Suzlon Energy Limited

Chandra M Verma PGPM508_56

04/11/23

1. Global Wind Turbine Market

2. Impact of Financial Meltdown

3. Snapshot – Suzlon Energy Ltd.

4. Growth Story – Suzlon Energy Ltd.

5. Competitors

6. Porter’s Five Force Industry Analysis

7. SWOT

8. Corporate Strategy

9. Business Strategy

10. Global Strategy

11. Challenges

12. Recommendations

• Crisis Deepens in 2009, early 2010• Long‐Term Forecast: Annual MW added rises to over 60 GW by 2020• CDM would be a driver for the market• Opportunity in Onshore wind market

-Brazil, Chile Pushing Latin America Wind Forward- State‐Driven Project Tenders in Egypt and Morocco Lift regional growth

• Offshore Wind Market -Europe and UK Offshore wind market is growing- Untapped potential in North America (United States, Canada)and Asia Pacific (China, India)

• New manufacturing facilities are coming up• Favorable policies can play key role

Source: RENEWABLES GLOBAL STATUS REPORT | 2009 Update

Source: RENEWABLES GLOBAL STATUS REPORT | 2009 Update

• De-growth in industry’s sales

- Slowdown in US and European markets in 2009

- China may be major growth market

• Pricing pressure and raw material cost decline

• Availability of debt funds

• Deal sizes have shrunk

• Latent demand strong but subdued due to funding uncertainty

• Implementation of stimulus packages in various large markets awaited - demand resurgence should take hold

• Slow improvement in orders being placed industry-wide in current year

• Delays in funding and implementation of incentive programs can result in

risk to projected growth

Products:1.Control equipment2.Gearboxes3.Nacelle covers4.Rotor blades5.Towers6.Wind turbine generators

Services:1.Installation services2.Operation and maintenance services3.Site identification and development4.Wind resource mapping

• Company founded 1995 in India

• 5th largest wind turbine supplier world wide

• Presence across 5 continents and 14 countries

• 15,000 employees – installed 5600 MW+

• R&D in Germany and Holland

• Production facilities in India, China, Belgium and USA

• End-to-end supplier of high quality wind turbines

• Extended product programme and technologies through acquisition of Repower and Hansen Transmissions

Diffusion of knowledge•Acquired the technical know-how through licenses and purchasing of smaller wind technology companies

Resource mobilization •Leveraged factor costs - availability of low costs resources, labour and other infrastructural facilities

Vertical Integration•To reduce supply chain bottlenecks and ensure quicker delivery to customers

Mergers and Acquisitions•complementing its key strengths •synergistic with its operations, and•have manageable integration risks

Top Tier Turbine OEMs

• Vestas

• GE Energy

• Gamesa Eólica

• Enercon GmbH

• Siemens Wind Power

• Acciona Windpower

• REpower Systems AG

• Goldwind Science and Technology

• Sinovel Wind Co

• Nordex AG

• Dongfang Turbine

Porter Five Forces

•Develop next-generation products with focus on improving efficiency/cost-per-kWh

•Increasing production capacity and strengthening vertical integration

•Augmenting Management Bandwidth

•Strong focus on driving global growth

•Moving up Value Chain with comprehensive end-to-end solutions

Integrated Business Model

•Allows customers to benefit from cost efficiencies and economies of scale in wind farm

•Provides hassle free solutions to customers

•Provides greater control over execution time line

•Control of value chain from planning to maintenance

•Leveraging experience across wind energy value chain

•Research and Development – Best of all World

•Vertical Integration

•Right product for the right market

•Presence in high growth markets

Expanding Global Presence•Australia - Sustainable and internationally competitive renewable energy industry•USA – It has outpaced Germany in terms of capacity•China - Favorable policies & targets•Foray into new markets – Brazil and Sri Lanka•India – Robust domestic demand

Global Manufacturing Capacity•Manufacturing facilities in India, China, USA, and Germany•Suzlon has acquired forging and foundry capacity in India

Global AcquisitionsHansen Transmission•Plugs critical gap in suzlon’s supply chain (gearbox - longest lead time)•Develops long term growth driver in terms of wind and industrial gearbox businessREpower Systems AG•Entry into large European markets•Complimentary product portfolio - offshore technology•Improve REpower margins through synergy•Capitalize on know-how and brand equity

1. Transition to being a global supplier• Suzlon has negative operating leverage

- high start up costs for manufacturing facilities - increased freight cost

• Growth has been fragmented among a growing number of smaller, more dispersed markets

2. Increased uncertainty on Order Intake – Technology Issues• Blade crack issue - Incremental order intake from US will be

challenging• Order sizes have shrunk - Credit availability, which could impact

demand

3. Large capacity + Weak demand = Margin PressureIndustry majors are adding ~13,000MW

- pricing power will shift towards wind farm developers- supply exceeding demand in the medium term

4. Working Capital Management• Huge inventory hold-up • Poor collections

•Sustained R&D efforts

•Synergize with Repower

•Reduction of inventory levels and focus on improving collections

•Focus on offshore markets

•Special attention to Chinese market

•Leveraging on cost advantage (through backward integration and control on the supply chain)

•Diversify into other renewable technologies like Solar PV and Biomass