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Suzlon factory in China effectively closed as lack of orders takes toll
Suzlon has slashed its workforce and effectively closed a blade manufacturing plant in China, as it struggles to compete in the increasingly tough market.
The company reported sales of 64MW in China in the first nine months of its financial year for 2012 and 201MW during 2011. Recharge understands these sales were deliveries of orders signed in previous years. Other foreign companies have also struggled in China. Nordex sold only about 150MW in 2010-11, while Suzlon’s German subsidiary REpower made a single 200MW sale in the past five years.
Gamesa and Vestas have done better, although Vestas chief executive Ditlev Engel recently revealed it has made a conscious decision to step back from the market because of “unacceptable” prices.
Chinese turbine suppliers won bids last year at around 3,800 yuan ($600) per kW, a price many foreign companies say generates no profit.
Suzlon blames the “slow grid infrastructure ramp up in China” for weaker than expected sales in the last quarter.
A bottleneck in grid connections in high-wind regions slowed new projects. Slower growth in China has also exacerbated the problem of manufacturing overcapacity, bringing further pressure on prices.
REpower announced its withdrawal from the China market last year and is trying to divest its stake in a joint-venture manufacturing operation.
