Suzlon may flee Brazil's wind market on tougher rules - report
Oct 4, 2013 - Indian wind turbine maker Suzlon Energy (BOM:532667) may be prompted to exit Brazil's wind market because of the country's tougher local-content requirements, news agency Bloomberg said today.
In order to be a player in Brazil’s wind industry, which is estimated at USD 2.75 billion (EUR 2.02bn), wind-turbine suppliers must manufacture a significant share of their parts locally, otherwise their potential customers would not be eligible for funding from the country’s development bank BNDES.
However, Suzlon may need to invest as much as USD 100 million in local plants to comply with the rules hence a pullout is highly probable. On the other hand, the other major manufacturer Denmark's Vestas (CPH:VWS), which has been facing the same regulatory hurdle and saw its market share in Brazil slump by a third as a result, plans to seek a BNDES approval, according to an unnamed company official cited by Bloomberg.
Suzlon and Vestas are the world's biggest wind-turbine suppliers in terms of revenue.