How Danish company Vestas built a Rs 500 crore blade factory near Ahmedabad in a record 15 months
Bert Nordberg, chairman of Danish wind turbine maker Vestas, had a brief meeting with Prime Minister Narendra Modi in New Delhi. Nordberg gave a commitment to the PM that the company was willing to bring in substantial foreign direct investment (FDI) into India for setting up a wind turbine blade manufacturing factory. Within 10 days of the meeting, the Vestas board approved its India plan, gave its nod to a factory location 30 km west of Ahmedabad and then quickly brought one of its senior executives of Indian origin, Madhava Krishna Pokala, from the sleepy town of Ringkobing in Denmark to oversee the process of setting it up.
Next up were a MoU with the government of Gujarat, procurement of 20 permits and finally investing €70 million (roughly Rs 500 crore) to establish a greenfield manufacturing unit in a 36-acre plot off the Ahmedabad-Rajkot highway. In 15 months, the factory began blade production, making it a rare example of a fast-tracked FDI investment into India. “Consent to establish is a critical clearance requirement to begin construction. We received it in 22 days as against the usual 60. Also, power at the factory site was made available in six months rather than the usual 18 months due to effective influence of the Invest India cell of the Government of India,” Clive Turton, president (Asia Pacific), Vertas, told ET Magazine in an emailed interview.
About 1,000 people, including 250 engineers and 750 operators, are now working in the factory that has already stocked 230 blades in the last seven months; one blade is 54 metres long and weighs eight tonnes. “We have followed international norms in building this factory, with safety as a priority. It’s all air-conditioned; the workforce is well-trained, 150 of them in our US factories,” says Pokala, Vestas’ vice-president and the India factory manager. Blades are one of four components required for a wind turbine, the others being the nacelle, hub and tower.
The Gujarat factory that has a capacity of 600 MW produces 900 blades a year; three blades are needed for one wind turbine of 2 MW, producing enough electricity for as many as 35 villages. “If needed, we can expand the factory and double its production. But that will depend on the work we receive,” says Amar Variawa, the company’s director of marketing and public affairs.
Wind energy installation in India rose from 2.3 GW in 2014-15 to 3.4 GW in 2015-16 before peaking at 5.4 GW in 2016-17 (1 GW = 1,000 MW). But till August this fiscal year, wind energy installation was barely 0.35 GW mainly on account of the government’s change of policies and ending of subsidies, forcing equipment manufacturers to pile up inventories for better days.
Vestas still seems to be bullish on its India story. Its research and development centre in Chennai is already the largest outside of Denmark. Chennai also houses its nacelle and hub factory. Turton says, “The Indian government has set an ambitious target of 175 GW for renewable energy installation by 2022 out of which 60 GW is wind. The massive volume has attracted both domestic and global players to wind energy.”