Wind Turbine Tycoon Tulsi Tanti 'We Should Not Fear China, But Learn from Them Instead'
He is rich, Indian and head of the fast-growing wind turbine manufacturer Suzlon. Tulsi Tanti spoke with SPIEGEL ONLINE about his plans for wind energy in Germany, the future of nuclear energy and what the West can learn from China.
SPIEGEL ONLINE: Mr. Tanti, in 1990 you bought two wind turbines for your textile company -- and then proceeded to develop one of the largest wind energy companies in the world. Is your success story symbolic of the rise of emerging economies?
Tanti: I always wanted to build up a company that was a global player. In the textile industry, however it was not possible. That was my motivation.
SPIEGEL ONLINE: Even so, people in the industrialized world are fearful of an economic power shift toward India and China. Are they right to be worried?
Tanti: Forget this distinction between East and West. In our industry, the aim is to supply almost 7 billion people with energy while at the same time not polluting the earth. To do this, we have to work together at the global level. Asia is the market and the location where production is inexpensive. The technological expertise and specialist knowledge comes from the industrialized world. The aim is to combine them.
SPIEGEL ONLINE: You own more than 90 percent of the Hamburg wind turbine manufacturer Repower. When you bought in, there was concern that you were only interested in their know-how. Can you understand such worries?
Tanti: When German companies take over firms in India, it is seen as normal. When an Indian buys one or two firms in Germany, that is something special. If I pay money for a company, the know-how then belongs to the group, and I want to use it to the benefit of all. Suzlon is a strategic investor. In the past three years we have created over a thousand jobs in Europe -- mainly in Germany. Germany has seen enormous benefits as well.
SPIEGEL ONLINE: What are your plans for Repower?
Tanti: We want to position the company to be even more global. I believe that if we can really bring Suzlon and Repower together, we will be able to position Repower as the global market leader in particular fields in three to five years.
SPIEGEL ONLINE: Are you planning to buy additional companies in Germany?
Tanti: No. Together, Repower and Suzlon have the know-how for the different markets in industrialized and emerging countries. We have a global supply chain and production sites in inexpensive countries. In our company there is currently no piece of the puzzle missing. Furthermore, it is not easy to invest in Germany as a foreign company.
SPIEGEL ONLINE: What are the hurdles?
Tanti: I have a request for your government: Germany should become more global, the legislation should become more open. This is very important for the development of your economy. If a German company takes over 51 percent of an Indian one, it is given far-reaching controlling rights. But if an Indian company owns the majority of a German company, it is granted only very limited influence. That is unfair. If we want to make decisions we have to conclude a so-called domination agreement. This is only possible with a stake of 75 percent or more and even then it is still difficult.
SPIEGEL ONLINE: Wind energy, it would seem, has gone from being a booming business to an industry in crisis. You also faced losses in 2010. Have the good times come to an end?
Tanti: I am convinced that 2011 will be better. The construction of offshore wind farms offers great opportunities in Germany. Such projects could double the already-existing land-based capacity of 25 gigawatts.
SPIEGEL ONLINE: In Germany, however, coastal environmental conservation zones mean that the turbines must be located much further offshore than in comparable projects. Isn't the idea a bit crazy?
Tanti: It is fundamentally crazy to build wind farms out at sea. But it works! We have already installed facilities 40 kilometers off the coast at a depth of 50 meters. But calculating the time new developments take is always difficult. A lot of tests and approvals are required.
SPIEGEL ONLINE: Hasn't enthusiasm for offshore wind parks evaporated? The German government, after all, has recently extended the lifetimes of the country's nuclear power reactors.
Tanti: I don't believe so. We not only need wind power, but also nuclear and solar energy. All three forms are relatively climate friendly and energy requirements are increasing all the time. There is, however, a clear political stipulation that the share of renewable energies should grow to 20 percent worldwide by 2020. So far, we have reached 2 percent.
SPIEGEL ONLINE: In the meantime, China has overtaken the US and Germany as the leading market for wind turbines and the country is also a central growth market for your company. But the Chinese government mainly promotes domestic companies. How difficult has it been for you to break into the Chinese market?
Tanti: One has to understand China correctly. Our management there consists of native Chinese, we produce locally and our suppliers also come from China. In this way, we too can also enjoy the cost advantages.
SPIEGEL ONLINE: Nevertheless, Chinese companies sell their products at a much cheaper price. Will Chinese companies soon be leaving Suzlon and Repower behind on the international stage?
Tanti: No. Chinese products are perhaps cheaper to purchase. But if you consider the overall lifetime of a system over 20 years, we are less expensive. Chinese companies may well be competitive on their domestic market, but it will be another 6 to 8 years before they become serious competitors internationally. We should not be afraid of China, but should learn from them instead.
SPIEGEL ONLINE: In what way?
Tanti: The government there first opens all business opportunities to firms in the domestic market, which is huge. In the coming 10 years, wind energy systems with a total capacity of up to 200 gigawatts will be installed. That is almost seven times the current level in Germany. In so doing, Chinese companies are able to gather experience. Then three or four particularly good firms will be specifically made into global champions.
SPIEGEL ONLINE: Once that happens, will German companies stand a chance?
Tanti: Several smaller German firms will have to join forces to cope with the competition. But the level of know-how in Germany is high. Not for nothing do we have four development centers in the country. With their experience gained from having produced the existing systems, German engineers can develop the next generation of turbines. They have to be successful on the world market with better technology, not lower prices.
Interview conducted by Anne Seith