Suzlon to set up plants in China, US

Suzlon Energy Ltd, the wind energy equipment supplier is setting up manufacturing plants in China and the US. The plants to be set up at a cost of around Rs 320 crore will become operational by the next year.

"The plant in the US, which will produce rotor blades, will become operational before the end of this fiscal, while the one in China is expected to start functioning by September 2006," said Girish Tanti, director - international business development and human resources.

The company is focussing on India, China, Australia, the US, Australia, Italy and Portugal as major markets.

The plant in the US, being built at a cost of Rs 100 crore, is to supply rotor blades to the US. The company has supplied 24 wind turbines to the US and has agreements to supply 62 additional turbines.

"Rotor blades are very large in size and involve huge logistics costs. So, by setting up a plant in the US, we save on costs despite the higher overheads," Tanti said.

The company is also setting up an integrated manufacturing facility in China, at a cost of Rs 220 crore. "China is a big market, double India's size, and we expect it to grow faster. Also, regulations require us to source 70 per cent content locally," he said, adding that the company would import material developed in China into India also.

"Australia is not a large market as of now and we have no immediate plans to set up a manufacturing facility. Our existing facility in Pondicherry can be used to supply to the Australian market," Tanti added.

Suzlon IPO will hit the markets on September 23 and aims to raise over Rs 1,000 crore. The proceeds from the float will be used to invest in these plants and in domestic manufacturing facilities.

Post the IPO, the promoters holding in Suzlon would come down to 69.78 per cent from 76.94 per cent at present.