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Mr Tulsi Tanti

Rahul Wadke

Mumbai, June 20 A week after Suzlon acquired German wind power major REpower for $2 billion, Mr Tulsi Tanti, Chairman, Suzlon Energy, takes time off in his Pune office to explain the reasons for taking the deal forward as also the strategic strength REpower has to offer to his group in an interview to Business Line. Excerpts from the interview:

What does it means to acquire REpower?

We have an opportunity to develop both companies as part of a unified business; it is a huge strength that we have gained. More than two years ago, when we considered the acquisition it was on the basis of its strong engineering strength and its high-end product such as the offshore wind turbine.

REpower is a small company that has a strong brand name in the European markets. If Suzlon considers creating the same product and brand it would have taken five years to do so. Since we began the process of acquiring REpower in 2007, we were very clear about REpower’s complementary strength. Both companies have different business models, product range, customers and geographies of operation.

What has changed since you started the process of acquiring REpower?

Global economic recession has altered all business parameters. There has been reduction in commodity and oil prices but interest rates have been fluctuating. It has affected our industry but the impact is not very severe.

Will Suzlon integrate its product line with REpower?

REpower turbines are best suited for certain geographies and so is the case of Suzlon. Therefore, there is no need for any integration. Further, Suzlon is not offering products for offshore wind farms. But both companies are offering huge complementary strength. Suzlon is not replacing REpower products and vice-versa.

Other benefits you see of the acquisition?

Today, we are one of the three global wind energy companies who offer onshore and offshore turbines. With REpower’s acquisition, we now can offer a whole range of turbines – from 6 MW to 600 kW. We are in a position to offer turbines for sites as diverse as cold deserts in Inner Mongolia where the temperature touches minus 40 degree Celsius to the Thar desert where it reaches 50 degree Celsius. Globally, wind sites can be divided into three types depending on wind speeds. We now have products for all wind speeds.

There are some who felt you acquired REpower for its superior technology alone. Is it so?

If we wanted technology we could have got it off the shelf by acquiring a license for a product. A number of European companies are selling their licenses for $2 million and we could have done that.

Our investment in REpower is a strategic one. A standalone REpower will be a huge value addition in the next three to five years. In the last two years, the bottom line growth in REpower is over 100 per cent. Despite the market collapse we are getting a higher valuation for the company than what we invested. From a strategic investment point of view it is an excellent investment and we bought it in instalments.

More Stories on : Non-conventional Energy | Interview | Suzlon Energy Ltd

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