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Spanish wind turbine maker Gamesa expects to reach a wind turbine output of about 700 Mw in India this year, up from 400 Mw in 2013. Ignacio Martin, chairman, Gamesa, in an interview with T E Narasimhan, shares his view about the Indian market and company's proposed euro 100 million ($128 million) plan:
How do you see the Indian market for Gamesa and what are the plans for the country?
The Indian market is very promising and some of the initiatives taken by the government are also very supportive. The government is already keen on growing the sector to 10 gigawatt (GW) per annum. This is an achievable target provided the framework is conducive to investment and growth.
Gamesa has already established one of the top companies in the wind sector with a strong local manufacturing presence. We look forward to be among the leading companies in India by strengthening our manufacturing, introducing new efficient products and expanding the wind farm development.
The inauguration comes after ‘Make In India’, how do you see this campaign and what would be your contribution? What should the government do to make it successful?
It is the need of the hour! India has a huge deficit in current account and trade and we cannot continue to import when we have the technology and resources here in India.
Gamesa, as a company, is committed to maximising local content and manufacturing. We hope with growing demand, the supply chain will be much stronger and it will enable us to source more from India. The industry also needs a certain critical mass in terms of volume to ensure that the local supply chain becomes competitive. Therefore, the government’s initiative to scale up wind energy to about 10GW is the right step for promoting local manufacturing.
Will the company look at using the Chennai facility for export markets? If yes, what percentage will be for export markets?
Currently, the plants are focused to meet local demand as India is a fast-growing global market. We have exported turbines to countries like Sri Lanka. Our focus is on meeting the growing demand locally and strengthening the supply chain. If the opportunity emerges, then we shall consider exports as well.
How important is India for Gamesa and how competitive is manufacturing in India?
India is very critical to Gamesa’s future growth. India already contributes about 1/4th of our business and we see this growing in future. We are committed to having a strong and agile organisation in India to meet the demands of our clients. Manufacturing in India also make tremendous business sense as it enables us to gain proximity to the market. We have a high local content which means the industry and supply chain has developed rapidly in the past decade. We look forward to further strengthening the supply chain to improve our manufacturing competitiveness in the region.
How much has Gamesa invested in India till now ? Any further plans? If yes, how much?
Gamesa has made significant investment in nurturing the young Indian organisation. This was mainly in establishing the local manufacturing facilities in Chennai and Baroda. Besides this, we have also supported India in building a strong wind farm development as the Indian market requires turnkey wind farms.
We plan to invest about euro 100 million over the next five years. The key focus areas will be to strengthen our manufacturing capabilities especially for the launch of new products like G114-2.0 in India, develop the supply chain and increase localisation, and increase our land bank to promote and develop wind farms.
How much does India contribute to Gamesa’s business globally?
India contributed about 27 per cent in the three quarters of 2014 in terms of Mw sold. This has steadily increased over the past and India is now the second largest market for Gamesa globally and only next to Latin America. At the end of 2013, India accounts for 22 per cent of total MW sold.
What are the product development activities Gamesa have which are relevant to Indian market?
Indian Market needs a low wind turbine. The G97-2.0 is already one of the benchmarks for efficiency in the segment. We plan to launch the next generation G114-2.0 MW next year.
The turbine has one of the largest blades which enable higher wind capture & hence more power. Additionally, the Blade is specifically designed to maximizing generation during low winds while reducing noise. The G114 is expected to produce upto 20 per cent more energy compared to G97 depending on site conditions. This will significantly reduce the the cost of energy and also improve the utilisation of evacuation infrastructure.
Are you looking for partners to offer financial support to your clients? If so, what are the plans and current status of this?
Our core business Wind Turbines & Wind farms . However, if the need arises we would be happy to assist our clients in securing financing.
Currently, most of our clients are well funded. In fact the Indian market is already attracting a lot of interest from global PE & infrastructure funds.
However, there needs to be greater focus on Debt financing which is still a challenge in India. This is a larger issue which needs Govt attention. Some kind of Government Fund or dedicated financing facility would be big boost to the sector.
What is the status of your plans to enter Solar sector in India?
The Solar industry very nascent but has tremendous potential. However, the sector has only a handful of companies with long experience in Project Development. We have an inherent expertise in Designing & Constructing Wind farms which we would like to leverage this in the Solar space.
