5/7/2008 DEIF expands in India

 

By Poul Bonke Justesen                                                                 

 

India’s economy is booming, middle-class consumer spending has gone through the roof and the government has committed itself to supplying everybody with power by 2012. Achieving this goal entails a significant increase in power generation in India – a country where half a billion people have yet to gain access to electricity. In other words: India’s growth engine needs power – and a lot of it.

 

Such a situation holds great potential for the Danish wind turbine industry. Thus, in February an energy delegation of 11 business representatives among whom seven were from the wind turbine industry travelled to New Delhi to act on the golden opportunity.

 

The trip to India was planned to coincide with the official visit of Danish Prime Minister Anders Fogh Rasmussen and his Minister of Climate and Energy Connie Hedegaard, who were in India to initiate a close climate partnership with focus on renewable energy.

 

Denmark’s main item on the agenda was to do preliminary work to get India to sign up to the global climate agreement in Copenhagen 2009, which is intended to reduce global CO2 emissions. On part of his country, the Indian premier minister Manmohan Singh refused to commit to any CO2 reductions, yet Fogh did pick up some positive signals regarding future climate co-operation.

 

As part of the visit, The Danish embassy for India, the Danish Wind Industry Association and the Confederation of Danish Industries had organised a two-day Indo-Danish energy seminar during which the Danish delegation was scheduled to meet 50 Indian companies and business representatives as well as the top brass of the world’s only ministry for new and renewable energy.

 

At a lunch meeting with the wind delegation, Connie Hedegaard highlighted that for many years India and Denmark have had a close wind-partnership, which now needs to be intensified. Mid-century, planet earth will be home to nine billion people. Consequently, increasing CO2 emissions will create an enormous demand for renewable energy.

 

– By banking more on wind power Denmark and India will be able to create a ‘win-win’ situation achieving both growth and an improved global climate, said Connie Hedegaard.

 

The consulting firm Make Consulting has just completed a survey confirming that it is generally a good idea to keep an eye on the new growth country. Boasting an installed capacity of MW 7,700, India is the world’s fourth biggest wind power market and according to the estimates of the survey, by 2012 the country will have a capacity of MW 20,000 – i.e., almost a tripling within the next four to five years.

 

The subcontractor DEIF A/S supplies control technology for wind turbines. It is one of the companies experiencing opportunities in India unfolding. At the lunch meeting the divisional manager for renewable energy, Henning Gammelgaard Jensen, signed a comprehensive partnership deal with Vestas RBB. Until 2006, it was part of a joint venture with Vestas, but today the company is entirely Indian.

It is now DEIF A/S’ job to develop the software controlling all processes inside the wind turbines.

 

– Denmark and India enjoy a warm relationship. This is partly because the way has been cleared by big Danish players such as Vestas and LM Glasfiber, says Henning Gammelgaard Jensen. Yet, he does not want to go into detail regarding the economic prospects in India.

 

During the past few months, he has been busy travelling all over the Indian subcontintinent, where he has met with 15 wind turbine manufacturers and potential partners. And before the end of the year, DEIF A/S intends to open a subsidiary somewhere in India.

 

– It is crucial that we are both global and local. That is why we are now making India a priority by introducing our own set-up. In future, five to ten Indian employees will handle sales and service, Henning Gammelgaard Jensen explains.

 

It makes good sense to expect more ‘win-win’ situations for Denmark and India in the future. The soaring prices on oil and the urgent need for electricity have prompted the Indian government to set the target that by 2012, 10 percent of the country’s electricity must be generated by wind power.

 

This priority creates an advantageous situation for the Danish subcontractors. Sune Kjeldsen is the manager of the Danish chamber of commerce in Bangalore and he informs www.business.dk that during the past few years, 10 Danish subcontractors have set up businesses in India. And 10 more are on their way.

 

Svendborg Brakes is another example of a subcontractor enjoying rising sales figures in India. The company’s brake systems have a global market share of 50-60 percent and in the slipstream of a major success in China, the time has now come for growth in India.

 

– We have just landed a respectable deal with Southern Windfarms worth DKK 10 million. We have been in the Indian market for 10 quiet years, but now the country appears to be rising like the sun. Only last year 9-10 new wind turbine manufacturers arrived, says Claus Sejersen, Managing Director for Svendborg Brakes in Germany.

 

In 2007, Svendborg Brakes reached a turnover in India of DKK 2,5 million, and Claus Sejersen expects the figure for 2009 to be at least DKK 20 million – eight times as much as two years before.

 

Besides DEIF A/S and Svendborg Brakes, the wind delegation was made up of Jupiter Composites A/S, Vestas Wind System A/S, Brüel & Kjaer, Vibro A/S, DONG Energy and Suzlon Energy.