Suzlon Energy Ltd is an Indian wind turbine manufacturer that has vertically integrated its supply chain. It designs, manufactures, and installs wind turbines as well as provides operation and maintenance services. Suzlon has manufacturing plants and R&D centers across several countries and acquired other wind energy companies to expand its product portfolio and global reach. Vertical integration allows Suzlon to have control over its supply chain and offer turnkey solutions while facing challenges from declining sales, new competitors, and needing to reduce costs.

1. Suzlon Energy Ltd: Making Foray Abroad Presented by Anupam Iyer Arjun Ramakrishnan Bhoomika Diwan Chandni Agarwal Manish Singh Tarun Rustagi 1

2. Presentation Flow Wind Energy Market Windmill Turbine Generators - Introduction Suzlon Energy Ltd Introduction Products & Services Vertical Integration Introduction Varieties Examples Windmill Turbine Generators Components Manufacturing Operations Suzlon Energy Ltd Group Companies Advantages of Vertical Integration Differentiating Factor Problems & Challenges Future Strategy

3. Wind Energy Market Security of Supply Economic Considerations Environmental Concerns Significant Facts: 2000-2010: Wind power generation grown by more than ten times Global wind energy market to reach 240GW by 2012 Competitive and lucrative as long as Oil Barrel costs > $40

4. Wind Energy Market

5. Windmill Turbine Generators Blades aerodynamically similar to airplane wings Mounted 30m or above to take advantage of faster and less turbulent winds. The higher, the better. Have emergency shut-off in case of storms Technological trends increasing in complexity

6. Unconventional Designs

7. Suzlon Energy Ltd: A Brief Est. 1995 by Tulsi Tanti Headquarters in Pune. Offices across 5 continents. 8th largest manufacturer in the world. Largest in India. In terms of net worth, world's most valuable wind energy company, though market value lesser than smaller companies Operates largest wind park - 584 MW - Tamil Nadu Operates and maintains Suzlon One Earth Latest contract is by Caparo Energy for $1.28 billion

8. Suzlon Energy Ltd: Products & Services Windmill Electricity Generators S88 Mark II - 2.25 MW S88 - 2.1 MW S82 – 1.5 MW Services Wind Energy Estimation Land Sourcing and Permitting Infrastructure Development Installation and Commissioning Operation and Maintenance S66 - 1.25 MW S64 – 1.25 MW S52 – 600 kW

9. Vertical Integration: Introduction Vertical integration is the degree to which a firm owns its downstream suppliers and its upstream buyers. Contrary to horizontal integration, which is a consolidation of many firms that handle the same part of the production process, vertical integration is typified by one firm engaged in different parts of production

10. Vertical Integration: Varieties A company exhibits backward vertical integration when it controls subsidiaries that produce some of the inputs used in the production of its products. A company tends toward forward vertical integration when it controls distribution centers and retailers where its products are sold. Balanced vertical integration means a firm controls all of these components, from raw materials to final delivery.

12. Suzlon’s Vertical Integration Designing & Developing of Rotor blades in Netherlands Acquisition of Hansen Transmission, Belgium – Manufactures turbines gear box Acquisition of RE power, Germany – Manufactures high capacity turbines Manufactures generators, panels, and towers R&D and technology centers, manufacturing facilities and service support centers spread across the globe Delivers projects through its project management and installation consultancy, and operations & maintenance services

13. Windmill Turbine Generators: Components

14. Manufacturing Operations Production Introduction rotor blades nacelles nacelle covers nose cones control panels control systems hubs generators panels tubular towers gear boxes (Hansen Transmission) offshore turbines (REPower) Slip Ring Generators (Elin EBG Motoren GmbH) Services WTG Assembly Retrofitting of blades for clients Delivery and service of wind farms R&D: Germany/India

15. Suzlon Companies Location Company Products India Gandhidham Suzlon Structures Pvt Ltd Tubular Towers Bhuj Suzlon Energy Ltd Rotor Blades Vadodara SCL CEC Daman Suzlon Energy Ltd Rotor Blades, WTG Assembly, Nacelles, Nacelle Covers, Control Systems, Nose Cones Dhule Suzlon Energy Ltd Rotor Blades, Tubular Towers Chakan Suzlon Generators Ltd Generators Padubidri Suzlon Wind International Ltd Nacelles, Nacelle Covers, Nose Cones Padubidri SE Composites Ltd Rotor Blades Coimbatore SE Electricals Ltd Generators, Control Systems Pondicherry Suzlon Energy Ltd Rotor Blades, Nacelles, Nacelle Covers, Control Systems, Hubs China Tianjin Suzlon Energy Tianjin Ltd Rotor Blades, Nacelles, Nacelle Covers, Control Panels, Hubs, Generators, Nose Cones USA Pipestone Suzlon Rotor Corp Rotor Blades, Nose Cones

16. Advantages of Vertical Integration No gaps in supply chain No bottlenecks in supply chain due to demand-supply mismatch Low logistics cost Dedicated delivery capability Flexible response to local markets Expansion into markets (E.g.: REPower - Euro Markets) Supply Chain synergy Total solutions

17. Differentiating Factor Turnkey (end-to-end) solutions Vertical Integration Global Integration Focus on QM and Health, Safety and Environment Customized products as per needs of individual customers Low cost producer, top-class design

18. Problems and Challenges Declining consolidated sales Declining share value and public opinion US economy slowdown Need to manufacture wider range of turbines New players entering a lucrative market

19. Future Strategy No further need for acquisitions Consolidate global businesses Product innovation Cost reduction To be order winner

20. Questions?