea,
South Africa and Australia. It has also established business units in all the major wind markets of
the world. The company has fully functional international sales, marketing and service branches
in all those countries in which it is actively operating with an emphasis on local expertise to
drive high growth in each market. In a short span of 15 years, Suzlon has become the world’s 3rd
largest wind turbine manufacturer in the world. Suzlon’s market share combined with Repower
8is 9.8% currently. Company’s wind turbine generators (WTGs) are customized to local
geographies, wind regimes and needs, for installation in a variety of climates ranging from hot,
dry deserts, to humid coasts and near-freezing plains. With a range of WTGs, ranging in capacity
from 600 kW to 2.1 MW, company have successfully set up projects in some of the most
essential wind sites in the world.
The esteemed customers of the company in India are from varied business segments like small,
medium and large companies; Indian, multinational corporate houses, private and public sector
enterprises, community ownership and even high net worth individuals (HNI). Suzlon has
erected prestigious wind farm projects such as Hallet Wind Farms in Australia, John Deere in the
USA, Penamacor in Portugal, Weihai in China just to name a few. Some of the major clients of
Suzlon are AGL Energy Ltd, TrustPower Ltd, Tecneira, Servtec, DLF Group, Reliance Group,
Aditya Birla Group, Tata Group, British Petroleum, MSPL, John Deere Wind Energy and
Distributed Wind Systems.
Suzlon’s ability to leverage local expertise and global experience, with an 'end-to-end solutions'
model and highly customized products, made Suzlon the highest-growth, highest-margin wind
turbine manufacturer globally. Suzlon is a market leader in India with a consistent market share
of over 50% consecutively in the last 10 years. The current cumulative power installed base as
on March 2009 was more than 4, 400 MW across 8 states in India.
Global Operations:
In China Suzlon has wholly owned subsidiary company, Suzlon Energy (Tianjin) Limited.
Suzlon was the only international player in the Chinese market till 2007. Suzlon Energy (Tianjin)
Limited has already signed up projects totaling 825 MW (almost 600 wind turbines) with
different clients in China.
In very short duration, Suzlon Wind Energy A/S has established itself as one of the leading
European wind turbine manufacturers. Suzlon Wind Energy A/S is based in Aarhus, Denmark,
and is heading Suzlon´s activities within the regions of Europe, Middle East, Africa as well as
Central and South America. In addition to its headquarters in Aarhus, Suzlon Wind Energy A/S
has already established subsidiaries in Spain, Portugal, Italy and Brazil. Suzlon Wind Energy
A/S has signed contracts totaling more than 400 MW for the delivery of wind turbines to
European markets such as Portugal, Spain, Italy, Turkey and Romania. It is also expanding into
9other European markets such as Ukraine, Bulgaria, Greece and Sweden. European customers
have recognized Suzlon as the holistic wind energy solution provider under single roof.
Suzlon Wind Energy Corporation has more than 1,400 MW of installed capacity to its credit in
North America and more than 650 employees supporting the sales, construction, service and
manufacturing of WTGs. Suzlon had established its first wind turbine in Southwest Minnesota in
2004, which later became home to Suzlon’s first blade manufacturing facility outside India. The
highly experienced and skilled workforce gave Suzlon a competitive edge and thus could very
rapidly make its presence felt in the North American markets.
Suzlon Energy Australia Pty. Ltd is a subsidiary of Suzlon Energy Ltd, India. The headquarters
are located in Melbourne. This company manages Suzlon’s business activities across Australia
and New Zealand. The company provides fully wrapped engineering, procurement and
construction (EPC) turnkey delivery solutions of sustainable wind power plants. Suzlon is
Australia’s leading wind turbine supplier. Company has managed to get orders in excess of
AUD 2 billion to supply over 750 MW of clean power. More over Suzlon’s Australian
operations has been recently awarded a contract from Infigen Energy for the EPC Turnkey
delivery of the 42 MW Woodlawn Wind Farm.
Marketing and Sales Functions:
In India, Suzlon sells its WTGs through its sales and marketing team and in foreign markets the
products are sold by its foreign sales and marketing subsidiaries and branch offices. The
company has geographically segmented the Indian markets according to the states having
potential for wind energy projects. The company has identified Indian states like Maharashtra,
Gujarat, Rajasthan, Tamil Nadu, Karnataka, Madhya Pradesh and Andhra Pradesh as its potential
customers. The marketing and sells functions in each potential Indian state are performed under
the supervision of a senior management executive who directly reports to the chairman and
managing director of Suzlon Energy Ltd. Company also has setup sales offices in major cities of
India such as Pune, Bangalore, Chennai, Coimbatore, Hyderabad, Ahmedabad, Rajkot, Surat,
Jaipur, Calcutta, Mumbai, Indore and New Delhi. The marketing team of the company in India
focuses on three types of customers:
(a) Companies that have manufacturing units with very high electric power consumption
10(b) Companies with high profitability and/or surplus liquidity and is looking for investment
opportunities with stable returns and offering tax holidays to their business; and
(c) Power utilities and state nodal agencies
The potential customers are contacted by Suzlon’s marketing team. The marketing team initiates
the selling process by introducing the potential customer to the company and the potential
benefits of wind power. Over the time marketing team makes regular follow up calls and visits
and provides potential customers with detailed working and feasibility studies regarding wind
power projects. The company also arranges site visits for its potential customers to its existing
wind farms. In India, company also gets WTGs turnkey orders by participating in the tendering
process of public utility bodies, state nodal agencies and public-sector entities. At Suzlon,
conducting credit checks of potential customers by reviewing their financial statements is the
standard practice to ensure that they are financially sound. As on March 2009, Suzlon have
cumulatively installed WTGs to generate more than 4, 400 MW of power across 8 states in India.
In 2008-09 Suzlon commissioned projects equal to 782 MW increasing the market share of the
company to 52%.
The company also has expanded its presence internationally, with an emphasis on North
America, China and Australian markets. The company’s global marketing and sales operation are
managed by its Danish subsidiary, Suzlon Energy A/S. Its international marketing activities
primarily consist of developing contacts with wind power project developers with a view of
supplying WTGs for wind power projects developed by them.
The company promotes its business and products by advertising in professional industry
journals, attending national and international energy fairs, such as the Hanover Fair, PowerGen,
WindTech Husum and PowerExpo, as well as conferences and professional seminars conducted
by trade associations and various wind energy associations, such as the American Wind Energy
Association and the British Wind Energy Association.
In 2001, Suzlon incorporated Suzlon Wind Energy Corp, USA (SWECO), in order to establish
its business presence in the United States. US is amongst the top three wind energy market in the
world in terms of cumulative installations. In US company’s marketing team targets the
following types of customers:
(a) Companies interested in investing in renewable energy sources
(b) Public utility companies and agencies
11(c) Wind energy project developers and
(d) Municipalities, schools and cooperatives interested in establishing captive power facilities.
Company has established business relationships with a core group of key customers, strategic
investors and financial investors, with a view to gaining access to wind power projects that these
entities propose to undertake, as well as securing exclusive WTG supply agreements with these
entities. Company is focusing its direct sales efforts in three main geographic areas of US namely
Midwest, the South (Texas, Oklahoma) and the West (California), which allows it to concentrate
on utilities and independent service operators in areas that it believed have growth potential.
Suzlon has established Suzlon Energy A/S in Denmark as its global headquarters for sales
outside India. It has established several marketing and project offices for the European market.
The major clients of the company in Europe are power utility companies, wind power project
developers and private investors. The company marketed its WTGs in Scandinavia, the Baltic
region and Southern Europe in initial years.
Marketing activities in Australia and New Zealand are performed by Suzlon Energy Australia
Pty. Ltd which has substantial renewable energy resources, including wind. In both these
markets, customers are primarily power utilities and wind power project developers. Company
penetrated these markets by undertaking a pilot project to demonstrate its capabilities as a WTG
manufacturer. In both these markets, company’s marketing team also undertakes direct selling to
both wind power project developers and utilities clients.
In China, company has setup a representative office in Beijing. China has one of the largest wind
power installations because the Chinese government encourages development of renewable
energy resources and has declared its intention to get 10% of its electricity from renewable
energy sources by 2020. Initially in China, company set up local subsidiary and over the time
through this subsidiary company started a fully-integrated WTG manufacturing facility. The state
owned utility service providers control the Chinese energy market and thus Suzlon targets these
state owned utility service providers and its subsidiaries as its primary customers.
Human Resources:
Wind Energy Industry is technology-driven industry and thus Suzlon’s management strongly
believes that its employees will be key contributors to its business success. In line with its belief,
company focus on attracting, training and retaining the best talent employees available. The
12company believed that a combination of its position as a leading wind energy solutions provider,
its working environment and competitive compensation programs will allow Suzlon to attract
and retain most competitive people. Although Suzlon maintains harmonious industrial relations
with its employees, the employees of its operations and maintenance centre at Vankusawade
went on strike demanding revision in wages, allowance, overtime payments, and changes in
working conditions such as lodging and boarding facilities, transport facilities, reorganization of
working pattern etc, in 2004. However this issue was resolved amicably within just two months.
The company place special emphasis on the training of its employees to enable them to develop
their skills to meet changing WTG technology and to provide efficient and effective O&M
services. Suzlon have also established a world class training centre near Pune.
Suzlon strives to foster a feeling of well-being in its employees through care and respect. The
company has several structured programs including employee mentoring and grievance
management which are intended to facilitate a friendly and cohesive organizational culture. To
motivate and recognize the achievements and contribution made by its employees during the
year, it organizes an annual celebration called “Sumilan”. Those employees of operations and
maintenance department of the company, and located in remote wind farm sites, are provided
residential, medical, recreational and communications facilities as part of the wind farm
infrastructure of the company.
Suzlon’s compensation policy is performance based and the company believes it is competitive
with industry standards in India. The compensation packages are adjusted annually based on
industry standards, compensation surveys and individual performance. Company also gives long-
duration service bonuses to employees who have completed at least five years and ten years of
service with it. Suzlon have also instituted a stock option plan to reward and help retain its
employees. For the employees working in India, company gives post-retirement benefits like
provident fund, gratuity and a superannuation scheme. Other employees benefits at Suzlon
includes personal accident insurance, group life insurance and medical insurance for employees
at manager level and above, including their direct dependents, which includes hospitalization
benefits.. Suzlon’s employees based in other jurisdictions, such as Denmark, the Netherlands,
Germany, Australia and the United States, the company provides all those benefits which are
required by the labour laws of the respective country.
13Work Culture:
The corporate values, brand core and philosophy of global assimilation are three fundamental
pillars of Suzlon’s work culture. Agility, creativity, value addition, commitment and integrity
are some other prominent work culture features at Suzlon. Inducting people into Suzlon’s brand
core of sustainable development is a process that involves inculcating these values and blending
the best qualities of the individual with those of the organization. The highly effective and
efficient team of 14,000 employees at Suzlon is bringing laurels for the company. Concern for
people is embedded in the DNA of Suzlon’s organizational culture. Suzlon offers a truly global
exposure to its employees with more than 1,000 clients across the globe and projects
commissioned in leading economies like America, Asia, Europe and Asia Pacific. Suzlon has
leveraged the rich operational expertise and experience of the world's finest wind power
technology to harness every individual towards a powerful ‘greener tomorrow’.
Competitive Strengths:
Suzlon’s success reflects a number of competitive strengths, which include:
§ Strong management team
§ Global production platform and access to an integrated manufacturing base
§ Delivering enhanced value chain in wind energy markets
§ In-house technology and design capabilities
§ Strong resource base and cost-efficient manufacturing and supply-chain in India
§ Market leader in India and significant presence in several other high growth markets
§ In house strong R & D and operations and maintenance expertise
§ Focus on providing “integrated solutions” wind energy packages with its Associate
Companies to customers in India
Acquisition & Alliances:
Suzlon is in a continuous process of gaining competitive global advantage through initiatives like
vertical integration, acquisitions, technology upgrades, and human resource retention. Suzlon’s
business has dramatically grown over the years with its unique strategic alliances and acquisition
policy. The potential acquisition and alliance targets are evaluated on the basis of their
capabilities to generate opportunities to develop business, expand capabilities and geographical
14reach. Suzlon pursue only those transactions that complement its key strengths, are synergistic,
and in its assessment have manageable integration risks. In line with this strategy, Suzlon has
made all its strategic acquisitions and alliances. Suzlon has joint venture partnership agreement
with REpower, has established the Renewable Energy Technology Center in Hamburg, and has
acquired Hansen Transmissions International NV, Belgium to manufacture gearboxes. Suzlon’s
generator manufacturing unit is a joint venture between Elin EBG Motoren GmbH of Austria, for
the manufacture of slip ring generators required for its WTGs. Suzlon Structures is a joint
venture with the Kalthia Group for the design and manufacture of tubular towers, which are used
for the higher and heavier WTG installations. Recently Suzlon Wind Energy A/S, the European
division of Suzlon Energy Limited, has entered into a joint venture with Volkswind Bulgaria
GmbH through the company DIV Wind OO. Volkswind Bulgaria is a subsidiary of Germany’s
Volkswind GmbH, one of the leading Independent Power Producers (IPPs) in Europe, and with
over 40 wind farms it is also one of the largest operators of wind farms in Germany. The joint
venture is aimed to accelerate Suzlon’s growth into the Bulgarian wind energy market combining
Volkswind’s local knowledge and develop experience with Suzlon’s expertise in developing
utility scale projects. The joint venture will develop projects exclusively using Suzlon wind
turbines.
Awards and Recognitions:
Within a span of one and half decade, Suzlon Energy Ltd has carved a niche for itself and a
brand to be reckoned globally. It is an organization with perfect blend of responsibility, honesty,
ethicality and professionalism without foregoing the interest of its various stakeholders. Over
these 15 years the collaborative efforts of the company, its management and employees have
been very fruitful, effective and productive in every sphere of its business activities. The
showcases and corridors of Suzlon’s corporate office at Pune are decorated with seals, trophies,
certificates and awards for the outstanding performances in the field of renewable energy, wind
industry and for the economy as a whole. Some of the awards and recognitions that have been
awarded to the company and its management are as under:
1. Mr. Tulsi Tanti the CMD of Suzlon Energy Ltd had been honored with ‘Champion of the
Earth’ title for Entrepreneurial Vision by the United Nations Environment Program and
15the Canada India Foundation for Global Entrepreneurial Vision with the Global Indian
Award for the year 2010.
2. In the year 2008-2009 Suzlon has been awarded as the ' The Most Admired Company
Power (Non conventional) by KPMG and ASAPP Media Group, won the first prize for
‘Best Manufacturer’ (2006-2008) and the second prize for the ‘Best Service Provider’
among Manufacturers (2006-2008). The awards were presented under the aegis of Wind
India 2008 awards.
3. In the year 2007-2008, Mr. Tulsi R Tanti, CMD, Suzlon Energy Limited was honored
with Rajiv Gandhi Award as best industrialist and TIME's Heroes of the Environment
Awards for initiating action on Global Climate Change. The company also won the
Euromoney and Ernst & Young Global Renewable Energy Awards M&A of the Year for
REpower Systems AG, Germany.
Other than the above awards, Mr. Tulsi Tanti had been honored with CNBC-TV 18 India
Business Leader Award for ‘Most Promising Entrant into the Big League’. The Solar Energy
Society of India Awarded (SESI) Mr. Tulsi Tanti as Pioneer-Renewable Energy. Mr. Tanti also
received the 8th Ernst & Young Awards as Entrepreneur of the Year. The Foundation of Indian
Industry and Economists has also presented Mr. Tanti Lifetime Achievement Award as Best
Renewable Energy Man of the Decade. Mr. Tulsi R. Tanti had received the CIF Chanchlani
Global India Award, 2009, instituted by Canada India Foundation, for his outstanding
contributions to promote non-conventional sources of energy.
Suzlon Foundation-CSR Initiative:
Suzlon Foundation has been founded by Suzlon Energy Ltd and its subsidiaries under its
corporate social responsibility initiatives. It is registered under Section 25 of the Indian
Companies Act 1956. Suzlon is committed to practice sustainable development for “Powering a
Greener Tomorrow” and thus this foundation is ensuring that business policies and practices
support sustainability as its guiding principle. Suzlon Foundation firmly believes that business
and its environment are inter-dependent and thus works to strengthen the organic link between
them. It also feels that higher degree of sustainability can be achieved in business by balancing
growth in all aspects of financial, natural, social, human and physical development. Corporate
social responsibility at Suzlon is not merely charity and philanthropy but it believes in
16empowering stakeholders to make informed choices that will integrate business imperatives with
development objectives. Suzlon empowers local communities to deal with livelihood, health,
civic amenities and education issues. It also empowers employees to ensure their own safety and
be responsible citizen. Corporate social responsibility initiatives of Suzlon are thus helping to
boost the economy in an extremely responsible manner.
Suzlon conducts ‘Transformative Corporate Social Responsibility Programs’ to ensure that
development is sustainable, which is considered a pre-requisite at Suzlon. It aspires to embody
ethical standards that are not limited by legal compliance. Transformative Corporate Social
Responsibility Programs are aimed to change the way it conducts the business and focuses on its
internal environment and employees. To achieve sustainability business policies, practices and
procedures are reviewed and revived through identification of internal issues and involvement of
departments for implementation. The company integrates the CSR perspective in supply chain
management, looking for solutions in energy, green gas emissions, waste management, land
acquisition procedures and human rights of labour just to name a few. In fact the CSR activities
of Suzlon are woven in its business cycle itself. Minimizing footprints and engaging employees
to be responsible citizens of the society are the goals of ‘Transformative Corporate Social
Responsibility Programs’. Suzlon Foundation has partnerships across 8 states and 2 union
territories in India namely Daman, Gujarat, Karnataka, Madhya Pradesh, Maharashtra,
Pondicherry, Punjab, Haryana, Rajasthan and Tamil Nadu.
Conclusion:
Suzlon’s success is particularly striking in light of India’s dysfunctional power distribution
system, where electricity boards charge industrial users more than twice as much per kilowatt
hour as in the United States. Also the country remains vulnerable to blackouts on a daily basis,
especially in certain regions of India. Thus wind energy presents an opportunity for India to
break with this unreliable means of power production and distribution. More over the fossil fuel
prices are rising continuously, making investments in wind turbines more attractive investments.
The finite supplies of fossil fuels, the threat of climate change and policy measures to drive the
growth of renewable energy, are all the important forces that will drive the steady growth of
wind energy industry and making renewable sources of energy supply a bigger part of the
17world's energy matrix. Therefore, to conclude business prospects, stability and growth prospects
seems to be very high for Suzlon Energy Ltd.
18Annexure-I
Ownership Structure of Suzlon Group
Promoters
Suzlon Energy Ltd (India)
Domestic Subsidiaries Associate Companies
Suzlon Windfarm Services Ltd. Sarjan Realties Ltd.
Suzlon Green Power Ltd. Branch Suzlon Infrastructure Ltd
Suzlon Gujarat Wind Park Ltd. China Shubh Realty (South) Pvt Ltd
Suzlon Power Infrastructure Pvt. Ltd. Shubh Realty (Gujarat) Pvt Ltd
Suzlon Engitech Pvt. Ltd. Samiran Jaipur Windfarms Pvt. Ltd.
Suzlon Generators Pvt. Ltd Samiran Jaisalmer Windfarms Pvt. Ltd.
Suzlon Structures Pvt. Ltd Kurumadikere Energy Ltd.
Sunset Windfarms Private Limited
Samimeru Windfarm Pvt. Ltd
International Subsidiaries
AE Rotor Suzlon Rotor Suzlon Energy Suzlon Windpark SE Drive Technik Suzlon
Holding B.V. Corporation GmbH Mgt GmbH GmbH Energy A/S
Netherlands (USA) (Germany) (Germany) (Germany) (Denmark)
AE Rotor Suzlon Energy Windpark Olsdorf Suzlon Energy Suzlon Wind
Techniek B.V. B.V. WATT GmbH & Co. Australia Pty. Ltd. Energy Corp.
(Netherlands) (Netherlands) KG, (Germany) (USA)
Cannon Ball Wind Energy
Park I, LLC, USA
19Annexure-II
Organization Structure
CMD
Director International Business Head Head Head
Development & HR Head Business Supply- Head Quality
Finance Develop Chain Purchase Assurance
..t.
Head Human CEO
Resources Denmark
CEO CEO Head
USA Australia China
Director Director Head CEO Head Head
Project Corporate O&M Generator Design & Composites
Planning Affairs Unit Engineering
20Annexure-III
Country of
Name of Foreign Subsidiaries
S.No incorporation
1 Hansen Drives Limited Hong Kong
2 Hansen Drives Pte Limited Singapore
3 Hansen Wind Energy Drives (China) Co Ltd. PR China
4 PowerBlades GmbH Germany
5 PowerBlades SA Portugal
6 REpower Australia Pty Ltd. Australia
7 REpower Benelux b.v.b.a. Belgium
8 REpower Betriebs - und Beteiligungs GmbH Germany
9 REpower Canada Inc Canada
10 REpower Diekat S.A. Greece
11 REpower Espana S.L. Spain
12 REpower Geothermie GmbH Germany
13 REpower Investitions - und Projektierungs GmbH & Co. KG Germany
14 REpower Italia s.r.l Italy
15 REpower S.A.S. France
16 REpower North (China) Ltd. PR China
17 REpower Systems AG Germany
18 REpower UK Ltd. United Kingdom
19 REpower USA Corp. USA
20 Repower Wind Systems Trading (China) Ltd. PR China
21 REpower Windpark Betriebs GmbH Germany
22 Sister - sistemas e Technologia de Energias renovaveis Lda Portugal
23 Suzlon North Asia Ltd. Hong Kong
24 Suzlon Wind Energy Equipment Trading (Shanghai) Co. Ltd. PR China
25 Suzlon Wind Energy Nicaragua Sociedad Anonima Nicaragua
26 Suzlon Wind Energy Romania SRL Romania
27 Suzlon Wind Enerji Sanayi Ve Ticaret Limited Sirketi Turkey
28 Tarilo Holding B.V. The Netherlands
29 WEL Windenergie Logistik GmbH Germany
30 Windpark Blockland GmbH & Co KG Germany
31 Windpark Meckel/Gilzem GmbH & Co KG Germany
32 Windpark Olsdorf Watt GmbH & Co. KG Germany
21Annexure IV
The following companies are promoters group companies
i) Suzlon Windfarm Services Ltd.
ii) Sarjan Infrastructure Finance Ltd.
iii) Suzlon Green Power Ltd.
iv) Synergy Global Pvt. Ltd.
v) Suzlon Generators Pvt. Ltd.
vi) Suruchi Holdings Pvt. Ltd.
vii) Suzlon Structures Pvt. Ltd.
viii) Sugati Holdings Pvt. Ltd.
ix) Suzlon Power Infrastructure Pvt. Ltd.
x) Sanman Holdings Pvt. Ltd.
xi) Suzlon Gujarat Wind Park Ltd.
xii) Samanvaya Holdings Pvt. Ltd.
xiii) AE Rotor Holding B.V.
xiv) SNS Textiles Ltd.
xv) AE Rotor Techneik B.V.
xvi) Kush Synthetics Pvt. Ltd.
xvii) Suzlon Energy B.V.
xviii) Aryan Hospitality LLC
xix) Suzlon Wind Energy Corporation
xx) Balaji Corporation
xxi) Cannon Ball Wind Energy Park
xxii) Harsha Hotel LLC
22Annexure V
Financial Performance:
The standalone and consolidated audited financial results for the year ended March 31, 2009 are
as follows:
Particulars Standalone Consolidated
Rs in Crore US$ in Millions* Rs in Crore US$ in Millions*
2008-09 2007-08 2008-09 2007-08 2008-09 2007-08 2008-09 2007-08
Sales 7,235.58 6,926.01 1,426.85 1,726.75 26,081.70 13,679.43 5,143.31 3,410.48
Other operating
16.36 16.23 3.23 4.05 177.09 31.66 34.92 7.89
income
Earning/profit
before interest,
651.70 1,707.17 128.52 425.62 2,815.88 2,050.72 555.29 511.27
depreciation and
tax (EBIDTA)
Add: Other
160.78 109.38 31.71 27.27 271.75 236.32 53.59 58.92
income
Less: Interest 380.12 125.34 74.96 31.25 901.21 532.03 177.72 132.64
Less:
99.16 86.21 19.55 21.49 573.14 289.36 113.02 72.14
Depreciation
Profit before tax
and exceptional 333.20 1,605.00 65.71 400.15 1,613.28 1,465.65 318.14 365.41
items
Less: Exceptional
873.16 285.21 172.19 71.11 896.29 285.21 176.75 71.11
items
Profit/(Loss)
(539.96) 1,319.79 (106.48) 329.04 716.99 1,180.44 141.39 294.30
before tax
Less: Current tax
(Net of earlier
years tax and - 66.13 - 16.49 207.01 151.17 40.82 37.69
MAT credit
entitlement)
Less: Deferred
(81.76) (23.49) (16.12) (5.86) 67.12 (2.28) 13.24 (0.57)
tax
Less: Fringe
11.07 11.44 2.18 2.85 13.99 14.40 2.76 3.59
benefit tax
Net profit/(loss) (469.27) 1,265.71 (92.54) 315.56 428.87 1,017.15 84.57 253.59
Add: Share in
associate’s profit - - - - 2.32 55.75 0.46 13.90
after tax
Less: Share of n.a. n.a. n.a. n.a. 194.71 42.80 38.40 10.67
23minority interest
Net profit/(loss)
after share in
associate’s profit (469.27) 1,265.71 (92.54) 315.56 236.48 1,030.10 46.63 256.82
and minority
interest
Add: Balance
2,268.44 1,477.86 447.34 368.45 1,690.12 1,163.04 333.29 289.96
brought forward
Profit available
1,799.17 2,743.57 354.80 684.01 1,926.60 2,193.14 379.93 546.78
for appropriations
Less: Proposed
dividend on - 149.69 - 37.32 - 149.69 - 37.32
equity shares
Less: Residual
dividend of 0.13 - 0.03 - 0.13 - 0.03 -
previous year
Less: Dividend on
- - - - - 0.20 - 0.05
preference shares
Less: Tax on
(1.05) 25.44 (0.21) 6.34 0.87 26.38 0.17 6.58
dividends
Less: Transfer to
- 300.00 - 74.79 - 326.75 - 81.46
general reserve
Surplus carried to
1,800.09 2,268.44 354.98 565.55 1,925.60 1,690.12 379.73 421.37
balance sheet
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