Suzlon Plans to Expand Capacity in China as Wind Turbine Epicenter Shifts
Suzlon Energy Ltd., India’s biggest maker of wind-turbine generators, said it plans to expand capacity at its plant in China as the company expects to return to profit this financial year.
The Ahmedabad-based company will manufacture turbines capable of generating a combined 1,000 megawatts in China by 2013, Chairman Tulsi Tanti said in an interview today in Tianjin, China. That’s a 67 percent increase from the current capacity of 600 megawatts, which Tanti said will be used fully next year.
“In the long term, the epicenter of our industry and our business will move to China,” he said. “China will remain the largest market for the next 10 years.”
Suzlon joins General Electric Co. and European rivals that are introducing newer technology and opening factories in China, the world’s fastest-growing green energy market, as they compete for orders. The country plans to add 18 gigawatts of wind capacity this year, which Bloomberg New Energy Finance estimates is double what’s expected in the U.S., the No. 2 market.
The Indian turbine maker is looking to form partnerships with Chinese companies to develop offshore wind projects using 5-megawatt and 6-megawatt turbines, he said.
Orders from China and India may help Suzlon offset slowing orders in Europe after the debt crisis made it difficult to raise funds for renewable energy projects.
Suzlon’s loss in the three months ended June 30 doubled as a weaker euro devalued the company’s overseas assets. The loss in the year ended March was 9.8 billion rupees.
“We have a good home market,” Tanti said. “India is good, China is good, profitability is good. What we were losing was our international operations.”
Tanti said Suzlon isn’t selling stakes in its European units, including Repower Systems AG, a German wind turbine maker.
Suzlon is in talks to sell as much as a 25 percent stake in Repower for $500 million, the Economic Times reported on Aug. 16.
“It’s a strategic investment and we would like to integrate the company,” Tanti said. Suzlon held 90 percent of Repower as of March 31, according to data compiled by Bloomberg.
Suzlon won’t sell its interest in Hansen Transmissions International NV until it can get a better valuation for the Belgian gearbox maker, Tanti said.
“There’s no benefit for us at this valuation to sell,” Tanti said. “At an appropriate and good and right valuation, we might think of an exit.”
Suzlon retains a 26 percent stake in Hansen after selling a 35.2 percent interest in the company for 224 million pounds on Nov. 19 to help pare debt. Hansen’s share price has fallen 50 percent this year, according to data compiled by Bloomberg.
To contact the Bloomberg staff on this story: Baizhen Chua in Beijing at email@example.com.