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Talking Point | August 2017

We want to be 2nd largest manufacturer in the world

Elgi Equipments Limited is a leading air compressor manufacturer with a broad line of innovative and technologically superior compressed air systems. ELGi has earned worldwide distinction for designing sustainable solutions that help companies achieve their productivity goals and keep the cost of ownership low. ELGi offers a complete range of compressed air solutions from oil-lubricated and oil-free rotary screw compressors, oil-lubricated and oil-free reciprocating compressors and centrifugal compressors, to dryers, filters and downstream accessories.

Anvar Jay Varadaraj, Head - Marketing and Corporate Communication, Elgi Equipment, shares with the ITJ the company’s profile and goal of expanding its footprints globally.

Excerpts...

Tell us about more Elgi and its journey over the years.

We are one of the largest compressor manufacturers in the world. We have about 2 million machines running across 70 countries and are one of the few manufacturers with full range of compressed air solutions. We are looking to expand our footprint outside of India, we make 50 per cent of our revenue from outside India and our goal is to become the number two compressor manufacturer in the world in 10 years.

What are the main industrial sectors the company caters to?

Our core market is India. We have been here the longest and have a significant presence here but we are looking to grow our presence in larger markets like Western Europe, specifically markets such as Italy and France where we already have a presence and will be looking into expanding to larger European countries as well. We already have a presence in the US. We own a distribution company called Pattons Inc and also have an incorporated NTP Elgi SA. Additionally, we focus on small niche markets offering a lot of opportunity specifically Australia, Indonesia, Thailand, and Malaysia.

What are the major applications of Elgi?

Given the nature of our range we cater to every application but a few applications that I would like to focus on today are textiles and perhaps pharma. With textiles, we have really changed the way in which we engage with the customers. Some variables we are focusing on, are the quality of the air needed for the application, regularity with which compressed air is needed, is there a continuous cycle or is there varying demand patterns, what is the current systems of airlines in the factory, how can we tailor a machine for that and so on. When we take into account all of these variables, it actually puts a solution to a customer as opposed to a machine.

How Elgi is step ahead in comparison with competitors?

Our USP in the market, we offer lowest lifetime cost. The challenge with selling a compressor solution is the price ends up taking centre stage. If you look at a 10 year ownership period, price is only about 15 per cent of the cost. The major chunks are made up of how much the machine and how much energy the machine consumes, their parts and maintenance expense and the cost and profitability when the compressor is not running whose implications for how quickly the compressor manufacturer is able to provide service and get the machine up and running. Rather than focusing on price with our customers, we are directing that attention to these three dimensions which we really own.

Your views on change and growth on manufacturing sector with present government.

With respect to the recent regulatory changes and implementation of GST, it is too soon to determine the impact on how the customers are going to react. The fact that the implementation is across the board, we do not believe that it is going to significantly affect our business. We believe that us being a global company we can take risks in the Indian market by making some policy changes. We believe that most of the GST changes are for the general good of the industry and we are starting to see lot of positive indicators in a few markets that I believe will ultimately result in a strong 2017 for us.

Could you shed light on Elgi’s goal and vision?

We have a very clear goal and vision. We want to be the second largest air compressor manufacturer in the world in the next decade. We truly believe that we have the products and the technology to compete in this sector. We are very confident that we can do it. Textile successes is an example of what we can achieve when we take a targeted approach. I am very confident for our future.

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