Suzlon to boost China wind turbine output

PUBLISHED : Monday, 22 November, 2010, 12:00am
UPDATED : Monday, 22 November, 2010, 12:00am

Indian wind turbine company Suzlon Energy plans to expand production capacity at its plant in Tianjin by two-thirds and is mulling adding production sites in northern China to be closer to customers' wind farms, according to its new China chief.

The company announced last Friday the appointment of Hongkonger Richard Ho as chief executive of Suzlon Energy Tianjin from December 1. Suzlon also has plants in India, the United States and Germany.

Ho was formerly managing director of venture capital firm Global Infrastructure Asia and was country manager at the Asia-Pacific units of American utilities Covanta Energy and Ogden Energy.

He said Suzlon plans to expand the capacity at its Tianjin plant, which began production in 2007, to 1,000 megawatts by the end of next year from 600MW. He said this will not involve much new investment since the expansion will come through the upgrade of its products' generation capacity from between 1.5MW and 2.1MW to 2.25MW.

'The expansion reflects the change in the centre of gravity of the wind turbine manufacturing business and our commitment to China,' he said.

'As quality of components improves, we also plan to use China as a hub for exports.'

Suzlon is reportedly planning to export 120MW of wind turbines from China to Brazil, but Ho said it is in the final stages of talks and no agreement has been sealed. He would not provide a geographical break-down of global sales, although chairman Tulsi Tanti was quoted by the International Business Times as saying in September that China accounts for 10 per cent of its global sales and this was expected to rise to 30 per cent by 2015.

Suzlon's China sales are projected to rise to between 500 and 600MW in the year to March 31, 2012, from 300 to 400MW in the 2011 financial year, Tanti said.

The company, based in Pune, in Maharashtra state in western India, is the world's third-largest wind turbine maker, with a 9.8 per cent market share, including that of German unit Repower it took over a year ago, according to BTM Consult. The combined group has 5,900MW of annual capacity.

Boosted by government financial incentives, the mainland's wind power market has doubled in size in terms of installed capacity in each of the four years to last year. It is the world's biggest market by annual installation - amounting to 13,800MW last year; and the second largest by total installed capacity - 26,010MW at the end of last year.

However, the growth has attracted more than 80 turbine makers to join the fray, most of which are small regional players. Price wars and rising scale of production saw turbine prices falling by an average of about 10 per cent in the past few years.

Domestic turbine makers have muscled out foreign makers despite the overseas companies setting up mainland production joint ventures to meet local content requirement.

The combined market shares of Denmark's Vestas, Spain's Gamesa, Suzlon and GE plunged from 53 per cent in 2006 to 11 per cent last year. Local players Sinovel Wind, Xinjiang Goldwind Science & Technology and Dongfang Electric saw their share increase to 60 per cent last year from 40 per cent in 2006. The remaining 29 per cent share is split between the small domestic makers.

Ho said the small players will fail or be bought out, adding Suzlon would not rule out buying them to realise its plan to establish manufacturing bases in wind-rich regions such as northeast China and the Inner Mongolia and Xinjiang autonomous regions.

He also said Suzlon's 15 years of operating and product performance track record, compared with about five years of its main mainland rivals, would help its competitiveness amid stiff price rivalry.