Suzlon to save 200m euro by sourcing more from India, China

Mumbai: With its German subsidiary REpower coming fully under its control, the world’s fifth largest wind turbine maker Suzlon expects to save 200 million euros in its overall cost by next fiscal.

“Nearly 65 percent of our spends are on components, most of which, come 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 FY 2013 and another similar amount from other heads,” Suzlon Energy Chairman and Managing Director Tulsi R Tanti told PTI in an exclusive interaction here today.

[caption id=“attachment_140657” align=“alignleft” width=“380” caption=“Wind turbine maker Suzlon expects to save 200 million euros in its overall cost by next fiscal.Reuters”]  [/caption]

The cost-saving will be on the back of acquisition of the German wind turbine company REpower, which it recently completed.

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“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

the European market, will now import it mostly from India,” Tanti said.

Suzlon expects its total expenditure, which includes debt-servicing, fixed costs and material costs, to come down by 200 million euros by the next fiscal, Tanti said.

Europe is the single largest component market for the Pune-based alternative energy major, as it sources 30 percent of its entire parts from that region. A tad over 20 percent is managed from India, while under 10 percent come from

China, he said.

“We want to bring down the spends from European market and encourage exports from the domestic market, as it will get us better margins on the one hand from overseas operations and more volume in the domestic market (which, again will help us go bargain hunting),” he said.

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.

REpower will concentrate mainly on the developed markets including the US, Germany, Europe, Britain and Australia, while Suzlon will cater to the rising demand from the emerging markets–India, China, South America and South Africa, Tanti said.

“By adopting this strategy, we will not only be able to reduce our material cost but also enhance our market position by nearly 2 percent in the next fiscal,” Tanti said.

PTI