India?s biggest wind turbine maker Suzlon Energy is facing delays in payment from clients due to lack of credit from financial institutions, said Tulsi R Tanti, chairman of the company on Friday.
?There is no growth in India and liquidity constraint is adding to the problem. Earlier we were getting payment from our customers on time, but now there is 40-60 day delay because banks are not releasing funds to them on time,? Tanti said. The company will expand business overseas to ?de-risk? the stagnation in India operations. ?We will expand our operations in South Africa and South America . We have just started in Brazil . We are looking at Canada and European Union as other potential regions,? Tanti added. At present the company has operations in 21 nations, including the United States and China .
Tanti said Suzlon Energy will not add to its capacity till the end of 2010-11. ?We already have enough strength to meet the requirement in India and outside for the next two years. Our ongoing programme to raise capacity from 2,700 mw to 5,700 mw would be complete in June this year. Beyond that we don?t have any capacity addition or capex plans,? he added.
Suzlon will also focus on ?consolidating the business? during the year, he said. ?There is very high focus on operational efficiency, manufacturing excellence and quality standards. We will reduce net working capital to generate more cash from the system and also working on reduction in costs,? Tanti said.
?With lower project costs and working capital, we can find more financers for our project,? chairman of the Ahmedabad-based company said.
At present, he said, the company has a ?comfortable cash position as we are in the no growth phase?.
The company would return to profit in the quarter ended March 2009 after receiving new orders. ?We will have good profit in the fourth quarter,? he added. Suzlon Energy posted a loss of Rs 58.97 crore in the quarter ended December 2008 due to payments made to replace faulty blades and as the value of orders declined.
Suzlon signed more than 300 megawatt of orders in the three months ended March 31 from companies in Australia and China , Tanti said without disclosing the value of orders. The turbines would be supplied in the current quarter.
Going forward, Tanti said, the company expects new orders. ?A lot of good orders are in the pipeline. We are negotiating with the parties at the moment,? he added.
Suzlon expects to complete the purchase of additional shares in Hamburg-based Repower Systems AG from Portugal ?s Martifer next month, Tanti said. Martifer was paid 65 million euros in December for part of its 22.4% stake in REpower. Another 30 million euros will be paid in April and 175 million euros in May, rasing Suzlon?s stake in Repower to 91%.