Initial report

INITIAL REPORT
ON

A
FORGING UNIT
OF

SUZLON ENERGY LTD

SUMMER INTERSHIP REPORT -2010

INITIAL

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INDEX
Sr. No. particular Page No.
1 COMPANY PROFILE 3-10
1.1 history 3
1.2 growth and development 7
1.3 bench mark and milestone 9
1.4 vision mission and values 10
2 FUNCTION AREA 11-17
2.1 MARKETING 11
2.1.1 product portfolio 12
2.2.2 distribution network 16
2.6.6 market share
2.7.7 competition 15
HUMANRESORCE
2.2.1 organization chat
2.2.2
FINANCE DEPARTMENT
INTRODUCTION 23
RATIO ANALYSIS 24

ORGANIZATIONAL AND GROUP STRU. 25-26

4 ENVIRONMENTAL FRAMEWORK 32-34

4.1 economical
4.2 political
4.3 social
4.4 technological
4.5 legal

5 MODEL APPLICATION 35-38

5.1 strategy advantage profile
5.2 Portal’s five force model
5.3 ETOP
5.4 BCG model
5.5 value chain

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History:

Suzlon's wind energy business traces its roots back to the incorporation of Suzlon Energy
Limited in 1995 by the venture of Mr. Tulsi R. Tanti. The company along with its subsidiaries
engages in designing, developing and manufacturing of wind turbine generators and related
components such as rotor blades, control panels, nacelle cover, tubular towers, generators and
gearboxes. Further, the company also provides consultancy, design, manufacturing,
installation, operation and maintenance services as well as is involved in wind resource
mapping, identification of suitable sites and technical planning of wind power projects. The
company principally operates in India, China, The Americas, Europe, New Zealand, South
Korea, South Africa and Australia. Suzlon has since grown to become the world's fifth leading
wind turbine manufacturer with 10.5% of global
Market-share and the leading manufacturer in Asia and India. The company has registered
100% year-on-year growth for the past five consecutive years, achieving leadership in India
and then becoming the leaders on the global stage. Suzlon is today a leading force on the wind
energy stage, generating revenues of USD 2,311 million in FY08 and supplying over 7,000
MW of wind turbine capacity around the world. In just over a decade since Suzlon was born,
the company has grown to over 14,000 people around the world with operations in over 21
countries across five continents. The company has forged ahead with an ethos of innovation in
everything that it does. This has led to pioneering approaches and offerings such as a fully
vertically integrated value chain, leveraging local expertise and global experience, an 'end-to-
end solutions' model and highly customized products – all contributing to make Suzlon the
highest-growth, highest-margin wind turbine maker in a highly competitive environment.
Suzlon's design, manufacture, operations and maintenance services have been certified as ISO
9001:2000 by Det Norske Veritas. It has a strong presence in the BSE as well as a part of S&P
CNX Nifty Index (NSE) that shows investors’ satisfaction towards the company and the
stability of its stock in the financial market.

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ABOUT SEFORGE( SUBSSIDARY OF SUZLON)

Name of company:
Seforge ltd

Forms Of Business Organisation:

Public ltd company

Registered Office :
5 shrimali society,

nr shri krishna complex,

navrangpura ahemdabad gujarat india

Corporate office :

5th flooor fodrej millenium , 9 koregeon park road

Pune-411-001 india

Board Of Director
Tulsi R Tanti- CMD

Girish R Tanti – Executive Director

Ajay Rehan – Independent Director

Ashish Dhawan – Independent Director

Pradip Kumar Khaitan- Independent Director

V.Raghuraman – Independent Director

Company Secretary-
Hemal a konuge

Auditors-

snk & co.

e-2 b the fifth avenue dhole patil road nr .regency

hotel pune

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CharteredAccounts.
R botliboi and co. ,

CA C401 4th floor panchsil tech park,

yewada bosco school pune

Banker
Bank of baroda

Bank of maharashtra

Sbi

Axis

Icici

Pnb

Registrar And Share Transfer Agent :

Karvy company share pvt ltd

17, 24 vittal rao hanger madhapur hydrabad india\

Website
WWW.SEFORGE.COM

Division :
Machinery shop

Forging shop

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About Company:
Behind the success of SEFORGE are our people most valuable assets our people. A trained skilled
and dedicated work force work under expert hands to deliver superior solutions each person know
that he can an important cog in the wheel of SEFORGE’s delivery cycle he knows that the
contribution to the large goal of the company and works hard to put in his best. The continuous
striving for excellence is a way of life at SEforge through various induction program and training
sessions we train our people to excel, at seforge we call it the “passion is excel”

Seforge incorporated in the year 2006 is a company funded on solid goal beliefs and value as
we embark on the journey to becoming the preferred goal supplier and casting and forging we
follow a single minded goal of excelling in everything we do

We are equipped with some of the best and the most latest and advanced facilities in the
worldwith capability to produced the highest standard of casting products along with our expert
team of engineers and advisors we are all set to become the [referred of casting and forging
solutions globally

Seforge product cater to wide array of product and industries ranging from

Wind energy, Defense machine tools, aerospace oil and gas power, heavy construction
equipment many more

Casting

Seforge foundry was created with the goal to become the global benchmark for quality casting
by using modern technology efficient processes while meeting environmental requirement the
foundry makes large complex ductile and grey iron casting in the weight range of 1000kgsto
55000kgs These casting are delivered fully machine and painted ready for assembly The
foundry located in Coimbatore India is well connected to the Indian parts of cochin Chennai
and tuticorin

Sand mixture

Movable and stationary PLC controlled continuous sand mixers ensure the quality of mixed
sand

50 MT per hour-3 nos.

25MT per hour -7 nos.

Sand reclamation plant

Our environment friendly sand reclamation plant has capacity to claim 90% of the use sand

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Mould and core coating system

Flood coating system for coating of moulds and cores ensures optimal coating thikness

BUILT TO SATISFY

Spread over a sprawling 240000 sq.mtr land area seforge foundry is one the largest fully
integrated foundries in the country with an annual manufacturing capacity of 120000 tonnes of
fully processed and finished casting we are well equipped to meet the requirement of our
customers on quality , quality & delivery

Growth and development:

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Mile stone:

Benchmark:
2008-09

Harvard Business School concludes a case study on Suzlon - 'The Suzlon Edge'

Hon'ble Michael Rann, Premier, South Australia, inaugurates AGL Hallettwindfarm

Suzlon Energy Ltd Blade Testing Centre, Vadodara, India conducts the first blade static test

Suzlon Energy Ltd is certified ISO/IEC 27001:2005 compliant by Bureau Veritas Certification
(India) Pvt. Ltd.

2007-08

Suzlon Energy Ltd enters Kerala with its first Wind Power Project commission of S52-600 kW
turbine at Agali

Suzlon Energy Ltd secures its maiden QIP (Qualified Institutional Placement)

Suzlon Energy Ltd is first S88-2.1 MW wind turbine is commissioned by Deco Light Ceramics
Ltd, in Gujarat, India

Hansen Transmission International N.V completes provisional listing of IPO on London Stock
Exchange

Suzlon Energy Ltd Signs up with ONGC Limited - for 51 MW wind turbine capacity

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SEFORGE vision statement:

Being the preferred supplier of large casting and forging

Creating an benchmark in technological innovation and processes

Enhance value for all stakeholders

Contributing towards a greener environment

Developing a sense of ownership and a passion in our team to excel

Mission statement:

Meet qualitative, quantitative and competitive expectation of customer

Develop and continuously upgrade our infrastructure, technology and processes

Faster continuous improvement at our manufacturing processes through innovation in order to

enhance quality, productivity, lead time and optimize cost

Ensure fair returns and rewards to our investor

Create values added long term partnership with our vendors

Be proactive and responsive to the needs of the society

Our values:

Collaboration:

Bonding as a team forming alliances and sharing knowledge, in order to achieve SEFORGE’s
vision goals.

Excellence:

delivering performance, which consistently surpasses the expectation of all stake holders.
Anticipation and taking necessary actions proactively to meet or exceed the needs of the
customers, setting high personal goals and standard, continuously striving to achieve them

Innovation:

applying creativity and ingenuity to make us faster and better .seeking opportunities to improve
product and work processes generating ideas that go beyond the status quo. Recognizing the
need for new and modified approaches and championing the same .Being catalyst for a change.

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FUNCTIONAL AREA
2.1 marketing:
Marketing is very vital function in any industry. Every company has to handle its marketing
function with care. As the whole world is turning in to a global market, marketing function is
getting more and important in every company.

The term marketing is changing in the world. Now selling product by advertising in the
presentation for public at for the investors and public. It is not the only function of marketing.
But in this new world

marketing puts weight age on satisfying consumer needs. If the market does a good Job
understanding consumer needs, develops product that provide superior value and price,
distributes & promotes them effectively. These products will sell very easily. Together with
their Associate Companies in their Group. They have positioned themselves as an integrated
solution provider of services related to wind energy in the Indian market. Besides
manufacturing WTGs. they are involved in wind resource mapping. Identification of suitable
sites and technical planning of wind power projects.

Suzlon
They also provide after-sale O & M services for WTGs supplied by them. Their Associate
Companies acquire sites they have identified as suitable for wind energy projects, which are
then sold or leased to their customers, and undertake the technical implementation of wind
farms, including infrastructure development, installation of WTGs and connection to power
grids.

Marketing Environments:
The concept of markets finally brings as full circle to the concept of marketing. Marketing
means managing markets to bring about exchanging for the purpose of satisfying human wants.
Thus they return to their definition of marketing as a process by which individual and groups
obtain what they need and what by creating and exchanging products and value with others.

Sales and Marketing

Our WTGs are primarily sold by us through our sales and marketing team based in India and
by our foreign sales and marketing subsidiaries and branch offices.

India
We have divided the Indian market according to the states where we have identified suitable
sites for wind energy projects, specifically Maharashtra, Gujarat, Rajasthan, Tamil Nadu,

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Karnataka, Madhya Pradesh and Andhra Pradesh. Marketing for each state is under the
supervision of a senior management executive who directly reports to our Chairman and
Managing Director. We also have sales offices in key cities such as Pune, Bangalore, Chennai,
Coimbatore, Hyderabad, Ahmedabad, Rajkot, Surat, Jaipur, Calcutta, Mumbai, Indore and
New Delhi.

The marketing team focuses on three types of customers:

(a) companies that have manufacturing units with high power consumption

(b) companies with high profitability and/or surplus liquidity that seek investment
opportunities with stable returns and that offer tax benefits; and

(c) power utilities and state nodal agencies.

These potential customers are contacted by our marketing team, introducing them to our Group
and the potential benefits of wind power. Our team conducts regular follow-up calls and visits
and provide potential customers with detailed working and feasibility studies regarding wind
power projects. We also organise site visits to existing wind farms. From time to time, we also
obtain customers through participation in tenders by utilities, state nodal agencies and public-
sector entities. As part of our standard practices, we also conduct credit checks and review the
balance sheet of each potential customer in order to ensure that it has the financial capacity to
acquire and operate our WTGs.As of March 31, 2005, we employed 66 people in sales and
marketing for India. As of March 31, 2005, we have sold 1,465 WTGs to Indian customers and
the performance of these WTGs has resulted in a number of repeat orders from customers such
as Bajaj Auto Limited, Ellora Time Ltd., the Ramco Group, MSPL Limited and Vishal Exports
Overseas Ltd. and REI Agro Ltd.

International Markets
We are currently expanding our presence internationally, with an emphasis on North America,
China and Australia. Our global marketing, sales, project and service activities are managed by
our Danish subsidiary, Suzlon Energy A/S. Our international marketing activities primarily
consist of cultivating contacts with wind power project developers with a view to supplying
WTGs for wind power projects developed by them, advertisements placed in professional
industry journals, attendance at national and international energy fairs, such as the Hanover
Fair, PowerGen, WindTechHusum and PowerExpo, as well as conferences and professional
seminars conducted by trade associations and various wind energy associations, such as the
American Wind Energy Association and the British Wind Energy Association.

United States

In 2001, we incorporated SWECO in order to establish a presence in the United States, which
is among the top three wind energy markets in the world in terms of cumulative installations.
As of March 31, 2005, we employed 16 people in marketing, sales, projects and services for

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the United States. We expect to target the following types of customers: (a) companies
interested in investing in renewable energy sources; (b) utilities; (c) wind energy project
developers; and (d) municipalities, schools and cooperatives interested in establishing captive
power facilities.We intend to focus on establishing ongoing business relationships with a core
group of key customers, strategic investors and financial investors, with a view to gaining
access to wind power projects that these entities propose to undertake, as well as securing
exclusive WTG supply agreements with these entities.We focus our direct sales efforts in three
main geographic areas: the Midwest, the South (Texas, Oklahoma) and the West (California),
which will allow us to concentrate on utilities and independent service operators in areas that
we believe have growth potential. We may also offer customers assistance in obtaining project
finance and also provide technical services relating to the installation, O&M of WTGs.As on
June 30, 2005 we have agreements to supply 62 WTGs with 79.9 MW capacity for wind power
projects to be located in the states of Texas and Minnesota in the United States. During fiscal
2003 and 2004, we supplied 24 WTGs with 22.80 MW of nominal output for a wind farm
project developed by DanMar and Associates Inc. in the state of Minnesota in the United
States.

Europe

We have established Suzlon Energy A/S in Denmark as our global headquarters for sales
outside India. We also plan to establish several marketing and project offices for the European
market. As of March 31, 2005, we employed 15 people in marketing, sales, projects and
services in Europe. We expect our customers in Europe to consist primarily of power utilities,
wind power project developers and private investors. Initially, we intend to market our WTGs
in Scandinavia, the Baltic region and Southern Europe. We may also offer customers assistance
in obtaining project finance and also provide technical services relating to the installation,
O&M of WTGs.

Asia Pacific (Australia and New Zealand)

Marketing activities in Australia and New Zealand are conducted by Suzlon Energy Australia
Pty. Ltd., which employed nine people in marketing, sales, projects and services as of March
31, 2005. We believe that both Australia and New Zealand have substantial renewable energy
resources, including wind. Customers are expected to be primarily power utilities and wind
power project developers. We intend to establish market presence by undertaking a pilot
project to demonstrate our capabilities as a WTG manufacturer. We also intend to undertake
direct sales to both wind power project developers and utilities. We may also offer customers
assistance in obtaining project finance and provide technical services relating to the
installation, O&M of WTGs.

China

We have opened a representative office in Beijing, which employed four people in sales and
marketing as of March 31, 2005. As of December 31, 2004, China was among the top ten

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nations in terms of installed 69 wind power capacity according to the March 2005 report of
BTM Consult ApS. The Chinese government is encouraging development of renewable energy
sources and has declared its intention to get 10% of its electricity from renewable energy
sources by 2020. We plan to incorporate a local subsidiary by the end of calendar 2005,
through which we plan to construct a fully-integrated WTG manufacturing facility in China.As
the energy market in China is currently dominated by state-owned utilities, we expect that
these state owned utilities and their subsidiaries will be our primary customers.

Product portfolio:

Products of purpose (casting)

SEFORGE Casting cater to a wide range of industries.

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PRODUCT OF (FORGING)

DIMENSION AND SCOPE

Outer diameter range: 800mm-5000mm

Highest range : 30mm-600mm

Weight: 200kg- 4500kg

PRODUCT RANGE

1. Tower flanges

2. Bearing rings

3. Gear ring blanks

4. Gas and steam turbine rings

5. Other ring

PRODUCT APPICATION:

1. Wind energy

2. Bearing industry

3. Aerospace

4. Oil & gas

5. Power

6. Material handling

7. Construction & mining

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Distribution channel:

SEFORGE LTD generally used all types of transportation facilities like air cargo, by road and
by ship in which there is different agents are there at different location different agent is there
and same agents also there so company can access all that thing and also there is different types
like who are work for company inland and out land also and by ship , air cargo, road all agent
are there for distribution

Strategy:

The strategy of the suzlon for the marketing are very less because in this industry the product is
industrial base and because of this reason the company is not spending on promotions but they
do inform about their working and different models for the benefit of the company.

MARKET SHARE:

The fastest growing markets over the past three years have been China, France and the US,
although the UK hasalso seen significant growth.

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Suzlon's market share (combined with REpower) rose to 12.3% thereby making Suzlon the 3
largest wind turbinemanufacturingcompany in the world.

In China, Suzlon’s share has come down to 2% in 2008 as against 4% reported in 2007.

Furthermore, due to biased policies of Chinese governments against foreign players, it is

difficult for an international player to retain or enhance its share. So, despite Chinese
government’s ambitious plans to add 100GW over next 10 years it will be difficult for Suzlon
to avail its benefits.

Europe and US Market: Given the difficult availability of short term finances in Europe
and US the market for wind energy is anticipated to relatively remain sluggish till 2010

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Human resource department
According to flippo –“Human resource management is the planning, organizing directing and
controlling of the procurement, development, compensation, integration, maintenance and
reproduction of human resources to the end that individual, organizational and objectives are
accomplished”HRM is concerned with integration – getting all the members of the
organization involved and working together with a sense of common purpose. Human resource
take active role in the modern economic scenario of any country. The abundant Physical
Resources alone cannot benefit the growth of the country without Human Resource
component, which transform physical resources into productive.They are in a technology-
driven industry and they believe that their employees are key contributors to their business
success. Accordingly, they focus on attracting, training and retaining the best people possible.
They believe that a combination of their position as a leading wind energy solutions provider,
their working environment and competitive compensation programs allow them to attract and
retain talented people. They believe their relationship with their employees at their operations
and maintenance centre at vankusawade went on strike to demand revision in wages,
allowance, overtime payments, and changes in working conditions such as lodging and
boarding facilities, transport facilities.Allotment of 233400 equity shares during the year on
account of exercise of stock options arising out of the employee stock option plan.

Employee Retention and Care

We strive to foster a feeling of well-being in our employees through care and respect. We have
several structured processes including employee mentoring and grievance management
programmes which are intended to facilitate a friendly and cohesive organizational culture.
Off-site activities are encouraged to improve inter-personal relationships. We also
acknowledge the efforts exerted by our employees by organizing an annual celebration called
"Sumilan" where we recognize employees who have shown exceptional talent, sincerity and
dedication. For employees forming part of our operations and maintenance teams and who are
based in remote wind farm sites, we provide residential, medical, recreational and
communications facilities as part of the wind farm infrastructure.

Compensation and Performance Management

Our compensation policy is performance based and we believe it is competitive with industry
standards in India. Our compensation packages are adjusted annually based on industry salary
correction, compensation surveys and individual performance. From time to time, employees
who have met or exceeded performance standards are awarded bonuses. We also award long-
service bonuses to employees who have completed atleast five years and ten years of service
with us.Other than this strike, we have never experienced a work stoppage as a result of labour

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disagreements. Other than the employees at their operations and maintenance centre at
vankusawade, none of their employees belong to a union.

In an environment where professional skills hold great relevance and need to be sustainable
over a time continuum, the human resource function acquires significant importance. Today,
manufacturing a wind-mill requires professional hands on involvement and could challenge
such basic human resource elements like teamwork, technical skills, troubleshooting and
integrity. The basic ORGANISATION HIRARCHY of Suzlon’s Functional Department as
shown: The basic structure of Suzlon’s is shown below:

Operation:

Facilities and process

Melting furnace

3 pair of dual track medium frequency induction furnace consisting of 6 nos. with crucibles of
12mt capacity each, each pair of dual track furnace is driven by 8mw power pack

Melting process control room

Process control system for automatic raw material charges to furnace and controlling the
quality of liquid metal

Changing system

Individual charging system for each crucible for charging raw material

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Ladles

Ladles of varying capacity with ladle pre heaters 7mt, 10mt, 15mt, 20mt

Material analysis

Spectrometer for testing chemical composition of molten metal which can analyze 28 element
thermal analysis unit for determination of solid and liquid temperature of metal

Mould shake-out machine capacity machine

Capacity 60mt/hrs -2 nos.

Capacity 30 mt /hrs -1 nos.

Shot blasting machines

Capacity 30 mt/hrs 1no.

Capacity 15 mt/hrs 1no.

Capacity 7 mt/hrs 1no.

Manipulator for finishing grinding of casting

Machine shop

CNC double column vertical machine centre -10mahcine

Table size – 5000mm* 300mm

Travel ------ X-5200MM, Y-4200MM, Z-1500MM

Paint shop

Facilities for grit blasting painting and trying having motorized ground trolley with overhead
electricity monorail

Paint type

Epoxy and polyurethane maximum size of part for painting 5000mm (L)*3500MM
(D)*3000MM (H)

Testing facilities

Mechanical lab: - UTM with 600 kn capacity impact testing machine hardness testing
machine

Metallographic lab: spectrometer, micro scope 40a with camera and image analyzer

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Non destructive testing:

Ultrasonic testing equipments magnetic principal inspection

FORGING

Seforging’s forging plant a sophisticated ISO 9001:2008 facility located hi- tech industrial park
in(SEZ) in vadodara, Gujarat India spread across 200000 sq meter with an installed capacity to
manufacture 42000 fully machined forged ring per annum having diameter up to 5000mm our
planned is fully equipped to meet the demand of our customer seforge product are consumed
by industries like bearing, wind energy aerospace, oil gas power material, handling
construction and mining , heavy machine and defense.

Facility and process:

The material storage includes a wide range of steel grades as per the international standards or
customer technical specifications like

 Fine grain constructional steel e.g. S355NL as per EN 10025-3-2004

 Carbon steel and alloyed heat treatable steel grades e.g.42CrMo4 as per DIN EN 10083
for slow bearing and gear rings

 High alloyed stainless steel e.g.AISI310 or AISI 410 for shroud rings ,turbine rings and
diverse application

HIGH SPEED SAWING CENTRE

 Has high speed sawing machine (HK 180 E160) with ingot feeding magazine weighing
device up to 5 MT labeling machine and plate conbeyor

 Ingots to be cut: diameter 250mm-700mm, length 7000mm maximum, weight 18 MT

maximum

 Billets range length 300mm-1600mm, weight 200kg-4500kg

 TCT saw blade: diameter 1620mm-2000mm

GRINDING CENTRE

Our service shop is equipped with 7 unit for complete maintenance and re sharpening of
tungsten carbide tipped (TCT) saw blades up to 2000mm diameter

HANDING ROBOTS

2 robots of 4.5 MT carrying capacity for handling of billets i.e. from sawing centre to rotary
heath furnace and ring blanking press as well as to the ring rolling machine or re-handling
furnace

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MANUFACUTURIGN EXCELLENCE

SEFORGE forging plant has state of the art equipment and machinery. The ring rolling facility
with high level of precision and automation along with integrated machining ensures
consistency, quality and less cycle time. Our best in class equipment ensures that each product
which leaves the plants, qualifies to the highest global standards

FACILITIES AND PROCESS

The heath has diameter of 12m*2.5m width maximum billet height 1600mm maximum
temperature 1330 C with separate control of 4 zones. The maximum heating capacity is
30MT/hr. the fuel used is natural gas

RING BLANKING PRESS

It has a maximum force of 50MN ram stroke 1500mm, and is fully equipped with a 2 station
sliding table, a centering device ,2 swivel arms and integrated piecing device

CENTRAL CONTROL ROOM

The central control room control the automatic line and provides safety using software program
like CARWIN, ROLLTECH, PIECE TRACKING SYSTEM etc.

RING ROLLING MACHINE

It manufacturing rings of size 600mm-5000m diameter and 30mm-600mm height.

RING BLANKING AND PROCESS

This process can conduct the upsetting stroke, indenting punch, final upsetting and piercing
operations

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Finance department:

The wind industry has enjoyed a period of uninterrupted growth of 34% CAGR over the past 5
years. To outline our consolidated performance as a group for the first 9 months of the
financial year 2009, our revenue grew from 8,756 crores rupees to 17,277 crores of rupees, a
growth of 97%. The world is now looking for the energy security with the governments,
looking to diversify energy source, to mitigate the geopolitical risk around oil and gas
supplies. 

KEY FINANCIAL DATA

Suzlon is the world’s 3rd largest wind power supplier*, with a market share of 9.8%. Suzlon
has been the market leader in India with more than 4400 MW of installed wind energy projects
in 8 states. Suzlon has maintained the top position with the highest year-on-year market share
since 10 consecutive years. In FY 2008-09, Suzlon had a market share of more than 50% in the
Indian market.

RATIO ANALYSIS :

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Organizational and group structure
ORGANISATION STRUCTURE

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

BOARD OF DIRECTORS

The Board of Directors, as repositories of corporate powers, act as a guardian to the Company,
as also the protectors of shareholders’ interests. The Board of the Company represents the
finest blend of knowledge and experience.

Tulsi R. Tanti - Chairman & Managing Director

Mr. Tulsi Tanti, a qualified Mechanical Engineer, founded Suzlon Energy Limited in 1995. He
has led from the front to transform Suzlon into the world's third* and India's leading wind
turbine manufacturer. Mr. Tanti has driven Suzlon not as a business, but as a cause –
contributing to the world by creating sustainable social, economic and ecological development,
by using the very best of technology to help mitigate the global climate crisis.

Girish R. Tanti - Executive Director

Mr. Girish R. Tanti, is one of the Promoters, Executive Director of the Company
and a sibling of Mr. Tulsi Tanti. He comes with an extensive experience of 11 years in business
management. Since 1995 he has played a vital role in the growth of the business, internationalisation
of Suzlon and building the brand Suzlon. He transformed the wind turbine manufacturing from a local
dream into an international reality. Mr. Girish Tanti now works in a strategic, supervisory role as a
mentor and is a member of the Board

AshishDhawan - Independent Director

Mr. AshishDhawanis the co-founder of ChrysCapital, a private equity fund that currently
manages approximately U.S.$2.25 billion across five funds. Mr. Dhawan is a graduate Mathematics
and Economics from Yale University and a post graduate in business administration with distinction
from Harvard University. He is the Senior Managing Director of ChrysCapital based in New Delhi and
was also appointed as an independent Director on the Board of ChrysCapital III

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V. Raghuraman - Independent Director

Mr. V.Raghuraman, an internationally recognized specialist in energy management, energy

efficiency, energy policy, regulatory and technology issues is a Chemical Engineer by qualification.
He was Chairman of the World Energy Efficiency Association and also served the ASSOCHAM as
Secretary General. Armed with his qualification and subject matter expertise he is the currently
Principal Adviser & Chief Coordinator – Energy, Environment & Natural Resources of the
Confederation of Indian Industry (CII) Energy Program.

Pradip Kumar Khaitan - Independent Director

Mr. Pradip Kumar Khaitan is a well-known lawyer and partner of Khaitan& Company,
Advocates. He is a member of the Bar Council of India and Indian Council of Arbitration, New Delhi.
His areas of specialisation are commercial and corporate laws, tax laws, arbitration, joint ventures,
mergers and acquisition, restructuring and de-mergers. He was appointed on the Board from August
25, 2004.

Ajay Relan - Independent Director

Mr. Ajay Relan has an illustrious career spanning across twenty five years in corporate and
investment banking. Mr. Relan was the head of CVCI in India, a position that he held since the
inception of that business in India in 1995. He has served on the boards of several CVCI portfolio
companies, such as Suzlon, HT Media, Yes Bank, i-FLEX and Progeon, among others. The top ranker
from Delhi University is now an independent Director on board.

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INDUSTRIAL PROFIEL

INTRODUCTION

Indian wind energy sector has been developing into the main stream of industrial activity with
active participation of the private sector. About fifteen Wind Turbine (WT)
manufacturers/suppliers with foreign collaborations either as joint ventures or with technology
transfer arrangements are installing Wind Turbines (WTs) in India. These
manufacturers/suppliers, with a few exceptions, are normally supplying WTs of the types
provided by their principals, which are certified by Internationally accredited Certification
Bodies. However, these certificates are issued based on the European site conditions and
approval schemes/technical criteria of the country in which they are carried out. In addition,
the turbines installed in India undergo major/minor changes to suit the Indian conditions.
Therefore, all the major stakeholders of the industry expressed the need for establishing the
testing facilities and certification procedures in the country.
In view of this, Ministry of New and Renewable Energy (MNRE) has established Centre for
Wind Energy Technology (C-WET), as an autonomous institution of Government of India,
registered as a society under the Tamil Nadu Societies Registration Act- 1975, at Chennai,
Tamil Nadu. C-WET has five units namely, Research and Development (R&D), Wind
Resource Assessment (WRA), Wind Turbine Testing (WTT), Standards & Certification (S&C)
and Information, Training & Commercial Services (IT&CS) to support all the areas of the wind
energy sector. The Wind Turbine Test Station, an integral part of C-WET, is being established
as a Project covering the WTT and S&C Units with the technical support and financial
assistance of DANIDA, Denmark. RISO National Laboratory (RISO), Denmark, was
appointed by DANIDA, as a Technical Consultant of this Project. MNRE has been issuing
guidelines and recommendations periodically to
the wind energy sector, to address the issues related to maintaining quality of the WTs installed
in India. As per the guidelines dated 24.05.1999, it was stated, “Certification by foreign
agencies will not be required henceforth ; manufacturers of WTs will provide self-certification
about the quality and performance of their equipment ; this self certification procedure will be
followed till such time that Testing/ Certification facilities are established within the country”.
While the establishment of
C-WET in terms of infrastructure and training is in progress, the Wind Turbine Testing Station,
the facility for the Testing and Certification is simultaneously made partly operational to meet
the immediate needs of the wind energy sector in the areas of testing and certification
provisionally.In this context, a provisional scheme namely, “Type Approval -Provisional
Scheme (TAPS)”, for provisional certification and corresponding requirements of provisional
type testing and measurements, is formulated in consultation with RISO. The Wind Energy
Sector may now avail this facility for provisional type testing and provisional type certification
till the formation and issue of final Type Approval Scheme (TAS) and formal accreditation.
TAPS is intended to meet the requirements of manufacturers/suppliers, wind farm developers,
financial institutions, insurance companies, State Electricity Boards, State Nodal Agencies and
other related Government /regulatory bodies. TAPS aims to promote procedures and
requirements for the establishment of uniform codes, standards and technical criteria for
design, manufacturing and operation of WTs. TAPS comprises of principles, procedures,
requirements and the technical criteria for certification of WTs in India, addressed to applicants
and others involved in the scheme. TAPS is formulated in line with national and international
rules, codes and standards relevant for certification of WT. In TAPS, technical requirements

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have been framed for topics, which have not been covered currently by the existing standards
in India. The procedures and requirements for obtaining the necessary approvals and
certificates for manufacturing system (production and installation) evaluation including quality
management system, which the WT manufacturer/supplier must comply with, are described in
TAPS. The requirements of aspects to be fulfilled and the corresponding documentation
requirements are also described. TAPS will be applicable only to the grid connected, horizontal
axis WT of the rotor swept area greater than 40 m2. The procedures in TAPS have been
formulated in consultations/ discussions with Indian Wind Turbine Manufacturer’s Association
(IWTMA). Compliance with TAPS and certificate issued by C-WET to this effect do not
absolve any person, organisation or corporation, of the responsibility for following and
adhering to all applicable guidelines, procedures, rules, regulations, and protocols. In the
following Chapters, both Type Approval and Type Certification have the same meaning. TAPS
has four Chapters. The first Chapter deals with “Introduction” and the second Chapter deals
with “Approval AndOrganisation”. The third and fourth chapters deal with “Definitions” and
“Provisional Type Certification”. The “List of Acts, Standards and Guidelines”, which are
applicable to wind energy sector and TAPS, is given as “References”.
Environmental factors determine by suzlon energy

COMPETITIVE SENARIO

Factors Affecting Wind Energy Segment

Economic Growth: The relationship between economic growth and wind energy segment
can be given by:-

High Economic Growth=High Industrial Production=High Demand for Electricity=BetterSales

Possibilities for Wind Energy Industry.Demand for electricity depended on the economic
growth of India and countries, such asUSA and China that are huge market. As a result any
economic downturn in theseeconomies will have an adverse impact on Suzlon’s business and
financials.

Current & Future Outlook of GDP

Despite the global financial crisis Indian economy registered GDP growth of 6.1% in thefirst
quarter of 2009-10 positioned against the growth of 5.8% in the previous quarter and7.8% in
the same period of the previous year. Such impressive performance substantiatesIndia’s
position as one of the best performing economies. Owing to which CII has raisedthe growth
target for 2009-10 to 6.5-7.0 percent

Cost Competitiveness:
The demand for wind power plants is dependent on the cost ofwind-generated electricity
compared to electricity generated from other sources of energy.
Hence, limited cost and supplies of oil, coal and other fossil fuels are key factors indetermining
the effectiveness of wind power.

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Interest Rates:

Wind farm project require higher upfront capital investment per kWh ofenergy produced when
compared to fossil fuel-based power plants. As a result conditionand availability of financing
availed for wind power project significantly affects thebusiness, financial condition and results
of operations. Higher interest rates increase thecost of investment, making investment in wind
energy less attractive.- Investment in wind power projects is considered to be riskier.- The
refinancing of wind power project is done at a higher rate.- Project funding has taken a hit due
to non availabltiy of credit in the wake offinancial crisis

Regulatory Framework:
Wind Power Industry worldwide is supported by grants andseveral government initiatives and
incentives. Hence, any elimination of the following caneliminate the competitive advantage of
the industry.Current State- Indian and global government have enacted have enacted
legislations topromote expansion of renewable energy sources.- Fiscal incentive scheme, tax
incentives and public grants, such as preferentialtariffs on power generated by WTGs or tax
incentives promotinginvestments in wind power.- State governments have even give wind
power generator with wheelingfacilities.- Wind power generators are allowed to take power
from the grid, to offsetthe impact of intermittent wind.- Country specific targets to obtain a set
amount of electricity from renewableenergy sources.- Global efforts to reduce carbon dioxide
emissions

Local Sentiments:
Local communities have at times opposed the construction of windpower projects due to
concerns about:-
- Aesthetic unappealing
- Impact on flora, due to killing of birds
In some countries there are legislations pertaining to height of WTG and minimum distance
between the power plant and urban area. Any further restrains can reduce the growth
prospects of wind power industry.

Technological Obsolescence:
Wind energy sector is sensitive to changes in technology.Hence a firm’s inability to develop
financially viable and cost efficient WTG on anongoing basis can dilute its competitive
advantage.

Other Factors:
The competition in the global wind energy market is governed byperformance of WTGs,
reliability, product quality, technology, price, and the scope andquality of services, including
O&M services, and training offered to customers.If competitor’s come together through joint
ventures and other cooperative agreement, thatcan have impact the leadership position of
Suzlon.Growing competition can either result in the reduction of the market share of the firms
orreduction in margins, if the firm plans to reduce its prices.

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Highlights of Global Wind Energy Market
- Total installed capacity of 152’000 MW by 2009-end
- Estimated annual capacity expansion of over 30’000 MW
- Execution of some wind energy projects which have been postponed due to
financing challenges, new regulations or bureaucratic delays
- Turnover of 40 Billion € in 2008
- China doubles its installations, more than 12 GW of wind turbines installed
- North America and Asia bullish on growth as Europe slows down
- Global capacity of around 1’500’000 MW is feasible by 2020
- USA reports maximum number of installations.
- The USA and China accounted for 51 % of the wind turbine sales in 2008
- Generated 260 TWh electricity in 2008
- Currently contributes to 1.5% of global electricity consumption and is
expected to contribute 12% by 2020

Market share:

Suzlon commanded 7% market share globally and 58% in India in 2008.]

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Industry spectrum:

PROCESS OF MAKING WTG (WIND TURBINE GENERATOR)

 FOUNDRY AND MACHINING.

 FORGING & MACHINING.

 GEARBOX

 BLADES

 PANELS

 GENERATOR

 TOWER

GOVERNMENT RULE AND REGULATION:

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Wind Power Industry worldwide is supported by grants andseveral government initiatives and
incentives. Hence, any elimination of the following caneliminate the competitive advantage of
the industry.Current State- Indian and global government have enacted have enacted
legislations topromote expansion of renewable energy sources.- Fiscal incentive scheme, tax
incentives and public grants, such as preferentialtariffs on power generated by WTGs or tax
incentives promotinginvestments in wind power.- State governments have even give wind
power generator with wheelingfacilities.- Wind power generators are allowed to take power
from the grid, to offsetthe impact of intermittent wind.- Country specific targets to obtain a set
amount of electricity from renewableenergy sources.- Global efforts to reduce carbon dioxide
emissions

Government Policies

The Ministry has been issuing guidelines for wind power development since July 1995 in order
to bring about balanced growth of the sector. These guidelines relate to preparation of detailed
project reports, micro-sitting, selection of wind turbine equipment, operation & maintenance,
performance evaluation, etc.

• The tariff review period is of 3 years which is too long because in this much period of time
there is huge possibilities of changes. So this much long time for tariff review is not suitable at
this point of time.

• In India each state is having its own policy for wind energy. The harmony is missing between
states. So it can create complexity for doing business in different states.

•Tariff procurement rates are also different in different states which can create a comparative
advantage or disadvantage for states for establishing wind mills.

•In some states like Rajasthan and Maharashtra land allotment process is so much complicated
while its comparatively easy in Gujarat.

•In some states like there is a long process for approving a project while some states like
Rajasthan project approval is given on “single window clearance” basis.

Changes in safety, health and environmental laws:

The main law affecting the wind farms is the laws regarding safety, health and environmental
issues, thus any change in these regulations will affect the industry in that manner.

Central Government’s Incentives

•Energy buyback, power wheeling and banking facilities.

•Sales tax concession benefits.

•Electricity tax exemption.

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•Demand cut concession offered to industrial customers who establish power generating units
from renewable energy sources.

•Capital subsidy.

Environmental Framework

Economic:
The relationship between economic growth and wind energy segmentcanbe given by:-

High Economic Growth=High Industrial Production=High Demand for Electricity=Better

Sales Possibilities for Wind Energy Industry.Demand for electricity depended on the economic
growth of India and countries, such asUSA and China that are huge market. As a result any
economic downturn in theseeconomies will have an adverse impact on Suzlon’s business and
financials

The Average GDP growth rate of India is between 3.84 to 9 from 2002-03 to 2007-08,It has
been increased more than double over a period. The GDP rate is sign of boosting industrial
revolution so overall production level increased and it needs more electricity to fulfill it so that
it would be tremendous support to wind turbine manufacturers. Along with that the service
industry is also increasing which accounts for the sizable amount of energy. From the
experience of the developed countries we could say that as the economy increases the emission
of CO2 increases, thus the wind is one of the few sources that can keep the balance in nature.
And the above graph shows that, though there is fluctuation in GDP rates production of wind
electricity is increasing because of its environment friendly nature and its cost effectiveness..

Political:

Govt. of India and state govts.have developed suitable policiesandguidelines for providing
technical help, financial support andvarious other incentives for development of wind power in
thecountry. These include R&D activities for design anddevelopment of low cost indigenous
wind energy harnessingtechnologies, dissemination of the developed technologiesthrough
demonstration projects, setting up of the commercialwind farms through central and state
government subsidy,providing financial incentives to potential entrepreneurs etc.

Social:

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Technological:
Wind energy sector is sensitive to changes in technology.Hence a firm’s inability to develop
financially viable and cost efficient WTG on anongoing basis can dilute its competitive
advantage.

Legal:
A host of fiscal incentives and facilities are available to both manufacturers and users of
renewable energy systems, which include:

• 100 percent accelerated depreciation for tax purposes in the first year of the installation of
projects/systems.

• No excise duty on the manufacturing of most finished products.

• Low import tariffs for capital equipment and most of the materials and components.

• Soft loans to manufacturers and users for commercial and near commercial technologies.

• Five-year tax holiday for power generation projects.

• Remunerative pricing under the alternate power purchase policy by state government for the
power generated through renewable energy systems, fed to the grid by private sector.

• Facility for the banking and wheeling of power.

• Facility for the third party sale of renewable energy power.

• Financial Incentives/Subsidies for devices with high initial cost.

• Involvement of women not only as beneficiaries but also as active contributors in the
implementation of renewable energy programs.

• Encouragement to non-governmental organizations (NGOs) and small entrepreneurs.

• Special thrust for renewable energy in Northeastern region of the country. 10 percent of plan
funds earmarked for the Northeast towards enhanced and special subsidies.

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• Allotment of land on a long-term basis at token lease rent and supply of garbage free of cost
at project site by state governments, with respect to projects on energy recovery from
municipal waste.

Modal Application:

Strategic Advantage Profile:

Suzlon Wind Energy limited - Porter’s Five Force Analysis

The Intensity of Competitive Rivalry – Medium Although the market is dominated by two
players but the extent of competitive rivalry can be termed as medium because there is a scope
for foreign players.

Bargaining Power of Suppliers – Medium High bargaining power of suppliers can be

attributed to multiple requirement of number of components, which are either sourced from
open market or imported. However, this issue has been resolved due to widespread vertical
integration. Yet some components have long delivery time which gives medium bargaining
power to suppliers.

Bargaining Power of Buyers – Low Since it’s a relatively new sector still in the development
stage of the life cycle so there can be number of cases where supplier governs the terms when
compared to the buyers.

The Threat of Substitute Product – Low Since wind power is one of the cheapest sources of
energy so the threat of substitutes is relatively low

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The Threat of New Entrants – Medium Since it’s a capital intensive industry so only major
players can afford enter the market either individually or in the form of JVs.

ETOP (environmental threat and opportunities and profile)

Environmental:
 India has the fifth largest electricity generation capacity in the world

 Transmission & Distribution network of 6.6 million circuit km - the third largest in the
world

 Potential for growth in this sector (demand exceeding supply)

 Increasing focus on renewable sources of energy Government presence in the sector

(encouraging entry of foreign players)

 No barriers to entry

Threat:
 Competition to domestic players from foreign Pvt players as 100% FDI permitted by
government in Generation, Transmission & Distribution

 Not a lucrative option for investors(ROE )

 Rise in price of raw materials

 Tariffs are distorted and do not cover cost

Opportunities:

 huge population base

 Opportunities in Generation

 Ultra Mega Power Plants (UMPP) – 9 projects of 4000MW each.

 Coal based plants at pithead or coastal locations whichare untapped.

 Hydel power potential of 150,000 MW is untapped asassessed by the Government of
India.

 Renovation, modernisation, up-rating and life extensionof old thermal and hydro power
plants.

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Profile:
A recent study by consultancy major McKinsey estimatesIndia's power demand to increase
from the present 120 gigawatt (GW) to 315 GW–335 GW by 2017, if India continues togrow at
an average of 8 per cent over the next 10 years
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WIND POWER SECTOR IN INDIA 2010
This would require a five- to ten-fold rise in powerproduction, entailing investments worth
US$ 600 billion overthe next ten years.To feed its rapidly growing economy, India is planning
to getan additional 60,000 MW of electricity from various hydropowerprojects by the end of
2025.

The government targets providing electricity for all by 2012.Under the Rajiv Gandhi Grameen
Vidyutikaran Yojna, theMinistry of Power plans to electrify 120,000 villages in thecurrent Five
Year Plan (2007–12)

BCG MATRIX

Value chain:

Suzlon’s global Value Chain

R & D and Technology Focus

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 Best of all worlds technology strategy
 Product development in Germany
 Product and process Engineering in India
 Gearbox R&D in Belgium (Hansen)
 Generator technology from Austria (Elin)

Strong Presence in Key growth markets

 India, China, USA, Brazil, Italy, Portugal, Australia, Korea

Global manufacturing Capabilities

 Vertical integration from components to turbine

 Facilities in Belgium, China, India and the USA
 4,200 MW of component manufacturing capacity by FY 2008
 Experienced workforce in both low labour cost economies as well as advanced
economies

Domestic growth strategy

From small beginnings in 1995, Suzlon has tried to become a fully integrated company capable
of building wind turbines and installing and operating wind farms. Suzlon delivers end-to-end
wind power solutions from assembly, installation to commissioning. ]Suzlon has benefited
from a favourable tax scheme in India, designed to promote renewable energy investment and
development. Currently, the income-tax laws allow 80 percent of the cost of the windmill to be
set off against taxable income. Furthermore, if the owner can show itself as a power sector
operator, it can get a tax holiday for 10 years for income from power generation. Thus suzlon
has built a profitable business at home using India's low- cost, highly skilled labour force , tax
benefits and Vertical Integration through joint ventures and acquisitions, it is now pursuing a
global vision.

Global growth strategy

Suzlon is focusing on globalizing through a number of methods. First, it benefits from India's
depreciating currency, as its products are seen as cheaper by the rest of the world. Second,
Suzlon offers varying packages in different places depending on the price levels; in China,
where prices are low, they offer full power plants, but in the U.S., they install cheaper turbine
generators. This price discrimination allows Suzlon to cut their costs while maximizing
margins. Finally, Suzlon is increasing its global reach, with its R&D branch in Europe,
production in India and China, and a sales focus in the top global wind markets. China is
actively seeking other energy alternatives to its coal plants.The company is aggressively
pursuing an acquisition strategy to absorb smaller competitors, as seen in its recent
acquisition--in conjunction with France's Areva--of the German wind power company

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REpower, in order to cut down on competition and acquire new product lines. Thus, Suzlon is
preparing itself to climb towards the top of the market and take advantage of possible global
shifts toward clean energy sources. Some of its key alliances are with Elin of Austria and
Hansen of Belgium.

Elin EBG Motoren GmbH of Austria have entered into a joint venutre (JV) to manufacture slip
ring generators required for wind turbine generators (WTGs) at the former's manufacturing
facility at Pune in Maharashtra. The joint venture - Suzlon Generators (P) Ltd - will allow
Suzlon to lower WTG manufacturing costs, giving them greater control over the supply chain
for components and enable quicker, more efficient assembly and delivery of WTG components
to customers.Suzlon acquired Hansen Transmissions, Belgium in 2006. The acquisition of the
world’s second leading gearbox maker gives Suzlon manufacturing and technology
development capability for wind gearboxes, enabling an integrated R&D approach to design
even more efficient wind turbines. It Plugs a critical gap in Suzlon’s supply chain as the
Gearbox is one of the longest lead-time products in WTG value chain. It also develops a long-
term growth driver in form of Wind and Industrial gearbox business of Hansen
Transmissions.Suzlons global strategy involves Vertical Integration, Focus on Key High
Growth Markets, Growth through M&A, Cost Efficiency, R&D and Innovation, and Focus on
Customer Satisfaction.

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