Suzlon eyes $1-bn worth of new orders every quarter

Suzlon eyes $1-bn worth of new orders every quarter

Mumbai: Wind power major Suzlon Energy, which recently took complete control of its German subsidiary REpower, has said it will focus on value engineering to remain competitive and has set a target of bagging $1 billion worth of new orders every quarter for the next few years.

“We are working on value engineering by introducing new products like the S9X series of turbines that will not only enable us reduce cost, but also give us a competitive advantage in the market. With the new technology, we aim to bag orders worth $1 billion every quarter, every year," Suzlon Energy chairman and managing director Tulsi R Tanti told PTI in an interview here.

Currently, the world’s fifth largest wind turbine maker’s order-book stands at $7 billion and has a topline of $5 billion.

The Pune-based company has created the S9X suite of low wind speed turbines - S95 and 7, with a 2.1 MW rating for all markets, which is an advancement over the successful S88 wind turbines.

“The smart S9X innovation and comprehensive design increases energy yield by 14-19 per cent, improves service ability and ease of maintenance," Tanti said.

The 2 MW-class turbines come in two variants of 90-m and 100-m hub heights and the rotor diameter of 95 m and 97 m.

Suzlon has also started working on manufacturing products in the 9X suite, with a capacity of 3 MW and 6 MW. While the 2 MW turbines are designed for developing markets, the 3 MW will cater to the developed markets and the 6 MW for the offshore markets, he said.

"By brining in these new technologies, we expect to bring down material consumption in all the three platforms by 10 per cent each. The S9X product suite is designed to provide higher return on investment for our customers through higher generation, greater efficiency and improved technology,“ Tanti said.

“We are working on bringing down further the cost per energy through the technology. We expect to reduce the cost per energy by 25% over the next two years through technology," Tanti said.

On its %1.28-billion order from Britain’s Caparo Group to generate 1000 MW, he said, “500 MW worth of capacity will be commissioned in this fiscal, while another 500 MW will be commissioned within the following year."

Tanti also said, with REpower coming fully under its control, Suzlon expects to shave off 200 million euros from its overall cost structure next fiscal, which primarily involves sourcing more components from India and China.

“Nearly 65 per cent of our spends are on components, a majority of which comes from Europe. But given the current scenario, we plan to concentrate on the domestic market as well as China for components. This will help in reducing our material cost by nearly 100 million euros in FY13 and another similar amount from other heads," Tanti said.

The cost-saving will be on the back of acquisition of the REepower.

“With the successful acquisition of the complete stake in REpower, we see ourselves well-placed in the market. We will be focusing on market positioning, joint procurement and joint technology development for all our current and future projects. REpower, which was otherwise buying components from Europe will now import it mostly from India," Tanti added.

Suzlon, present in 32 markets with an installed capacity of 18,000 MW (7000 MW in the country), recently bagged $6.5-billion worth orders for the next three years, making it the biggest order in the area.

Suzlon stocks fell nearly 40 per cent in the past one week. Capping lack of investor confidence was the report that promoters sold 2 per cent stake to address margin calls to bankers.

When asked about this, Tanti said the current debt of nearly 9,000 crore is not a problem, considering our healthy order-book of $6.5 billion. “With a $7 billion order-book and $5 billion topline, $2 billion in debt is not a big deal."

On whether the company will be in a position to pay back the $550 million FCB redemption due for next June and September, he said “Of course. I am not seeking any extension."

The company has 10,000 crore debt, out of which, around 6,000 crore is working a capital loan, and 4,000 crore is a long-term debt, which is to be re-paid over 5-7 years. Over the next 12 months, it has a repayment obligation is $750 million.

Tanti said, “As of the September quarter, the net debt to equity ratio is 1.6 times, which we want to bring down to 1.4 by the end of the year and by March 2013, it will be be at 1:1, and that too, without raising any equity."