2010

SUZLON WIND ENERGY

International
Academy
of B Prasad
Management PGPM/0911/014
& 2009-2011
Entrepreneurship
 Suzlon Wind Energy
Limitations of the Report
Here two main management‟s functions namely MARKETING and
FINANCE are handled from the company‟s head office situated in
Mumbai so due to lack of information everything is not disclosed yet
maximum cooperation was extended Trade secrets which are to be kept
confidential were not disclosed yet maximum co-operation was
extended.

Introduction
COMPANY INFORMATION

Board of directors

Tulsi R Tanti Chairman and Managing director

Girish R Tanti Whole Time Director
Ashish Dhawan Independent Director
V Raghuraman Independent Director
Pradip Kumar Khaitan Independent Director
Ajay Relan Independent Director

Company Secretary
Hemal.A.Kanuga

Registered Office
“Suzlon”, 5, Shrimali Society
Near Shri Krishna Complex, Navrangapura
Ahmedabad-380 009

Corporate Office
5th,Floor Godrej Millennium
9,Koregaon Park Road,
Pune-411 001

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Branch Offices

 Bangalore
 Chennai
 Coimbatore
 Hyderabad
 Lucknow
 Indore
 Jaipur
 Kolkata
 Mumbai
 Madurai
 New Delhi
 Rajkot
 Surat
 Tiruvananthapuram
 Vadodara

Background of Suzlon
Suzlon has completed 25 years journey from farming to wind farming.
The seed of Suzlon was sown in the year 1978. Tulsi Tanti, a visionary, an
entrepreneur, a leader, a motivator completed his graduation in the year
1978.

The wide portfolio managed by Suzlon from 1978 to 1985 is as follows

Cold storage
Ice factory
Saree Painting
Construction
Stock Market

History of Suzlon
The Suzlon story began in 1995 with just 20 people; and in a little over a
decade has become an epic. A company of over 13,000 people,
operations across the America, Asia, Australia and Europe, fully
integrated manufacturing units on three continents, sophisticated R&D
capabilities and market leadership in Asia, ranked 5th in terms of global
market share.The seeds of the idea that became Suzlon was sown by Mr.
Tanti‟s venture into the textile industry just as it began in its booming
years.
Faced with soaring power costs, and with infrequent availability of power
hitting his business hard - Mr. Tanti looked to wind energy as an
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alternative. His first brush with wind energy was as a customer, having
secured two small-capacity wind turbine generators to power his textile
business. Many regarded this venture as foolhardy, with the capital
expenditure for the wind turbines exceeding his textile business itself!
But he had his sights on more than the immediate, having already seen
the potential of wind power and the global opportunities in the field.
Moving quickly, he set forth to acquire the basic technology and
expertise to set up Suzlon Energy Limited - India‟s first home-grown
wind technology company.
Suzlon began with a wind farm project in the Gujarat state of India in
1995 with a capacity of just 3 MW and has, at the end of 2007, supplied
over 6,000 MW world over. Suzlon has grown more than 100% annually
and registered a 108% growth, in the financial year ended 2007 - over
twice the industry average - in a supply restricted environment.

Milestone of Suzlon
1986-1990 Sulzer Synthetics
 Project Size : Rs.110 lacs
 Capacity : 500 MT
15 August, 1987
th

Textile Plant at Ankleshwar Commisioned

 Plant commissioned in record time
 Only the third of its kind in India
1990-1995 New Company Rechristened SUZLON
1992- Group Decides to go Public
1995-2000 Establishment of SUZLON ENERGY LIMITED
Technology partner identified in Germany- SUDWIND
October,1995- Agreement with SUDWIND finalized
for manufacturing 350 kW machine in India.
Trendsetter- Suzlon becomes a Tendsetter when 250
250 kW was the maximum size in the market, they
Launched 350 kW.

2006-2007 Suzlon commissions it first 1500KW Wind Turbine

Generator in Tamil Nadu.
2007-2008 The ISO/IEC 27001:2005 certification is awarded
2007-2009 To Suzlon Energy limited by Bureau Veritas Certification
(India) Pvt limited.The ISO/IEC 27001 standard is an
information security management system (ISMS)
standard published in October 2005 by theInternational

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 Organization for Standardization (ISO) and the
International Electrotechnical Commission (IEC).

The Name-SUZLON
SUZ- Vision of Intellectuals
LON- Financial Support
This means Vision of intellectuals combined With financial resources to
transform an idea into reality.

Vision Statement
 To be the technology leader in the wind energy industry.
 To be among the top 3 wind energy companies in the world.
 To be the most respected brand and preferred company for all
stakeholders
 To be the best team and best workplace.
 To be the fast growing and most profitable company in the sector.

Mission
 Minimum 20% Net Margin
 Minimum 50% Asian market share
 Minimum 60% Indian market share
 Minimum 25% Global market share
 Minimum 40% Growth.

Credentials & Accolades

 ISO 9001:2000 Certified
 Inhouse stringent quality control and audit
 Type certification by Germanischer Lloyd, Germany
 Type certification C-WET India/RISO Denmark
 All major components suppliers are ISO 9001 certified
 Third party International inspection for components and Assemblies
 Approved by Indian Ministry of Non-conventional Energy
Sources(MNES)
 SUZLON had collaborated with the German Wind energy leader
Sudwind for bringing in the state-of art technology
 World Wind Energy Award 2003 for extraordinary achievements in
the dissemination of the wind energy in India.

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 The foundation of Indian Industry and Economists have given the
“Corporate Excellence Award 2005”. The award is for “Life Time
Achievement” for “Best Renewable Energy Man of the decade” to Shri
Tulsi.R.Tanti
 “Champions of Composites Technologies” awarded by Composite
center International For Outstanding Contribution in application of
Composites materials and development of composite technology
 “Business Leadership Award 2002” by Solar Energy Society of India.
 Suzlon awarded the “Manufacturer of the Year” at the Wind India
Conference 2006 by the Power Stream Journal.
 Suzlon is awarded the “SAP Ace Award-2006 for the „Best Discrete
Sector Implementation‟ in the Engineering and Construction
Category.
 Suzlon is awarded the „ENPOWER Award-2006for Project
Management & Energy Efficiency and Sustainability by the India Tech
Foundation and Power stream Journal.

Corporate Social Responsibilities

 Eradicate extreme poverty and hunger
 Achieve universal primary education
 Promote gender equality and empower women
 Reduce child mortality
 Improve maternal health
 Combat HIV/AIDS, malaria and other diseases
 Ensure environmental sustainability
 Develop a global partnership for development
 Soil and water conservation

Financial Highlights
(Suzlon Energy Limited and its subsidiaries)

Particulars 2007-08 2006-07 2005-06 2004-05

Sales 13,679.43 7,985.73 3,841.03 1,945.48
Profit After Tax 1,030.10 864.03 759.50 365.34
Equity Dividend (%) 50 50 50 60
Net Worth 8,101.31 3,422.08 2,734.60 904.28
Earning Per Share 7.07 5.99 5.55 2.87
(Rs)

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 Sales-Rs crore
15,000.00 13,679.43

10,000.00 7,985.73

5,000.00 3,841.03
1,942.48
0.00
2004-05 2005-06 2006-07 2007-08
Profit After Tax- Rs crore
1500.00
1,030.10
1000.00 759.5 864.03

500.00 365.34

0.00
2004-05 2005-06 2006-07 2007-08
Equity Dividend (%)
70
60
60
50 50 50
50

40
2004-05 2005-06 2006-07 2007-08

9000.00
Net Worth-Rs crore 8,101.31
8000.00
7000.00
6000.00
5000.00
4000.00 3,511.08
2,734.60
3000.00
2000.00 904.28
1000.00
0.00
2004-05 2005-06 2006-07 2007-08
Earnings per share-Rs
8 7.07
5.55 5.99
6
4 2.87
2
0
2004-05 2005-06 2006-07 2007-08
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Overview of Wind Industry
The Emergence of Wind Energy

During the last few decades a number of governments have started to

increase their focus on clean and renewable energy sources. Having
committed themselves to substantially decrease their greenhouse gas
emissions, governments have seen wind power as a promising
technology with the potential of solving many of the environmental and
energy problems facing especially the
industrialized countries. The growth of wind energy has been fuelled by
this increased awareness of both public and private parties in
environmentally friendly energy technology .In the late 1970s the
increased awareness of environmental issues led to the strong anti
nuclear power movement at the same time as an energy supply crisis led
to greater focus being put on sustainable energy such as solar and wind
energy. As a result of this changing attitude towards renewable energy,
wind power has been the most rapidly growing renewable energy source
over the last decade (Figure 1). Despite this high growth, wind energy
development has been obstructed

Figure 1: Growth of renewable energies. Source: Wong (2005)

with high investment cost, market failures and substantial opposition by

established energy incumbents. Even though the cost of wind energy has
fallen rapidly it is still higher than that of conventional energy (Figure 2).
For these reasons substantial government involvement in the industry
development has been seen as necessary. This has mainly been done
through government supported R&D for the initial development and
government subsidization and incubation strategies. However,
implementing a successful technology policy 1 in an emerging industry is
problematic because of the high degree of uncertainty. As has been
pointed out by authors such as Maskell (1996) and Lundvall and

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Tomlinson (2000, 2002), the benchmarking or copying of already
successful technology policies is not likely to reap substantial benefits.
Even though the imitations of the policies are successful, the outcome
will differ because the policies and institutions interact with firms and
are rooted in distinct national and industrial settings. Given these
difficulties, it is remarkable that India has in a relatively few years
managed to position itself as one of the leading nations in wind energy.

Figure 2: Generating cost of wind energy and conventional power.

Source: Wong (2005)

Industry Structures and Developments

Top Ten Suppliers In 2007
% of the incremental capacity 19,791 MW

VESTAS(DK) 22.8%
GE WIND(US) 16.6%
GAMESA (ES) 15.4%
ENERCON(GE) 14.0%
SUZLON(Ind) 10.5%
Others 10.5%
SIEMENS(DK) 7.1%
ACCIONA (ES) 4.4%
GOLDWIND(PRC) 4.2%
NORDEX(GE) 3.4%
SINOVEL(PRG) 3.4%

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 GAMESA (ES),
GE WIND(US), 16.60% 15.40%

ENERCON(GE),
14.00%

VESTAS(DK), 22.80% SUZLON(Ind), 10.50%

SIEMENS(DK), 7.10%
SINOVEL(PRG),
Others, 10.50% 3.40%
GOLDWIND(PRC),
NORDEX(GE), 3.40% ACCIONA (ES), 4.40%
4.20%

CLIENTS OF SUZLON ENERGY LIMITED

INDIA 160MW, 5%
CHINA 586MW, 17%
SOUTH AMERICA 214MW, 6%
USA 1,910MW, 55%
EU 267MW, 8%
AUSTRALIA 317MW, 9%

AUSTRALIA,317M
W, 9% INDIA,
160MW 5% CHINA,
586MW, 17%
EU,267MW, 8%
SOUTH AMERICA,
214MW 6%

USA,
1,910MW 55%

Global shift towards renewable energy

Increasing energy demand
 Global GDP growth 4- 5%, double digit growth in India and China
 1.6 billion people globally living without electricity currently
 Global net electricity consumption expected to increase by 42% by
2015
 1,600 GW of new generation capacity required by 2015
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 Increase in cost of energy
 Uncertainty in oil and gas availability and prices
 Geopolitical disturbances
 Logistics challenges and costs in transporting fossil fuels
Global shift towards Renewable Energy (RE) sources
 Record investment for new capacity addition in 2005: US$ 38
billion
 Wind is second- largest RE source and commercially most viable
option
Wind – a mega trend in RE markets Wind energy harnessed by ~
70 countries
 19 countries globally installed >100 MW each in 2006
 Wind penetration 2006 : 74 GW installed, potential to reach 455
GW by 2016

Key growth drivers for wind energy

Cost Competitiveness
• Improvement in yields (cost/ kWh) by average 3% annually
• Cost / kWh of generation: US$ 0.03 - 0. 06
• Wind Energy directly competing with conventional power

Climate Change /Global Warming

• Kyoto Protocol: CO 2 emissions to reduce by 5.2% of 1990s levels by
2012
• EU declaration: 20% from RE by 2020
• US: 21 States declared 10% - 20% RPS
• China RE law: 5% by 2010 and 10% by 2020 from RE

Energy Security
• Hedge against geopolitical risks - local and secured supply
• No risk of fuel price volatility, frozen cost of power for utilities
• Socially, ecologically and economically sustainable growth

Increased Electricity Demand

• Energy - key to economic growth in developing countries
(India, China etc. welcome all energy sources to bridge gap)
• Wind‟s global contribution expected to increase from 0. 82% in 2006 to
4.04% in 2016

Cost Competitiveness
• Improvement in yields (cost/ kWh) by average 3% annually
• Cost / kWh of generation: US$ 0.03 - 0. 06

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• Wind Energy directly competing with conventional power

Wind Energy: Robust growth

 Annual installations in 2006 : 15,016 MW
 31% YoY growth
 Cumulative installations reached : 74,306 MW
 in 2006

Top 5 markets in 2006:

MW YoY Growth %
 USA : 2, 454 26.7
 Germany : 2, 233 12.0
 India : 1, 840 41.9
 Spain : 1, 587 15.8
 China : 1, 334 104.7
Cumulative installed capacity in MW

Global Wind: High Growth Scenario

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Key differentiators…
Vertically integrated manufacturer

Product Existing Expansion

Turbine India, China India
Rotor Blades India, China, US India
Gear Box Belgium Belgium ,India, China
Generator India India, China
Control System India, China India
Tower India India
Foundry & Forging India

Manufacturing Capacity

End-to-end wind energy solutions provider in India

Infrastructure development
• Wind resource assessment
• Land acquisition
• Evacuation facilities / substations

Technology development
WTG and Component manufacturing

Project construction and execution

• Installation and erection
•Commissioning

Operations & maintenance

• Lifetime services

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Group Management Team
Group
Management
Team

Group
Management
Staff Function

Technology Manufacturing Sales & Project

Product
Nacelle India
Development

Technical
Rotor Blades International
services

Innovation Tower USA

Generator Europe/RoW

Gear box China

Forging, Foundry
Aus/Nz
& Machining

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Material Flow Chart

Customer Requirement

Demand Creation (SAP)

MRP Run (SAP)

Planned Orders
Purchase
Requisition
Production
Order
Purchase Order

Material Issue
Material Receipt

Material In Process
Quality Inspection (Consumption)

Convert
Stock updation Finished Good

Quality
Inspection

Packing

Dispatch

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Production Planning and Control Department
Production planning and control department is the mediation between
marketing and production department. There is ABP (annual business
plan) given by the marketing department in the month of March for
whole year production. Thereafter, they prepare other sub plans based
on the requirements of their customers. Their customers are from USA,
Australia, and Europe. On the basis of this plan PPC department
prepares other plan and that is circulated to different departments like
purchase, production stores, materials, accounts etc, then the approval is
taken from all these departments. Requirements of the customer vary
because of the varying frequency requirements of different locations.
PPC department mainly see that the requirement of customers are
fulfilled by manufacturing the required orders. Firstly the demand is
uploaded in the SAP R3 then according to the type of materials that is
A,B,C the purchase requisition is created. For “A” type of materials
“SNP” is created and for B,C “MRP” is created.
According to the purchase requisition (PR) created in SAP purchase
order is created (PO).As per the purchase order the materials are
imported from the vendors which undergo the quality inspection.
PPC department also does the function of
 Materials follow-up
 Rejected materials SAP report preparation
 Replacement of the rejected materials
Suzlon’s major vendors include
 Luoyang- China
 Hansen -Belgium
 Lang -German
 Giva -Switzerland
 Schaeffler- Germany
PPC department is an intermediate between plant and engineering
department.
The total strength of this department is of about 9-10 members, those
are junior engineers. The department is operated under the supervisory
of Mr. R.B Patil who sits in the head office (Pune). Under the guidance of

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Mr.Ashutosh Thorat (Manager Purchase Planning) the engineers
working at the Daman plant Unit V report.
This department also undertakes the activity of retrofitting that is incase
of unavailability of the key components the order is fulfilled by
assembling the other components at place and the key components are
assembled later at the site of installation or mounting. Retrofitting is
carried out for cost effectiveness as well.
PPC is an operating department. It is the nerve system of the entire
productive system,

The following chart would explain the importance of this

department in Suzlon Energy Ltd.
R & D department
(Product design)
Marketing dept
(Product structure/design documents)
PPC department Industrial
Purchase and (Manufacturing engineering dept
stores dept
documents)

Manufacturing depts..
Maintenance -fabrication Inspection and
dept -Assembly Quality control dept
(Assembled products)

Final inspection and

acceptance testing
(Finished goods)

Packing and dispatching

of finished goods

Distribution to customer
through channels of
distribution

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Production Process (Assembling Process)
± Yaw Assembly
o Yaw base cleaning
o Mounting of Gear RIM
o Mounting of Plates
o Yaw drives fitting
o Fabrication component fitting

± Girder Assembly
o Girder fittings
o Fabrication component fitting

± Gear box Assembly

o Fitment of Rotor shaft
o Fixing of Gear Box Assembly into Yaw Base
o Fixing of Filter Unit and Lubrication Unit

± Bearing assembly
o Rotor shaft cleaning
o Bearing housing cleaning
o Assembly of bearing housing into rotor shaft

± Generator Assembly
o Mounting of Generator and alignment

± Panel preparation (Pitch and Control)

± Nacelle cover wiring assembly

o Fixing of panels
o Cabling

± Testing of Nacelle

± Nacelle cover fitting

Third Party Inspection

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Quality department team structure

Senior manager
(Yogesh Sharma)
Mechanical,
Electrical,
Electronics

Assistant
manager(Electical)

Senior engineer
(Mechanical/Composite)

Jr.engineer (Mechanical) Jr.engineer (Electronics)

Purchase Department
The purchase department plays a very important role in SUZLON
because purchasing has its effect on every vital factor concerning the
manufacture, quality, cost, efficiency and prompt delivery of good to
customers. Its function is to procure materials, supplies, services,
machines and tools at the most favorable terms consistent with
maintaining the desired standard of quality.
The functions of this department include:ss
Vendor development
Invoice parking
Invoice posting
The main function of the purchasing department is First is register
suppliers. Second is placing the purchase order.
REGISTRATION OF SUPPLIERS:-
- The suppliers are send the registration from
- The respective buyers are identified.
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- Scrutinize the information provided by supplier
- Arrange for a visit by concerned personnel if necessary.
- Forward the recommendation to the plant head for decision regarding
approval.
- Include the name of approved suppliers in the list of suppliers.
Once the suppliers are registered then the orders are placed with them
Purchasing information and Track on Raw Material inventory:-
- Receive monthly production plan from production planning and
control department and information about the stocks from the stores
department.
- Estimate the order to be placed.
- Prepare purchase order giving details of schedule, quantity price,
description of items, and important quantity requirement.
- Ensure that purchase orders are reviewed for adequacy and approved
by before release to supplier.

Commercial Department
The main functions carried out by this department are as follows
 MIS
 Insurance Monitoring
 Variance Analysis
 Statutory Audit
 Inventory Management
 Dispatch Documentation
 Cash Management
 Payment Management
 Invoice Verification
 Job Work Reconciliation

The total strength of this department is of 3 people who with great

responsibility handle the smooth working of its department.
It is a service type of department.
The functions carried out by this department can be described
as under

MIS
In this various reports from SAP are prepared for submission to
management. These reports include reports like
 Stock Analysis Report
 Consumption Variance Report
 Production Dispatch Report
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  Expense Analysis Report and the like.

Insurance Monitoring

It aims to arrange survey of incidences

It coordinates with insurance cell for paper work
It further monitors status of claim lodged.

Variance Analysis

In this field of work commercial department prepares report of Variance

Analysis on monthly basis.
It also highlights and rectifies the errors in materials issue
It aims to get the report audited from external auditors.

Statutory Audit

In this function it sees to it that various reports are prepared as per

recommended audit.
It then presents the reports in front of auditors and satisfies queries
raised

Inventory management

In this function of commercial department it monitors materials

movements happen in the plant.
It defines SAP for new transaction.
It facilitates material handling and management for smooth functioning
of plant.

Dispatch Documentation

In this it verifies the documents received from Logistics department.

It prepares delivery challan (DC) & necessary document for removal of
materials from plant.
It further keeps record of documents prepared.

Cash Management

Here it carries out activities like collection of cash from bank

Disbursement of cash.
Recording of transaction in SAP
It ensures cash availability and matching of physical versus book cash.

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It coordinates with HO for cash requirement.

Payment Management

Here it prepares payment advice and forwards the same to the HO.
It keeps track of check received and disbursed.
It keeps an eye on follow up for payments.

Invoice Verification

In this task it verifies terms and conditions mentioned in invoice with PO

and GRN.
It further undertakes the entry of invoice in SAP
It further keeps record of invoices forwarded.

Job Work Reconciliation

In this it prepares the statement of materials sent and consumed by job

worker.
Reconciliation of materials consumed by Job worker against
standard consumption.
Parking of job work invoices in SAP.
Record Maintenance.

Research and Development

Sound research and development is the key to technology leadership. The Product
Technology Division provides comprehensive research and development
solutions lending all necessary technical support to the organization.

Comprising of India and Europe‟s most renowned wind energy

engineers, our R&D team combines global experience of varied wind
regimes with in-depth knowledge of available turbine technologies.

Backed by technological expertise of Europeans and hands-on

knowledge of Indians SUZLON produces some of the most efficient,
robust and reliable wind turbines available in the world today.

The Wind Turbine Generator research and development centres are

based at Rostock and Berlin, Germany.

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Suzlon Energy GmbH carries are R&D with its focus on innovation, to
design world class Wind Turbines. The designing team‟s prime objective
is to provide technological leadership to Suzlon in collaboration with our
manufacturing, installation and maintenance teams around the world.

Marketing Department
Our global team spread across four continents brings the world‟s best
practice and local expertise together to fuel continous growth and propel
expansion in high potential markets.
At suzlon we combine global experience with local expertise to maximize
techno-economic value for our clients.

Business Model
SUZLON provides turnkey solution in wind power generation
business by integrating ;
 Design
 Manufacturing
 Installation
 Operation
 Maintenance
 Financial assistance
 Erection & commissioning

Marketing Incorporates
Scheduled Service Functions
 Preventive maintenance(Quaterly/ Half yearly/yearly)
 Breakdown maintenance
 Generation
 Security
 Liaison

SWOT ANALYSIS
STRENGTHS
 Strong management team
 Global production platform and access to an integrated
manufacturing base.
 Track record of executing large-scale wind power projects
 In-house technology and design capabilities

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  Cost-efficient manufacturing and supply-chain
 Operations and maintenance expertise
 Focus on providing “integrated solutions” wind energy packages
to customers in India.

Integrated Business Model

Wind resource Access roads, WTG & com- EPC project

Assessment Power evacuation Ponents Execution
& & grid
land Interconnection
design, Installation
& development comissioning
power lines

conceptualization infrastucture Equipment supply Services

WEAKNESS
 Lack of availability of space for warehousing

OPPORTUNITY:
 Global warming awareness has created sense of responsibility
towards saving the environment among world corporate and
public. Which is major factor for growth of companies like
SUZLON
 Government policies towards non-conventional energy make
companies product more affordable and viable as far as Return on
investments are concerned

THREATS:
 The demand for wind power projects is primarily dependent on
the demand for electricity
 The viability of wind power projects is dependent on the price at
which they can sell electricity
 The viability of wind power,and wind power projects is
dependent on wind patterns.
 Wind power cannot be considered as base load source of
electricity

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Conclusion
 In a giant company like Suzlon which is fastest growing in wind
sector, work is carried out in a very systematic, sophisticated &
technical manner.
 Today‟s world is full of competition, which has become more
prominent and distinct in this period of globalization and thus each
aspect of the company needs attention to survive, retain and grow in
the market.

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