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Suzlon is a leading global wind power company based in India. It reported a consolidated loss of 1.88 billion rupees for the first quarter of the year due to weak demand from Europe and the US. Sales volumes fell significantly compared to the previous year, and the financial crisis has made it difficult for companies in Europe and the US to raise funds for renewable energy projects. Despite the losses, Suzlon's chairman said they have made progress improving order pipelines worldwide and reducing debt over the past year.

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27 views3 pages

Ion Structure

Suzlon is a leading global wind power company based in India. It reported a consolidated loss of 1.88 billion rupees for the first quarter of the year due to weak demand from Europe and the US. Sales volumes fell significantly compared to the previous year, and the financial crisis has made it difficult for companies in Europe and the US to raise funds for renewable energy projects. Despite the losses, Suzlon's chairman said they have made progress improving order pipelines worldwide and reducing debt over the past year.

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guptaritesh30
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ORGANISATION STRUCTURE

Suzlon is a leading wind power products and services company with a global footprint. The
primary principle shaping the organisation’s structure across global operations is to infuse
momentum and flexibility in decision-making and execution, with empowered managers.

REASONS FOR LOSSES:

India's largest wind turbine manufacturer Suzlon Energy yesterday reported a consolidated loss of 1.88bn
rupees (£28.3m) for the first quarter of the year, blaming weak demand from Europe and the US for the
performance.

Shares in the company fell by almost eight per cent on the news of the unexpected loss, which compared
unfavourably with the 3.15bn rupee profit that had been recorded for the same period in 2009.

Sales volumes for the full year to March fell to 1,460MW from 2,790MW a year ago, lower than the earlier
forecasted sales of 1,900-2,100 MW for the year.

Companies in Europe and the US have postponed orders for wind turbines as the financial crisis makes it
difficult to raise funds for renewable-energy projects, the firm said in a statement.

"This has been a difficult year for the wind industry," said chairman and managing director Tulsi Tanti.
"While market conditions continue to be challenging, we have made encouraging progress and are
working on improving order pipelines the world over."

The company also announced that Sumant Sinha, Suzlon Energy's chief operating officer, is leaving the
company effective tomorrow to set up his own financial advisory consultancy.

Despite the performance, Tanti predicted in an interview with Bloomberg earlier this month that demand
from the Asian market and offshore wind projects in Europe will result in orders increasing by at least 20
per cent over the next five years.

The company also reported that it has reduced its net debt position by 2bn rupees to Rs 9.7bn rupees
from 11.8bn rupees a year ago.
In addition, the company refinanced its existing rupee-denominated term loans and working capital loans,
through new facilities from a syndicate of 22 banks, for a total of 10,624bn rupees ($230m), according to
the statement.

And the firm has approved a rights issue of its equity shares to existing shareholders to further reduce
debt.

"We have maintained a strong focus on improving the operating efficiencies and optimising our capital
structure in the face of a challenging external environment," said chief financial officer Robin Banerjee.
"Over the year, we have made progress on many fronts including reduction of net debt and net operating
working capital, as well as bringing down cost at various levels."

Suzlon is one of Asia's leading clean tech success stories, having started operations in south India in
1995 with just 20 people before growing to reach a manufacturing capacity of 4,200MW a year at the
height of operations two years ago, accountgin for around 10 per cent of the global wind turbine market.

However, like many specialist wind turbine firms the company is now facing growing competition from
both emerging rivals in China and established engineering conglomerates such as GE and Siemens.

“SAP has been instrumental in managing Suzlon’s dramatic growth - it has provided the
strong back end support that gave the company the confidence to go public and meet
stringent compliance needs.”
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