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Trailblazers | June 2019

ELGi’s Rs 18-cr motors facility to go on stream soon

ELGi Equipments, one of the leading air compressor manufacturers with a broad line of innovative and technologically-superior compressed air systems, has earned worldwide distinction for designing sustainable solutions that help companies achieve its 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. The company’s portfolio of over 400 products has found wide application across industries.

Dr Jairam Varadaraj, Managing Director, ELGi Equipments Limited, speaks on the latest 4G air compressors, and the major factors behind the success story of ELGi in becoming a major force in compressors worldwide.

Air compressor has been constantly changing over the years. What is the latest from ELGI and how does this 4G air compressors score over others?

With increasing air pollution concerns and stringent environmental regulations, oil free air is a top priority. But companies have historically suffered the constraints of high cost, poor reliability, and low efficiency in order to have oil free air. At ELGi, we questioned this, connected the dots and developed a technology specifically applied to solving an existing need in a new way. The ELGi AB ‘Always Better’ series is a disruption in oil free compressed air technology, offering customers a no-compromise, oil free solution at approximately 8-10 per cent reduced lifecycle costs when compared with prevailing oil-free technology. With significantly lower maintenance and ease of use, customers will also be assured of reliable, high air purity for sensitive industry applications.

Global leadership in compressors is ELGi’s big dream. Where does it stand today in the global competitive scale of progress and growth?

ELGi is estimated at being in the no. 7 position and we aspire to be the no. 2 in the global air compressor business. Over the last decade, ELGi has recorded a strong, double digit, upward trending CAGR, well above the industry growth rate of about 2.5-3 per cent. To accomplish our aspirational targets, our strategy will include, in addition to organic growth, business acquisitions across the world. We’re expecting Europe and the US to be major markets, the acquisitions will also happen in those two geographies, mostly for scale and customer access.

ELGi has entered the field of motors? What are the plans and investment? What are the kinds of motors on cards?

ELGi will commission a production facility for motors probably in the second quarter this financial year. The machinery installation is happening now. ELGi has invested Rs 18 crore in building this facility. We are making motor specifically for compressors that would make our compressors more efficient.

What about the technologies for this new venture in motors? If developed by its own R&D, some comments on the efforts and results?

We have developed the technology for two types of motors – standard induction motors and permanent magnet motors. The induction motor technology is a quite diffused and we built it in-house after building a team of people. It has been a 4 year effort. The permanent magnet motor technology has been developed using the assistance of a design house based in Europe. Our first production would be the induction motors and then we will introduce the permanent magnet motors.

Please tell us with some details about the automation processes of your systems, and how are they comparable to systems available worldwide?

Our automation principle is based in improving the value of human work rather than pure reduction of head count. We believe that when people work more with their brain and leave the brawn work to machines, then the value of their work will go up and thus their earnings and consequently their standard of living. In terms of the technology of automation to achieve the above principle, we have adopted the state of the art without any compromises.

In exports, where does ELGI stand and how many new markets reached in the recent times? Comment also on your recent acquisitions, especially in Australia.

At present we are selling our compressors in over 100 countries and we keep adding new geographies as and when opportunities present themselves. Australia is a strategic market for ELGi. While it may not be as large as the European or US market, the market demands high performance (across products and services) and correspondingly rewards companies that deliver this. With our high performance products, the acquisition of Pulfords has given us an opportunity to substantially improve the service and support engagement with customers. We are investing in people and processes to further enhance this capability and value to the customer.

What are the quality systems in place at your production units? How are the various quality issues and after-sales services taken care of?

At ELGi, we practice the discipline of Total Quality Management (TQM) and this involves first defining quality targets at a strategic level, including the quality targets for products. We measure the current quality levels through a comprehensive system called Customer Care System where all the complaints are logged. We then have a time bound resolution of the problem by understanding the root cause. And such defects are documented and in new product development these defects are prevented. On a proactive level, we have strong statistical quality control processes on the shop floor to ensure that all the processes are tightly spread around the mean value of the specification.

What are the future plans for expansion? Will there be any diversification into areas related to the current ones? Give details.

Our aspiration is to become No. 2 in the world in the air compressor business. Towards this end, we will remain focused on building technology, competencies and products that will enable this journey. We will not diversify into areas unrelated to this aspiration.

What are the three major factors that you think are behind the success story of ELGi in becoming a major force in compressors worldwide?

  • Technology: Not just the ‘know-how’ but the ‘know-why’ and thus enabling us to build the state of the future art products
  • Highest Uptime: Produce products that have the lowest defect levels in the world and predict the possibility of failures using advanced IoT technologies
  • People: Build competencies that will help us build a truly global MNC with Indians and from India
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