To acquire 50,000 acres in eight states to ensure flow of big orders, for end-to-end solutions.
Suzlon, the wind energy equipment maker, is set to acquire around 50,000 acres of land across eight states, to build a pipeline for future orders.
The idea is end-to-end service, of providing equipment and setting up the plant as well. Tulsi Tanti, chairman and managing director, told Business Standard this bank would help them achieve the growth target for 2012-13. “We have set up as much as 1,600 Mw this year and next year. We expect to grow 30-40 per cent. We will not be able to do that if we do not have a land bank in place,” he said.
It has planned to add 2,400 Mw capacity in wind power. On an average, each Mw requires 20 acres. “We are building a pipeline for 2,400 Mw. We will be able to execute 2,200-2,300 Mw (next financial year),” said Tanti.
Land will be acquired across eight states, which include Maharashtra, Gujarat, Rajasthan, Karnataka and Tamil Nadu. The acquisition is happening across 42 sites.
Tanti admits to challenges. “It’s a huge execution task, to acquire so much land. We are working at different locations and there are regional and local issues. We have a model to deal with people, work and engage with them,” he said.
Apart from land, the company is building other infrastructure towards the aim of end-to-end solutions. This includes power evacuation infrastructure such as sub-stations and lines. The investment in this is being done by the promoters for Suzlon. Samanvaya Holdings, one of the promotes, sold around two per cent stake in the company, to earn as much as Rs 100 crore.
“It’s nothing new and we have doing this since the last 10 years for Suzlon's growth. We are getting lots of inquiries for orders. If we do not have the pipeline ready, we will be unable to grow. If we don't do this now, we cannot grow more than 10-15 per cent next year,” said Tanti.
The company posted profits in the past three quarters, after a long spell of losses. It is banking on growth in orders. Suzlon is grappling with Rs 9,000-crore debt and is hoping for enough cash from operations; hence the stress on building a strong order pipeline.
It sees an opportunity for renewable energy in the current market conditions. With conventional sources such as coal and natural gas in short supply, the company believes investor interest in renewables, especially wind power, has increased in India. “The rupee has depreciated and imported conventional energy is becoming more and more expensive. Wind power has opportunities in this environment,” said Tanti.