India

India

Suzlon CEO charts overseas re-entrance

INDIA: On top of the burgeoning domestic market, the CEO of manufacturer Suzlon is once again turning his eyes to other regions.

Suzlon CEO JP Chalasani
Suzlon CEO JP Chalasani

Like other major OEMs, Suzlon has recognised the need to spread its activities wider  to secure notable growth.

Suzlon has an international history. It previously owned German manufacturer Senvion supplying onshore and offshore markets in Europe and had business units across the Americas.

But in the middle of the decade, Suzlon shifted to focus on its position in India.

Senvion was sold to US investment firm Centerbridge Partners in 2015, and the company closed its Brazilian business unit July 2017.  

Now, as the market in India struggles in the shift to a auction-based procurement system, Suzlon’s CEO JP Chalasani has indicated a desire to re-enter the overseas markets.

"We began re-looking at getting back into international markets from last year and we have already strengthened our organisation and also appointed a new chief executive for this. We hope to get some global bids from the next quarter," Chalasani said in an interview with Indian news agency PTI.

"There was a time our exports were more than our domestic revenue. Then we went through a financial crisis forcing us to slow down our international business and stabilise whatever assets we have.

"But now that we have regained our market position, we are planning to re-enter international market shortly," Chalasani told PTI, indicating the US and Europe as areas of interest.

Chalasani added, however, the company would take a more cautious approach to its global expansion on this occasion.

Domestic concerns

In May, the company reported a net loss for its 2018 financial year of INR 3.84 billion ($56.9 million). Revenues also fell by a third to INR 84.13 billion.  

It was hindered by lower sales volumes caused by a shake-up of the Indian industry with the introduction of auctions.

The new system saw prices crater taking utilities off-guard and practically freezing deployment.

Suzlon said in May it was confident of a recovery, given the sizeable contracts secured as a result of the auction rounds.

Chalasani reiterated this to PTI: "So far, 7,500MW has been awarded under [federal auctions rounds] I, II, III, IV plus Maharashtra, Gujarat and Tamil Nadu put together. Of this, we have the largest market share of close to 25% of the tied-up capacity.

"Keeping that in mind, I don't see why we won't maintain our lead position in terms of billing and bidding and maintain 25% share of the total bids awarded," he said.

Chalasani was also confident the company’s financial position will improve on the back of a market recovery.

"We will bring down our debt by 30-40% latest by December 2018 through asset monetisation. As of March 2018, our net debt stood at INR 60 billion ($877 million)," Chalasani told PTI.

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