Indian stock market flotation this year -- Suzlon going places

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The world's sixth largest wind turbine manufacturer, Suzlon Energy, is heading for a stock market listing in New Delhi, India, this summer. The decision is based on a desire to give the company a broader public profile, says Per Hornung Pedersen, head of Suzlon's international activities. While the Indian company feels it has been positively received in the wind business, it has also met with a "healthy professional scepticism," says Hornung Pedersen.

Suzlon was founded in 1995 and in 2004 reported revenues in excess of $400 million. Its share of the global market has grown from 0.8% in 2002 to 3.9% in 2004 and it now employs nearly 3000, according to the latest World Market Update of wind energy development by Denmark's BTM Consult.

Suzlon's international activities are run from the company's Danish division, set up last year. It is firmly entrenched as Asia's leading turbine supplier with an existing base of some 785 MW of wind capacity installed -- all but 23 MW in India. Last year the company's entire production of turbines was sold in India, reports BTM Consult.

The company is keen, however, to expand outside the Indian market, with its sights primarily fixed on the United States, Australia, China and specific European countries. "We have established companies in all those markets," says Hornung Pedersen, who was previously a member of NEG Micon's management. "We aim to be among the top five world manufacturers within the next couple of years."

Suzlon has deliberately chosen not to target markets such as Germany and Spain where competition among manufacturers is already fierce, he adds. For this reason it has not been affected by the shrinking German market in the same way as its competitors. "We haven't experienced any kind of low point," he says.

In Australia

Suzlon's most recent foreign foothold is in Australia, where it inaugurated an office in Melbourne, Victoria, on March 31 to serve the Australian and New Zealand markets. The expansion into Australia is a logical step, says Hornung Pedersen. He describes the market as a prime candidate for Suzlon technology. "The support is there and the wind climate is there, so the fundamentals are in place," he says. "Our turbines are strong, rugged and reliable and built to resist heat, dust and extreme grid conditions and as such perfectly suitable for the rough Australian conditions. But it's part of a larger strategy."

Suzlon has watched the development of the global market carefully, says Dan Kofoed Hansen, who will head up Suzlon Energy Australia. "When you look at the big players, in Denmark the market has vanished. Germany is also saturated. Those players are becoming independent because you cannot depend on one market. India is booming but it is not wise to have all your eggs in one basket," he says.

"We are looking at a larger geographic area to hedge our bets. New Zealand is very attractive right now and we are looking longer term at South East Asia. One way or the other the industry will grow and that will be handled by a handful of players." Suzlon, he says, aims to be one of them. "Danish technological competencies and management skills and Indian know-how, that's a strong combination."

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