Wind turbine supplier Suzlon Energy is vying for emerging markets as it faces a downturn in developed countries. The India-based company said it plans to refocus its business more on the fast-growing emerging markets in India, China, South Africa, and Brazil amid a decline in places like the US and Europe.
A senior executive said the company might position Repower Systems, Suzlon’s German subsidiary, to supply more developed markets such as the US, Europe and Australia, with an emphasis on offshore wind farms. The parent company would pursue high-growth opportunities in Asia, Africa, and Latin America to build its order book quickly.
Analysts are predicting slower than expected growth in wind power, particularly in the US and Europe, over the next two years. However, is there really a dismal outlook to the US and European wind markets or is locally manufactured products pushing foreign companies to venture into nearly unchartered territory?
The US is on its way to the top as it already has one of the largest wind markets, becoming the top producer in 2008 overtaking Germany. While the North American country imported most of its wind turbines from Europe and Asia, the USupped its manufacturing of wind turbine parts from what was only 30% in 2005 to 50% in 2008. Both wind turbine and turbine parts manufacturers either added or expanded 55 facilities in 2008, which created 13,000 new direct jobs. Currently, seven out of 10 top wind turbine manufacturers have plants in the US, according to the American Wind Energy Association (AWEA).
The US houses energy giant GE, in addition to Siemens opening a wind blade factory in Fort Madison, Iowa in September 2007 employing 360 people. The world’s leading turbine manufacturer, Danish-owned Vestas, is aiming to obtain all the parts for its US turbines from domestic suppliers.
If Suzlon is looking to become an even greater leader in the sector, it should know that all of the emerging markets that it hopes to penetrate also have companies like GE, Siemens, and Vestas in their markets. Suzlon should also pay attention to the difficulties of venturing into countries like China, where local manufacturers seem to win bids despite the qualifications of foreign investors (Manufacturers Face Wind Tunnel Problems in China).
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