The latest issue of Forbes magazine which I just received has a sobering entry about billionaires going bust. While, on the whole, the news isn't really as bad as it sounds - some of these people still have several billion left - one name caught my eye: Tulsi Tanti, the founder of Suzlon Energy. A pioneer in the wind energy business, Tanti built his company up quite fast buying REI Power in Germany and expanding his business to the far corners of the world during a period when oil prices hit record highs. Unfortunately, poor quality control seems to have led to his downfall. Last year there were already rumors about blades on his turbines cracking in Minnesota. While the Suzlon people attributed this to the blades not having been adequately tested in the kind of severe Midwestern weather that we often face, they claimed to be working on better designs and that they had offered to replace the damaged blades under warranty. It turns out that for some reason, clients in the USA are not buying this argument. A leading Californian power producer has cancelled an order for 150 turbines from Suzlon. My guess is that this would go to Clipper Wind who are based in California and who have had their own problems recently due to the recession. But what is clearly a symptom of Suzlon's sickness is a godsend fro Clipper. They do not have quality problems of any kind going by the reports available to me. And that is their salvation in these difficult times.
Forbes estimates that Tanti who was worth $ 3 billion last year is worth much less - his net worth has fallen by "at least $ 2.6 billion" according to them. My guess is that if some other company steps in at this point in time, they may be able to buy Suzlon and REI's assets for a bargain price. I also know, for certain, that a certain prominent Indian businessman's claim that he was setting up a wind energy farm on the country's West Coast in association with Suzlon is complete BS. I doubted as much when he talked to me last and I even told his managers this. Well, if he reads this blog as I suspect he does from time to time, he knows that I know about his "project."
That apart, I will be looking harder for a large turbine for a friend who has a hilltop property near a large Indian city and who has been thinking about putting up a large turbine there. Luckily for him, there is a power station belonging to the state government right below the hill. When some businesses fail, I guess others have opportunities to work on and succeed. When it comes to green business, I do hope that the successes are vastly more than the failures and that Suzlon's failure is forgotten when other companies begin to shine. And, finally, I do hope that Suzlon manage to pull back from the brink.
PS A link to Indian billionaires who have dropped in net worth to a considerable extent is accessible at this link: http://www.forbes.com/2009/03/11/india-financial-loss-billionaires-2009-billionaires-india_slide.html
Tanti figures prominently in the list.