Tulsi Tanti: The Harnesser of Winds

Every entrepreneur has a story to tell. Tulsi Tanti has two. The first story involves a particular electricity bill, which he received sometime in 1995. He was running a textile company, Suzlon at the time that produced good polyester yarns, but erratic and costly electricity was turning whatever profits he could earn into losses. "Time to time we were innovating in all the areas to bring down the costs, but we weren't able to control the price of power," says Tanti. Commissioning two windmills to supply electricity for the family's factory in Gujarat, on India's west coast, he realized that he had stumbled upon a potentially new business domain where nobody in India had gone before. In a power-starved nation, renewable energy was sure to have a favored future. His second story is set in 2000, when he read a report on global warming, predicting that some of places in the world (which included his favorite tourist destinations) would be submerged under water by 2050. Tanti realized his fate lay far beyond the latest advances in synthetic fibers. "I had a very clear vision," he says. "If Indians start consuming power like the Americans, the world will run out of resources. To save energy in the future, either you stop India from developing, or you find some alternate solution." That was when it struck him, again: If wind was the answer to Suzlon's energy needs, then why couldn't it fuel the growth of other industries? By 2001, Suzlon had sold off its textile manufacturing and plunged into the new field of wind-turbine generators. Today, with factories on four continents and wind farms across Asia, Suzlon is the fourth largest wind-turbine maker in the world. A commerce graduate and a diploma holder in mechanical engineering, Tulsi Tanti hails from Rajkot City of Gujarat and is presently based in Pune, Maharashtra. He, along with his three siblings, own 58 percent of the company. His first venture, which was into textiles, was called Sulzer Synthetics Pvt. Ltd., a name later changed to Suzlon Synthetics Ltd. and then to Suzlon Fibres Ltd. Thereon, he moved into wind energy production with the name of Suzlon Energy. Tantis company was worth $930 million according to the Forbes magazine in November 2008. Tantis company had a humble beginning with just 20 people; today it has more than 10,000 employees from all over the world. Suzlon is the worlds fifth largest wind-turbine manufacturer. Suzlon has a market share of around 10.5 per cent in the renewable energy sector. Suzlon has

presence in 20 countries including USA, UK, China, Australia, Netherland, and New Zealand. Suzlon is building the largest wind energy park in Asia. Suzlon Energy makes the machinery that turns wind into electricity. Now situated in Pune, a city known for its engineering skills, Suzlon is a prime example of India's emerging story in manufacturing, a story lesser known than the much-celebrated technology-services tale. A fellow Pune billionaire, Baba Kalyani, has built Bharat Forge, which makes auto chasses, into a global company. Tanti is shaping a similar destiny for Suzlon. His company already ranks as the world's eighth-largest producer (in terms of installed capacity) of wind-turbine generators. Tanti is aiming high and wants to close the gap with Suzlon's biggest European competitors, Denmark's Vestas Wind Systems, Germany's Enercon and Spain's Gamesa. Windmills have their drawbacks: They make a fierce racket and are eyesores. Objections from neighbors are enough to kill off some wind farms. The obvious question is, couldnt this be a big problem in a densely populated India? Not as much as you would expect. India has, in fact, large tracts of open land in rural areas. You need 15 to 20 acres of space to produce one megawatt of electricity at peak capacity. Suzlon has built Asia's largest wind farm, at 500 megawatts, near Kanyakumari, situated at India's southernmost tip. The blades feed off a 15-mph trade wind. The venturesome spirit that drives Tanti now was what set the Suzlon train in motion. Spurning their father's construction business in Gujarat, Tanti and his three siblings moved into textiles in the 1980s. They started processing polyester yarn, and then graduated to making furnishing fabrics. The decision to shift again, into wind energy, was a brave one. The industry was in the dumps, as it had been given a bad name by unscrupulous companies that lured customers with the bait of tax breaks. Projects were ill-conceived, often left incomplete with no maintenance or service support to speak of. Banks wizened up and stopped lending to wind-power companies. The brothers saw the opportunity for a producer to not only build the wind-turbine but also provide maintenance and service for the same. The experience seems to have kept the brothers judicious in their decisions. "We have a common store, but our kitchens are separate," is how Tulsi Tanti puts it, though even today they host each other frequently at their respective flats. Selling some family property, the Tantis put together $6,00,000 as seed capital to start Suzlon. They shopped around for technology in Europe, but no one was willing to give it without having an equity stake in the venture. Finally Sudwind, a small German company, agreed, provided Suzlon bought ten turbines. Tanti convinced IPCL, an Indian petrochemicals company that had been supplying raw materials for his yarn business, to sign up as Suzlon's first customer. Suzlon completed IPCLs 3.5-megawatt project, using Sudwind's turbines to meet a three-month deadline. Tanti claims that ten years on, this first wind farm continues to run at 97 percent efficiency. But the brothers, three of them engineers, wanted to prove their technical prowess by producing their own turbine. Their research efforts got a boost when, ironically, Sudwind went bust in

1997. They hired Sudwind's engineers and created an R&D center in Germany. The subsequent acquisition of a manufacturer of rotor blades in the Netherlands rounded out the business. By 1999, Suzlon had introduced its partly homegrown turbine into the market. Today the company has researchers in Germany, the Netherlands, and India looking for ways to squeeze more juice out of the air. At the same time, Tulsi Tanti is consolidating his hold on component suppliers. In March, Suzlon acquired Hansen Transmissions International, a Belgian maker of gearboxes, for $565 million. --------------------------------------